nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2010‒04‒24
eight 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. Testing the Martingale Difference Hypothesis in the EU ETS Markets for the CO2 Emission Allowances: Evidence from Phase I and Phase II By Amélie Charles; Olivier Darné; Jessica Fouilloux
  3. Innovation in Times of Crisis: The Uneven Effects of the Economic Downturn across Europe By Filippetti, Andrea; Archibugi, Daniele
  4. Ethnicity and Second Generation Immigrants in Britain By Christian Dustmann; Tommaso Frattini; Nikolaos Theodoropoulos
  5. The agenda set by the EU Commission: the result of balanced or biased aggregation of positions? By Miriam Hartlapp; Julia Metz; Christian Rauh
  6. Does Marriage Matter for Children? Assessing the Impact of Legal Marriage in Sweden By Björklund, Anders; Ginther, Donna K.; Sundström, Marianne
  7. Promoting Employment of Disabled Women in Spain; Evaluating a Policy By Judit Vall Castello
  8. Tariff Rates, Offshoring and Productivity: vidence from German and Austrian Firm-Level Data By Thorsten Hansen

  1. By: Gianna Claudia Giannelli (Università degli Studi di Firenze, Dipartimento di Scienze Economiche); Ursula Jaenichen (Institute for Employment Research); Claudia Villosio (LABORatorio R. Revelli, Collegio Carlo Alberto)
    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 able 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, two countries which have undergone changes in regulations that can be summarised under the header of “deregulation”.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: 2010
  2. By: Amélie Charles (Audencia Nantes, School of Management - Audencia, School of Management); Olivier Darné (LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - Université de Nantes : EA4272); Jessica Fouilloux (CREM - Centre de Recherche en Economie et Management - CNRS : UMR6211 - Université de Rennes I - Université de Caen)
    Abstract: This study examines the martingale difference hypothesis (MDH) for the market of carbon emission allowances within the European Union Emission Trading Scheme (EU ETS) during the Phase I and the Phase II, using both daily and weekly data over the period 2005--2009. The weak-form efficient market hypothesis for spot prices negotiated on BlueNext, European Energy Exchange and NordPool is tested with new variance ratio tests developed by Kim (2009). For the Phase I, the results show that these three markets of the European Union allowances seems to be efficiency, except after the European Commission announcements of stricter Phase II allocation in October 2006. Finally, we find that the CO2 spot prices seem to be weak-form efficiency during the Phase II since the MDH is failed to reject from both daily and weekly data.
    Date: 2010
  3. By: Filippetti, Andrea; Archibugi, Daniele
    Abstract: This article addresses the impact of the current economic downturn on innovation across Europe. Using micro and macro data we investigate to what extent some characteristics of a country affect the reaction of its firms in terms of innovation investment. It emerges that the effects of the economic downturn in terms of firms’ innovation investment are not the same across European countries. The competences and quality of the human resources, the specialization in the hi-technology sector together with the depth of the financial system seem to be the structural factors which are able to offset the effect of the economic downturn on innovation investments of firms across Europe. Finally, some considerations about policies during the crisis are discussed.
    Keywords: innovation investment; business cycles; national innovation systems; European Innovation Policy; financial crisis
    JEL: O38 E32 O3
    Date: 2010–04
  4. By: Christian Dustmann (University College London & Centre for Research and Analysis of Migration (CReAM)); Tommaso Frattini (University of Milan, CReAM, LdA and IZA); Nikolaos Theodoropoulos (University of Cyprus and CReAM)
    Abstract: This paper reviews the labour market performance and educational attainment of ethnic minorities and second generation immigrants in the UK over the last three decades. We first describe the size and composition of the minority population and its regional distribution over time, and investigate their labour market performance relative to the white native population. We then present an intergenerational comparison of education, employment, and wages of different ethnic minority groups born in Britain to their parents’ generation, and to equivalent groups of white native born individuals. We conclude with a summary of recent research on the school performance of children from ethnic minorities relative to their white peers.
    Keywords: Ethnic minorities, Second generation immigrants, Intergenerational comparison.
    JEL: J15 J61 J62
    Date: 2010–03
  5. By: Miriam Hartlapp; Julia Metz; Christian Rauh
    Abstract: Substantial theoretical and conceptual advances have been made with respect to agenda-setting as a determinant for policy outcomes. An actor-centred perspective on frames and venues is core to this literature, structure as a single standing category has received less attention. In this paper we argue that these results should be combined with bureaucratic politics in the European Commission to further our understanding of agenda setting processes in the European Union. Typically, a legislative proposal of the Commission is produced by a lead department which collaborates with a number of other departments on a partly formalized basis before a joint Commission decision is taken. Different services hold different positions on specific policies. We show that structures and rules governing the process yield the potential for some positions to be systematically more strongly represented in the proposals entering inter-institutional decision-making. We complement our argument by providing evidence of interaction patterns when it comes to internal coordination.
    Date: 2010–04
  6. By: Björklund, Anders (Swedish Institute for Social Research, Stockholm University); Ginther, Donna K. (Dept. of Economics); Sundström, Marianne (Swedish Institute for Social Research, Stockholm University)
    Abstract: This paper examines whether parental marriage confers educational advantages to children relative to cohabitation. We exploit a dramatic marriage boom in Sweden in late 1989 created by a reform of the Widow’s Pension System that raised the attractiveness of marriage compared to cohabitation to identify the effect of marriage and the effect of selection bias on marriage estimates. Sweden’s rich administrative data sources enable us to identify the children who were affected by parental marriage due to this marriage boom. Our analysis addresses the question of whether marginal marriages created by a policy initiative have an impact on children. Using grade point average at age 16 as the outcome variable, we first show the expected pattern that children with married parents do better than children with cohabiting parents. However, once we control for observable family background and compare the outcomes for children whose parents married due to the reform with those for children whose parents remained unmarried, the differences largely disappear. The results from a sibling difference analysis are consistent with the conclusion that the differentials among children of married and cohabiting parents reflect selection rather than causation.
    Keywords: family structure; marriage; child well-being; educational attainment
    JEL: J10 J12 J13 J18
    Date: 2010–03–31
  7. By: Judit Vall Castello
    Abstract: The Social Security system is Spain provides four different types of permanente disability pensions which are granted according to the severity of the disabling condition and the remaining capacity to work that is left for these individuals. Therefore, the system is designed to allow for a certain part of the disabled individuals to work while receiving the disability pension. However, the majority of these individuals do not effectively work and employment rates for this group of people have remained very low since 1996. The aim of this research is to evaluate the results of an employment promotion policy introduced in 2004 which increased the deductions of the Social Security contributions paid by employers that hire disabled women. In order to do that we first analyze employment rates of disabled individuals in Spain from 1996 until 2007 followed by the estimation of a bivariate probit model to evaluate the existence of shifts in employment trends in the women relative to the men sample conditioning on the existence of preexisting trends. We find that the increase in the deductions of the Social Security contributions resulted in rises in employment rates for disabled women with respect to disabled men.
    Date: 2010–03
  8. By: Thorsten Hansen (University of Munich)
    Abstract: This paper studies the impact of trade liberalization in terms of tariff cuts within the Eastern European enlargement on German and Austrian firm productivity. Unique matching of data from 1994 to 2003 suggests that tariff reductions raise parent firm productivity significantly. A ten percentage point decrease in tariff rates can lead to total factor productivity gains of up to 2 percent. The data allow distinction between three types of tariffs: output, intra-firm and input tariff rates. The size of the results strongly depends on the type of tariff and country analyzed.
    JEL: F12 F13 F23 L22 L23 O14
    Date: 2010–04

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.