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on Microeconomic European Issues |
| By: | Contini, Bruno (LABORatorio R. Revelli) |
| 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: | J0 J1 J6 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4718&r=eur |
| By: | Bell, David N.F. (University of Stirling); Blanchflower, David G. (Dartmouth College) |
| Abstract: | This paper reviews current issues in youth labour markets in developed countries. It argues that young people aged 16-25 have been particularly hard hit during the current recession. Using the USA and UK as cast studies, it analyses both causes and effects of youth unemployment using micro-data. It argues that there is convincing evidence that the young are particularly susceptible to the negative effects of spells of unemployment well after their initial experience of worklessness. Because the current youth cohort is relatively large, the longer-term outlook for youth unemployment is quite good, but there is a strong case for policy intervention now to address the difficulties that the current cohort is having in finding access to work. |
| Keywords: | youth unemployment, scarring, ethnic crime, health, life satisfaction, wages, ALMP |
| JEL: | J01 J11 J21 J23 J38 J64 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4705&r=eur |
| By: | Salvatori, Andrea (ISER, University of Essex) |
| Abstract: | All industrialized countries have Employment Protection Legislation (EPL) for permanent workers and Restrictions on the use of Temporary Employment (RTE). The (ambiguous) effects of these on the levels of employment and unemployment have been extensively studied, but nothing is known empirically about their well-being implications. Using longitudinal data from the European Community Household Panel, the author conducts the first study of the link between both EPL and RTE and workers' wellbeing. The results provide evidence that both permanent and temporary employees gain from reforms that ease restrictions on temporary employment but leave firing costs for permanent workers unchanged. This finding contrasts with common claims found in the political economy literature. |
| Keywords: | temporary employment, employment protection legislation, job satisfaction |
| JEL: | J28 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4685&r=eur |
| By: | Zissimopoulos, Julie (RAND); Smith, James P. (RAND) |
| 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, we 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, we study the long-run behavior of parental monetary giving to children across families and within a family. We 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. |
| Keywords: | transfers |
| JEL: | J10 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4698&r=eur |
| By: | Cottini, Elena (University of Milan); Lucifora, Claudio (Università Cattolica del Sacro Cuore) |
| Abstract: | Increased pressure for labour market flexibility and increasing demand over workers' performance have fostered the idea that working conditions, in most European countries, have progressively deteriorated with adverse effects on psychological well being and mental health. This paper investigates the links between contractual arrangements, working conditions and mental health using time-series cross-section data for 15 European countries. We use different waves of the European Working Conditions Survey (1995, 2000, 2005) to document recent patterns in mental health at the workplace and to assess how these are related to various job attributes. We find substantial heterogeneity in mental health incidence at the workplace both across workers, as well as between countries. Given population heterogeneity in responses to mental health questions, we implement a methodology for differential reporting in ordered response models which allows for threshold shifts. We show that a set of workplace attributes, such as: working in shifts, performing complex and intensive tasks and having restricted job autonomy lead to a higher probability of reporting mental health problems. We also provide evidence of a positive causal effect of adverse overall working conditions on mental health distress. We show that labour market institutions, and health and safety regulations can explain a significant part of cross-country differences. |
| Keywords: | working conditions, mental health, health and safety regulation, labour market institutions |
| JEL: | C25 I10 J81 J28 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4717&r=eur |
| By: | Havnes, Tarjei (Dept. of Economics, University of Oslo); Mogstad, Magne (Statistics Norway) |
| Abstract: | There is a heated debate in the US, Canada and many European countries about introducing universally accessible child care. However, studies on universal child care and child development are scarce and only consider short-run outcomes. We analyze the introduction of universal child care in Norway, addressing the impact on children’s long-run outcomes. Our precise and robust difference-in-difference estimates show that child care had strong positive effects on children’s educational attainment and labor market participation, and also reduced welfare dependency. Subsample analysis indicates that children with low educated mothers and girls benefit the most from child care. |
| Keywords: | universal child care; child development; long-run outcomes |
| JEL: | H40 I28 J13 |
| Date: | 2009–09–30 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:osloec:2009_023&r=eur |
| By: | Ernest Miguelez (Faculty of Economics, University of Barcelona); Rosina Moreno (Faculty of Economics, University of Barcelona) |
| Abstract: | TWe investigate the importance of the labour mobility of inventors, as well as the scale, extent and density of their collaborative research networks, for regional innovation outcomes. To do so, we apply a knowledge production function framework at the regional level and include inventors’ networks and their labour mobility as regressors. Our empirical approach takes full account of spatial interactions by estimating a spatial lag model together, where necessary, with a spatial error model. In addition, standard errors are calculated using spatial heteroskedasticity and autocorrelation consistent estimators to ensure their robustness in the presence of spatial error autocorrelation and heteroskedasticity of unknown form. Our results point to the existence of a robust positive correlation between intra-regional labour mobility and regional innovation, whilst the relationship with networks is less clear. However, networking across regions positively correlates with a region’s innovation intensity. |
| Keywords: | Speed Limits; inventors’ mobility, networks of co-inventors, knowledge production function, spatial econometrics, European regions |
| Date: | 2009–11 |
| URL: | http://d.repec.org/n?u=RePEc:ira:wpaper:201001&r=eur |
| By: | John T. Addison (Moore School of Business, University of South Carolina, Queen’s University School of Management, IZA, and GEMF); Alex Bryson (National Institute of Economic and Social Research and CEP); Paulino Teixeira (Faculdade de Economia/GEMF, University of Coimbra); André Pahnke (Institut für Arbeitsmarkt- und Berufsforschung, Bundesagentur für Arbeit) |
| Abstract: | This paper presents the first comparative analysis of the decline in collective bargaining in two European countries where that decline has been most pronounced. Using workplace-level data and a common model, we present decompositions of changes in collective bargaining and worker representation in the private sector in Germany and Britain over the period 1998-2004. In both countries within-effects dominate compositional changes as the source of the recent decline in unionism. Overall, the decline in collective bargaining is more pronounced in Britain than in Germany, thus continuing a trend apparent since the 1980s. Although workplace characteristics differ markedly across the two countries, assuming counterfactual values of these characteristics makes little difference to unionization levels. Expressed differently, the German dummy looms large. |
| JEL: | J5 |
| Date: | 2010–02 |
| URL: | http://d.repec.org/n?u=RePEc:gmf:wpaper:2010-02&r=eur |
| By: | Akli Berri (INRETS, Department of Transport Economics and Sociology (DEST)); Stéphanie Vincent Lyk-Jensen (SFI - The Danish National Centre for Social Research); Ismir Mulalic (University of Copenhagen and Technical University of Denmark); Theodoros Zachariadis (University of Cyprus) |
| Abstract: | We evaluate household transport consumption inequalities in France, Denmark and Cyprus, investigate their temporal dynamics and estimate the redistributive effects of taxes on different commodity categories. A comparative analysis is carried out in light of the differences between these countries, most notably in terms of car taxation systems and car ownership levels. A decomposition by expenditure component of the Gini index is applied, using household-level data from repeated cross-sections of expenditure surveys spanning long time periods. The results highlight the effect of car social diffusion. The relative contribution of vehicle use items to total expenditure inequality decreases over time, thus reflecting the more and more widespread use of the car. Moreover, fuel taxes become regressive (i.e. they affect the poor more than the rich), while the progressive character of taxes on the remaining car use commodities weakens with time. Taxes on transport goods and services as a whole are progressive (i.e. they affect the rich more than the poor). However, this is principally due to the progressivity of taxes on automobile purchases. The progressivity of taxes on car purchases is by far much stronger in Denmark. In this country, these taxes are so high that car purchase costs can be afforded only by high incomes. These findings underline the fact that equity issues should not be overlooked when designing policies to attenuate the environmental impact of cars. Increasing car use costs, notably fuel prices, through an increase of uniform taxes would be particularly inequitable. |
| Keywords: | Inequality; transport consumption; household expenditure surveys; Gini index; decomposition by component; redistributive effects of taxes |
| JEL: | D12 H23 H24 R41 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:inq:inqwps:ecineq2010-159&r=eur |
| By: | Basilio, Leilanie (Ruhr Graduate School in Economics); Bauer, Thomas (RWI Essen) |
| Abstract: | This paper investigates the transferability of human capital across countries and the contribution of imperfect human capital portability to the explanation of the immigrant-native wage gap. Using data for West Germany, our results reveal that, overall, education and labor market experience accumulated in the home countries of the immigrants receive significantly lower returns than human capital obtained in Germany. We further find evidence for heterogeneity in the returns to human capital of immigrants across origin countries. Finally, imperfect human capital transferability appears to be a major factor in explaining the wage differential between natives and immigrants. |
| Keywords: | assimilation, immigration, rate of return, human capital |
| JEL: | J61 J31 J24 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4716&r=eur |
| By: | Giovanni Dosi; Marco Grazzi; Chiara Tomasi; Alessandro Zeli |
| Abstract: | Italy ranked last in terms of manufacturing productivity growth according to OECD estimates over the last decade with a flat, if not declining, trend. In this work we investigate the underlying firm-level dynamics of enterprises on the grounds of a database developed by the Italian Statistical Office (ISTAT) covering the period 1989-2004 and containing information on more than 100,000 firms. Over the period not only the indicators of central tendency of the distribution of labour productivities have not significantly changed, but also the whole sectoral distributions have remained relatively stable over time, with their support at least not shrinking or even possibly widening over time. This is even more surprising if one takes into consideration the 'Euro' shock that occurred during the period of investigation. On the contrary we observe that inter-decile differences in productivity have been increasing. Further, heterogeneous firms' characteristics (i.e. export activity and innovativeness) appear to have contributed to boost such intra-industry differences. Given such wide heterogeneities we resort to quantile regressions to identify the impact of a set of regressors at different levels of the conditional distribution of labor productivity. One phenomenon that we observe is what we call a tendency toward 'neo-dualism' involving the co-existence of a small group of dynamic firms with a bigger ensemble of much less technologically progressive ones. |
| Keywords: | productivity; firm dynamics; market selection; trade; euro shock; quantile regressions |
| JEL: | C14 D20 F10 L10 L16 L25 |
| Date: | 2010–01–28 |
| URL: | http://d.repec.org/n?u=RePEc:ssa:lemwps:2010/03&r=eur |
| By: | Holly, Sean (University of Cambridge); Pesaran, Hashem (University of Cambridge); Yamagata, Takashi (University of York) |
| Abstract: | This paper provides a method for the analysis of the spatial and temporal diffusion of shocks in a dynamic system. We use changes in real house prices within the UK economy at the level of regions to illustrate its use. Adjustment to shocks involves both a region specific and a spatial effect. Shocks to a dominant region – London – are propagated contemporaneously and spatially to other regions. They in turn impact on other regions with a delay. We allow for lagged effects to echo back to the dominant region. London in turn is influenced by international developments through its link to New York and other financial centers. It is shown that New York house prices have a direct effect on London house prices. We analyse the effect of shocks using generalised spatio-temporal impulse responses. These highlight the diffusion of shocks both over time (as with the conventional impulse responses) and over space. |
| Keywords: | house prices, cross sectional dependence, spatial dependence |
| JEL: | C21 C23 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4694&r=eur |