nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2010‒05‒22
seventeen papers chosen by
Giuseppe Marotta
University of Modena and Reggio Emilia

  1. Parental education and family characteristics: educational opportunities across cohorts in Italy and Spain By Antonio Di Paolo
  2. A Hybrid Approach to the Valuation of Climate Change Effects on Ecosystem Services: Evidence from the European Forests By Helen Ding; Silvia Silvestri; Aline Chiabai; Paulo A.L.D. Nunes
  3. Designing the payout phase of funded pension pillars in central and eastern European countries By Vittas, Dimitri; Rudolph, Heinz; Pollner, John
  4. Sickness Absence: a Pan-European Study By Livanos, Ilias; Zangelidis, Alexandros
  5. Assessing the Competitive Behaviour of Firms in the Single Market: A Micro-based Approach By Carlo Altomonte; Marcella Nicolini; Armando Rungi; Laura Ogliari
  6. Risk Analysis in Selected European and International Food Chains By Ameseder, Christoph; Haas, Rainer; Fritz, Melanie; Schiefer, Gerhard
  7. Agribusiness Firm Reactions to Regulations: The Case of Investments in Traceability Systems By Heyder, Matthias; Hollmann-Hespos, Thorsten; Theuvsen, Ludwig
  8. How to Design a Border Adjustment for the European Union Emissions Trading System? By Stéphanie Monjon; Philippe Quirion
  9. Automatic Stabilizers, Economic Crisis and Income Distribution in Europe By Dolls, Mathias; Fuest, Clemens; Peichl, Andreas
  10. Structural change in European calf markets: Policy decoupling and movement restrictions By Ihle, Rico; Brummer, Bernhard; Thompson, Stanley R.
  11. Reinforcing the EU Dialogue with Developing Countries on Climate Change Mitigation By Frank Vöhringer; Alain Haurie; Dabo Guan; Maryse Labriet; Valentina Bosetti; Pryadarshi R. Shukla; Philippe Thalmann
  12. Determinants of farm exit: A comparison between Europe and United States By Mishra, Ashok K.; Raggi, Merri; Viaggi, Davide
  13. Structural change in the EU dairy sector By Peerlings, Jack; Polman, Nico; Krol, Noortje
  14. Structural change of European dairy farms â A cross-regional analysis By Zimmermann, Andrea; Heckelei, Thomas
  15. Farm growth in Hungary, Slovenia and France By Bakucs, Lajos Z.; Bojnec, Stefan; Ferto, Imre; Latruffe, Laure
  16. Job creation and job destruction in the EU agriculture By Ciaian, Pavel; Dries, Liesbeth; Kancs, dâArtis
  17. Farm level effects of EU policy liberalization: Simulations based on an EU-wide agricultural sector model and a supply model of the German agricultural sector By Deppermann, Andre; Grethe, Harald; Offermann, Frank

  1. By: Antonio Di Paolo (Departament d'Economia Aplicada, Universitat Autònoma de Barcelona, Campus de Bellaterra, Edifici B 08193 Bellaterra (Cerdanyola), Spain. Institut d’Economia de Barcelona (IEB), Universitat de Barcelona)
    Abstract: Drawing on data contained in the 2005 EU-SILC, this paper investigates the disparities in educational opportunities in Italy and Spain. Its main objective is to analyse the predicted probabilities of successfully completing upper-secondary and tertiary education for individuals with different parental backgrounds, and the changes in these probabilities across birth cohorts extending from 1940 to 1980. The results suggest that the disparities in tertiary education opportunities in Italy tend to increase over time. By contrast, the gap in educational opportunity in Spain shows a marked decrease across the cohorts. Moreover, by using an intuitive decomposition strategy, the paper shows that a large part of the educational gap between individuals of different backgrounds is “composed” of the difference in the endowment of family characteristics. Specifically, it seems that more highly educated parents are more able to endow their children with a better composition of family characteristics, which accounts for a significant proportion of the disparities in educational opportunity.
    Keywords: Educational Opportunity, Family Background, Birth cohorts, Italy, Spain
    JEL: I21 J12 J62
    Date: 2010–05
  2. By: Helen Ding (University of Venice and FEEM); Silvia Silvestri (University of Venice); Aline Chiabai (FEEM); Paulo A.L.D. Nunes (University of Venice and FEEM)
    Abstract: In this paper we present a systematic attempt to assess economic value of climate change impact on forest ecosystems and human welfare. In the present study, climate change impacts are downscaled to the different European countries, which in turn constitute the elements of our analysis. First, we anchor the valuation exercise in the Millennium Ecosystem Assessment (MEA) Approach and therefore the link between the different forest ecosystem goods and services, including provisioning, regulating and cultural services, human well-being and climate change. Second, climate change is operationalized by exploring the different storylines developed by the International Panel on Climate Change (IPCC) and applied, downscaled, for each of the European countries under consideration. Third, and bearing in mind the different nature of the benefits provided by the different types of forest ecosystems under examination, we shall explore different economic valuation methodologies so as to shed light on the magnitude of the involved welfare changes. According to the estimation results the four different IPCC scenarios, i.e. A1F1, A2, B1 and B2, are associated to different welfare impacts. First, these reveal to depend on both the nature of the forest ecosystem service. For example, cultural values reveal to be more sensitive to the four IPCC scenarios than the other ones, with the wood forest products being more resilient to climate change. Second, the distributional impacts of climate change on the provision of these goods and services do also depend on the geo-climatic regions under consideration. For the Scandinavian group of countries, B1 is ranked with the highest level of provision of carbon sequestration services, amounting to 46.3 billion dollars. In addition, we can see that cultural services provided by forest ecosystems have their highest levels in the Mediterranean countries, ranging from 8.4 to 9.0 million dollars, respectively in the B2 and B1 scenarios. Finally, we can see that the total value of wood forest products ranges between 41.2 and 47.5 million dollars for Central Europe to 5.4 and 7.2 million dollars in Northern Europe, respectively A1 and A2 scenarios. For this service, Mediterranean Europe provides a relatively weak role in the provision with values ranging from 6.4 million dollars in A1 scenario to 8.7 million dollars in the B2. In short, and to conclude, the valuation results (1) may contribute to a better understanding of the potential welfare loss in the context of climate change and the economic trade-offs between potential mitigation or adaptation strategies; and (2) confirm that climate change will be responsible for a re-distribution of welfare among the European countries, signalling the potential for a(n) agreement(s) among these same countries focus on the re-allocation of potential trade-offs among the countries.
    Keywords: Wood Products, Biodiversity, Climate Change, Market and Non-market Valuation Methods, Ecosystem Goods and Services, Millennium Ecosystem Assessment
    JEL: Q57
    Date: 2010–05
  3. By: Vittas, Dimitri; Rudolph, Heinz; Pollner, John
    Abstract: Over the past decade or so, most Central and Eastern European countries have reformed their pension systems, significantly downsizing their public pillars and creating private pillars based on capitalization accounts. Early policy attention was focused on the accumulation phase but several countries are now reaching the stage where they need to address the design of the payout phase. This paper reviews the complex policy issues that will confront policymakers in this effort and summarizes recent plans and developments in four countries (Poland, Hungary, Estonia, and Lithuania). The paper concludes by highlighting a number of options that merit detailed consideration.
    Keywords: Debt Markets,Pensions&Retirement Systems,Financial Literacy,Insurance&Risk Mitigation,Investment and Investment Climate
    Date: 2010–04–01
  4. By: Livanos, Ilias; Zangelidis, Alexandros
    Abstract: This study, using the EU-LFS, examines the determinants of sickness absence in 26 EU countries. The analysis highlights the importance of demographic and workplace characteristics and of institutional and societal conditions. Female workers aged 26-35 exhibit higher absenteeism, possibly reflecting the level of high household labour pressure. Increased job insecurity, captured by temporary contracts, and labour market uncertainty, reflected in higher unemployment rates, have a negative effect on absenteeism. Finally, individual sickness absence is lower in countries with higher proportion of dependent/out of the labour market individuals, probably because of the increasing pressure labour active people may experience.
    Keywords: Absenteeism; sickness; EU; Labour Force Survey
    JEL: J28 J32 J22
    Date: 2010–05
  5. By: Carlo Altomonte; Marcella Nicolini; Armando Rungi; Laura Ogliari
    Abstract: This Report analyses and compares a number of indicators related to the evolution of the competitive behaviour of firms in the Single Market, from 1999 to 2007, in a selected number of both manufacturing and services industries and eight EU countries: Belgium, Germany, France, Italy, Poland, Romania, Spain and Sweden. A novelty of the approach is that the analysis is derived from firm-level observable data, which allow to grasp not only information on the average changes taking place in each industry and across countries, but also the distribution and sources of these changes in terms of individual firms' pricing behaviour and market shares, an information which is impossible to gather in detail from aggregate, traditional sector-level measures.
    Keywords: european union,eu,setzer,wolff,van den Noord,euro area,money,heterogeneity,money holdings
    JEL: L11
    Date: 2010–05
  6. By: Ameseder, Christoph; Haas, Rainer; Fritz, Melanie; Schiefer, Gerhard
    Abstract: The purpose of this study is to assess and evaluate the most important risks in selected European and international food chains from the perspective of the buying company. The primary objective is to identify the ânon-acceptableâ risks in terms of damage potential and likelihood of occurrence of value chains in the sectors grain, meat, fruit and vegetable, and olive oil. Data was collected by each partner of the European research project âe-trustâ (FP6-CT-2006-043056) by conducting 81 qualitative expert interviews with business leaders in Europe (Austria, Germany, Greece, Italy, Slovenia, Spain) as well as in Brazil, Turkey, and the USA. The study focuses on a wider supply chain or network perspective for the risk assessment. Methodically the assessed risks were classified and then evaluated using a risk map matrix. Results point out nonacceptable risks and show the differences concerning the risk evaluation in the different value chains. Results provide interesting supply chain management approaches in these sectors.
    Keywords: risk, risk analysis, supply chain, food, risk map, risk classification, Agribusiness, Agricultural and Food Policy, Farm Management, Food Security and Poverty, Industrial Organization, Institutional and Behavioral Economics, Risk and Uncertainty,
    Date: 2009–10
  7. By: Heyder, Matthias; Hollmann-Hespos, Thorsten; Theuvsen, Ludwig
    Abstract: Markets for agricultural and food products are characterized by high information asymmetries since producers, processors and retailers are in most cases much better informed about the quality of their products than consumers (Henson/Traill 1993). Often consumers are only at (prohibitively) high costs or not at all able to control important quality criterions such as food safety, nutritional value or region of origin. Such credence attributes can result in market failure due to a lack of credible information in the market (Akerlof 1970). As a result, attempts to protect consumers against food hazards, product adulteration and deception have gained much relevance in food supply chains (Deimel et al. 2008). Besides the more or less voluntary private certification schemes that have been established, large parts of the agrifood sector are already mandatorily regulated, especially in Europe. Therefore, in recent years, food law has been undergoing major changes in the European Union (EU) (Theuvsen/Hollmann-Hespos 2007; Haertel: 2007). General Food Law Regulation (EC) 178/2002 and the so-called EU hygiene package (Regulations (EC) 852/2004, 853/2004 and 854/2004) have strongly contributed to a much more intensive regulation of food production. The farm to fork approach laid down in Regulation (EC) 178/2002 has resulted in the obligation to secure âtraceability of food [â¦] at all stages of production, processing and distributionâ (Art. 18).
    Keywords: Agribusiness, Agricultural and Food Policy, Food Consumption/Nutrition/Food Safety, Research and Development/Tech Change/Emerging Technologies, Risk and Uncertainty,
    Date: 2009–10
  8. By: Stéphanie Monjon (Centre International de Recherche sur l’Environnement et le Développement (CIRED), CNRS); Philippe Quirion (Centre International de Recherche sur l’Environnement et le Développement (CIRED), CNRS)
    Abstract: Border adjustments are currently discussed to limit the possible adverse impact of climate policies on competitiveness and carbon leakage. We discuss the main choices that will have to be made if the European Union implements such a system alongside with the EU ETS. Although more analysis is required on some issues, on others some design options seem clearly preferable to others. First, the import adjustment should be a requirement to surrender allowances rather than a tax. Second, the general rule to determine the amount of allowances per ton imported should be the product-specific benchmarks that the European Commission is currently elaborating for a different purpose (i.e. to determine the amount of free allowances). Third, this obligation should apply when the exported product is registered at the EU border, and not after the end of the year as is the case for domestic emitters. Fourth, the export adjustment should take the form of a rebate on the amount of allowances a domestic emitter has to surrender. Five, this rebate should equal the above-mentioned product-specific benchmarks, not the emissions of the particular exporting plant or firm. Finally, the adjustment does not have to apply to consumer products but mostly to basic products.
    Keywords: Carbon Leakage, Border Adjustment, Border Tax Adjustment, EU ETS, Competitiveness
    JEL: Q38
    Date: 2010–04
  9. By: Dolls, Mathias (University of Cologne); Fuest, Clemens (University of Oxford); Peichl, Andreas (IZA)
    Abstract: This paper investigates to what extent the tax and transfer systems in Europe protect households at different income levels against losses in current income caused by economic downturns like the present financial crisis. We use a multi country micro simulation model to analyse how shocks on market income and employment are mitigated by taxes and transfers. We find that the aggregate redistributive effect of the tax and transfer systems increases in response to the shocks. But the extent to which households are protected differs across income levels and countries. In particular, there is little stabilization of disposable income for low income groups in Eastern and Southern European countries.
    Keywords: automatic stabilization, crisis, inequality, redistribution
    JEL: E32 E63 H2 H31
    Date: 2010–04
  10. By: Ihle, Rico; Brummer, Bernhard; Thompson, Stanley R.
    Abstract: We analyse weekly calf prices from 2003 to 2009 to assess the impact of two important events which changed the structure of European cattle markets. We find the four European calf markets studied to be integrated. The decoupling of farm payments in the framework of the 2003 reforms of the Common Agricultural Policy is found to reduce prices. We ascertain that the outbreak of the Blue Tongue disease induced a structural change in some of the markets. Using counterfactual scenarios, we provide an indication of the effects resulting from granting member states a high degree of discretion in implementation.
    Keywords: 2003 CAP reform, cattle market, decoupling, European Union, market integration, Agricultural and Food Policy, Farm Management, Land Economics/Use,
    Date: 2010–04
  11. By: Frank Vöhringer (Ecole Polytechnique Fédérale de Lausanne); Alain Haurie (ORDECSYS); Dabo Guan (University of Cambridge); Maryse Labriet (KANLO Consultants); Valentina Bosetti (Fondazione Eni Enrico Mattei); Pryadarshi R. Shukla (Indian Institute of Management Ahmedabad); Philippe Thalmann (Ecole Polytechnique Fédérale de Lausanne)
    Abstract: The FP6 TOCSIN project has evaluated climate change mitigation options in China and India and the conditions for strategic cooperation on research, development and demonstration (RD&D) and technology transfer with the European Union. In particular, the project investigated the strategic dimensions of RD&D cooperation and the challenge of creating incentives to encourage the participation of developing countries in post-2012 GHG emissions reduction strategies and technological cooperation. This paper summarizes the main policy-relevant results of the project, including the requests for: (I) almost immediate decisions on ambitious mitigation; (II) a strong increase in Annex I support regarding R&D spending and technology transfer; (III) a well-designed mix of instruments and targets in an effective climate deal that addresses manifold national interests and concerns.
    Keywords: Climate Policy, Technology Transfers
    JEL: Q54 Q55
    Date: 2010–04
  12. By: Mishra, Ashok K.; Raggi, Merri; Viaggi, Davide
    Abstract: In the last three decades, European Union (EU) agriculture has been characterized by major exit of farming households from agriculture. In some areas the share of exit has been as high as 40%. Similar pattern has also been observed in the United States (US), where the exit rates are about 9-10 percent per year. Understanding the exit behavior is a key to the future farm structure, management of abandoned land, depopulation of rural areas, and agricultural policy, including government program payments. The main objective of this paper is to review the theoretical background and empirically estimate the determinants of exit decisions through a comparative econometric analysis in the US and the EU.
    Keywords: farm exit, logit model, US, EU, Agricultural and Food Policy, Farm Management, Land Economics/Use,
    Date: 2010–04
  13. By: Peerlings, Jack; Polman, Nico; Krol, Noortje
    Abstract: The aim of this paper to determine how structure and governance in the dairy sector in four different regions in the European Union alter as a result of the change in EUâs dairy policy. For this purpose two models of structural change are developed and interviews are held. Results differ between the regions depending on whether or not they are export oriented, their growth in farm size and farm exit rates.
    Keywords: Structural change, dairy policy, governance, Agricultural and Food Policy, Farm Management, Land Economics/Use,
    Date: 2010–04
  14. By: Zimmermann, Andrea; Heckelei, Thomas
    Abstract: Previous analyses of dairy farm structural change focused on the variation over time in one or a small number of regions. Here we present an EU-15-wide analysis of the change of the number of farms in different size classes. The purpose is (1) to identify the differences in regional development patterns and (2) to measure the explanatory relevance and effect of key factors suggested in the literature. Apart from the unprecedented scope, the underlying Markov chain analysis also contributes by combining observed transitions in micro data with macro data on farm numbers. Results show widely significant impacts of most explanatory variables, but also reveal the complexity of the underlying processes.
    Keywords: Agricultural and Food Policy, Farm Management, Land Economics/Use,
    Date: 2010–04
  15. By: Bakucs, Lajos Z.; Bojnec, Stefan; Ferto, Imre; Latruffe, Laure
    Abstract: The article investigates the validity of Gibratâs Law for French, Hungarian and Slovenian farms with FADN data and Heckman selection models, quantiles regressions and panel unit root tests. The contribution to the literature is threefold. First, we compare farm growth in countries with rather different farm structures. Second, we apply two different testing techniques. Finally, we focus on specialised crop and dairy farms rather than all farms, avoiding biases due to heterogeneous structures across the agricultural sector. Results reject the Gibratâs Law for crop farms in France (except for one sub-period) and Hungary but confirm it for French and Slovenian dairy farms.
    Keywords: Agricultural and Food Policy, Farm Management,
    Date: 2010
  16. By: Ciaian, Pavel; Dries, Liesbeth; Kancs, dâArtis
    Abstract: This is the first paper to study job creation and destruction in EU agriculture. We disaggregate employment patterns and job flows into detailed intra-sectoral labour adjustment dynamics based on farm level panel observations from 1989-2006. We find that: (1) job creation and destruction rates in EU agriculture are high compared to other sectors; (2) there are important differences in job creation and destruction rates between different member states; (3) this can be attributed to differing initial farm structures: member states with small average farm sizes display higher job creation and destruction rates than those with larger average farm sizes.
    Keywords: Job creation, job destruction, FADN, EU, agricultural labour adjustment, Agricultural and Food Policy, Farm Management, Land Economics/Use,
    Date: 2010–04
  17. By: Deppermann, Andre; Grethe, Harald; Offermann, Frank
    Abstract: The impact of sectoral or economy wide policy scenarios is often of strong political and public interest, yet it is a scientific challenge. When analyzing different levels of aggregation, the use of single models may not be sufficient. In this paper we establish an interface between the European Simulation Model (ESIM) and the Farm Modelling Information System (FARMIS). The linkage of the two models allows us to quantify adjustment processes both at the sectoral level and at the farm group level for the German agricultural sector. Different liberalization scenarios are presented and compared to a reference scenario. The abolishment of market price support leads to a reduction of farm incomes, especially if direct payments are also reduced. The low absolute level of return to labor, particularly in grazing livestock farms, suggests strong changes in farm structure as well as the farm input industry in Germany under the full liberalization scenario.
    Keywords: Model Linkage, Policy Impact Assessment, Income Distribution, Agricultural and Food Policy, Farm Management, Land Economics/Use,
    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.