nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2010‒02‒05
nine papers chosen by
Giuseppe Marotta
University of Modena and Reggio Emilia

  1. Social expenditure and poverty reduction in the EU15 and other OECD countries By Caminada, Koen; Goudswaard, Kees
  2. Long-Distance Bus Services in Europe: Concessions or Free Market? By Didier van de Velde
  3. On the gravitation and convergence of industry profit rates in Denmark, Finland, Italy and the US By Andrea Vaona
  4. The Automobile Industry in and Beyond the Crisis By David Haugh; Annabelle Mourougane; Olivier Chatal
  5. Long-Distance Passenger Rail Services in Europe: Market Access Models and Implications for Germany By Thorsten Beckers; Christian von Hirschhausen; Fabian Haunerland; Matthias Walter
  6. Which policy options for Europe in the global competition for talent? Brain competition policy as a new breed of locational policy with positive externalities By Christian Reiner
  7. Transparency of regulation and cross-border bank mergers By Köhler, Matthias
  8. Private education provision and public finance : the Netherlands By Patrinos, Harry Anthony
  9. Disability Benefits for Older People: How Does the UK Attendance Allowance System Really Work? By Pudney S

  1. By: Caminada, Koen; Goudswaard, Kees
    Abstract: The European Union coordinates and encourages Member State actions to combat poverty, and to reform their social protection systems on the basis of policy exchanges and mutual learning (‘best practices’). Some EU countries are more effective in poverty reduction than others. What can explain these variations in effectiveness? This paper analyzes the effectiveness of social transfers in alleviating poverty. We focus on EU15 countries, but also include other OECD countries in our analysis. We compare poverty rates at the levels of market and disposable incomes, that is before and after transfers, in order to analyze the effect of tax and transfer policies in reducing poverty, i.e. to determine the target efficiency of social transfers. We perform several tests with the most recent data (LIS, OECD, SOCX, and Eurostat: ECHP/EU-SILC). Finally, we perform several partial analyses by disaggregating poverty rates to socioeconomic and demographic conditions in order to investigate to what extent variations at the social program level (such as old age pensions, child benefits) affect the measured effectiveness of the welfare state in alleviating poverty. Empirical results draw heavily on how pensions are treated - as primary income or as transfer. We find a strong relationship between levels of social spending and antipoverty effects of social transfers and taxes across EU15 countries. Social spending seems to be an important determinant of a country’s poverty outcome, especially among the elderly, when pensions are considered as transfers. Our analysis highlights some cross-country differences in targeting of social expenditures on poverty alleviation in EU15 and non-EU15 countries around 2005. We introduce an indicator of Public Policy Effectiveness on Poverty Alleviation across countries. Each percentage point of social expenditure alleviates poverty in both EU15 and non-EU15 countries by .7 percentage points on average. Relatively high scores in EU15 countries are found for Ireland and Scandinavian countries, while Italy, Greece and Spain score lowest. Outside Europe the poorest scores are reported for Korea and the USA. Country ranking appears to be rather stable over time when outcomes for 1995 and 2005 are compared, although some of our results may be sensitive to cyclical factors. Finally, we analyzed poverty among vulnerable age groups. Our results show that family programs and child support alleviate poverty among children to a large extent, especially in non-EU15 countries. For public and private old age pension and survivors schemes we find no effect on poverty in case pensions are considered as transfers (both in EU15 and non-EU15 countries). However, this picture changes completely when pensions are counted as transfers. In that case the poverty rate among elderly in EU15 falls from 90 to 21 percent through taxes and social transfers!
    Keywords: poverty; welfare states; Lisbon objectives; social indicators
    JEL: H55 H53 I32
    Date: 2009
  2. By: Didier van de Velde
    Abstract: This paper makes a review of the current situation in the interurban passenger transport market by coach in Europe, describing for a number of selected countries the regulatory setting, the main market actors, the main developments have taken place in the last decade or two and a number of resulting challenges, especially in terms of regulation. The paper starts with a chapter on country cases. The next chapter summarises the main facts and trends that appear out of this review. The last chapter draws a few conclusions.
    Date: 2009–12
  3. By: Andrea Vaona (Department of Economics (University of Verona))
    Abstract: The hypotheses of profit rates gravitating around or converging towards a common value is tested using Danish, Finnish, Italian and US data. Both hypotheses are rejected for all the countries considered. This is interpreted as the result of limitations to capital mobility and of persistent differentials in the innovative performance of industries.
    Keywords: capital mobility, gravitation of profit rates, convergence, SURE estimation, exactly median unbiased estimator
    JEL: L16 L19 L60 L70 L80 L90
    Date: 2010–01
  4. By: David Haugh; Annabelle Mourougane; Olivier Chatal
    Abstract: This paper considers the role of the automobile industry in the current cycle. It shows that the industry is economically important and its cycle is intertwined with business cycles. After casting some light on the sources of the collapse in car sales at the start of the crisis, the policy measures, in particular car scrapping programmes, put in place to support the automobile industry are discussed. The paper also derives short and medium term projections of car sales. While a rebound in car sales is likely in North America, Japan and the United Kingdom, car sales in Germany have been pushed significantly above trend and may weaken going forward. Over the medium term, in mature markets such as Europe and North America, trend sales are likely to remain stagnant. By contrast, rapid increases are foreseen in China and to a lesser extent in India. Medium-term projections suggest that capacity exceeds trend sales by around 20% in the five largest Western European markets considered as a whole. Without an adjustment in capacity, these countries would need to ensure an ongoing strong export performance. By contrast, automakers in the NAFTA area would need to halt their decline in domestic market share or to rely increasingly on exports in order to avoid excess capacity. In order to maintain their high levels of capacity utilisation, Korean and Japanese manufacturers will need to keep up their strong export performance.<P>L’industrie automobile dans et après la crise<BR>Ce document examine le rôle de l’industrie automobile dans le cycle économique en cours. Il montre que l’industrie a une importance économique certaine et est interconnectée avec le cycle économique. Après avoir quelque peu détaillé l’origine de l’effondrement des ventes automobiles en début de crise, les mesures publiques mises en œuvre pour soutenir l’industrie automobile, et notamment celles concernant les dispositifs de prime à la casse sont détaillées. Ce document présente également des perspectives à court et moyen terme pour les ventes de voitures. Alors que l’on peut s’attendre à un rebond en Amérique du Nord, au Japon et au Royaume-Uni, les ventes d’automobiles en Allemagne sont nettement supérieures à la tendance, et pourraient de ce fait marquer un fléchissement à l’avenir. À moyen terme sur les marchés parvenus à maturité tels que l’Europe et l’Amérique du Nord, les ventes tendancielles devraient rester étales. À l’inverse, des hausses rapides sont attendues en Chine et dans une moindre mesure en Inde. Selon les projections à moyen terme, les capacités productives du bloc dépassent les ventes tendancielles de quelque 20 % sur l’ensemble des cinq plus grands marchés d’Europe occidentale. À défaut d’ajustement des capacités, il faudrait que ces pays affichent de solides performances continues à l’exportation. À l’opposé, pour éviter les surcapacités, les constructeurs de la zone ALENA devraient mettre un terme au recul qu’ils connaissent sur leur marché intérieur ou s’appuyer de plus en plus sur les exportations. Dans la mesure où les constructeurs coréens et japonais exportent une large part de leur production, leur destin est étroitement lié aux marchés mondiaux. Conserver des taux d’utilisation élevés en Corée et au Japon nécessitera que ces pays continuent de bénéficier de fortes performances à l’exportation.
    Keywords: automobile crisis, car scrapping schemes, car sales, crise de l'automobile, prime à la casse, ventes de voitures
    JEL: E3 H2 L62
    Date: 2010–01–26
  5. By: Thorsten Beckers; Christian von Hirschhausen; Fabian Haunerland; Matthias Walter
    Abstract: This paper focuses on classifying market access for long-distance passenger rail services in Europe into three main models and discusses the advantages and disadvantages of each of these models. The “Tendered Concessions” model aims to introduce competition for the market by which operators are selected in a tendering procedure. The “Monopolistic Network Operator” model aims to sustain network effects by granting a concession to one operator. The “Open Market” model enhances operators’ entrepreneurship by providing opportunities to plan services based on open access to the network. We present the strengths and opportunities, risks and threats without favoring any one model. Classifying the many design options and their different impacts will help to structure the ongoing policy discussion. The paper also gives an overview of the organization of long-distance passenger railway markets in selected European countries, and discusses the development of Germany’s longdistance rail passenger services in particular.
    Date: 2009–12
  6. By: Christian Reiner
    Date: 2010
  7. By: Köhler, Matthias
    Abstract: There is ample anecdotal evidence that political influence constitutes a barrier to the integration of the EU banking market. Based on a dataset on the transparency on the supervisory review process of bank mergers in the EU, I estimate the probability that a bank is taken over as a function of bank and country characteristics and the transparency of merger control. The results indicate that banks are systematically more likely to be taken over by foreign credit institutions if the regulatory process is transparent. Particularly large banks seem to be less likely to be taken over by foreign banks if merger control lacks transparency. --
    Keywords: Mergers and acquisitions,banks,barriers to consolidation,political interference
    Date: 2010
  8. By: Patrinos, Harry Anthony
    Abstract: One of the key features of the Dutch education system is freedom of education -- freedom to establish schools and organize teaching. Almost 70 percent of schools in the Netherlands are administered by private school boards, and all schools are government funded equally. This allows school choice. Using an instrument to identify school choice, it is shown that the Dutch system promotes academic performance. The instrumental variables results show that private school attendance is associated with higher test scores. Private school size effects in math, reading, and science achievement are 0.17, 0.28, and 0.18.
    Keywords: Tertiary Education,Education For All,Secondary Education,Primary Education,Teaching and Learning
    Date: 2010–01–01
  9. By: Pudney S (Institute for Social and Economic Research)
    Abstract: We analyse FRS survey data on the relationship between disability and receipt of the Attendance Allowance (AA) disability benefit by older people. Despite being non-means-tested, we find that AA is implicitly income-targeted and strongly targeted on those with care needs. We focus particularly on the receipt of higher-rate benefit, intended for those in need of day-and-night care, finding that, in practice, higher-rate payments are negatively related to age and income, in addition to care needs. The allocation of higher-rate AA awards strongly favours people with physical rather than cognitive disabilities.
    Date: 2010–01–25

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