nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2010‒05‒29
nine papers chosen by
Giuseppe Marotta
University of Modena and Reggio Emilia

  1. Labour market status, transitions and gender: a European perspective By Mathilde Guergoat-Larivière; Christine Erhel
  2. One TV, one price?. By Imbs, J.; Mumtaz, H.; Ravn, M.O.; Rey, H.
  3. Are systems of innovation in Eastern Europe efficient?. By Kravtsova, V.; Radošević, S.
  4. Changes in the wage structure in EU countries By Rebekka Christopoulou; Juan F. Jimeno; Ana Lamo
  5. The economic situation of first-and second-generation immigrants in France, Germany, and the UK. By Algan, Y.; Dustmann, C.; Glitz, A.; Manning, A.
  6. The elusiveness of neutrality – why is it so difficult to apply VAT to financial services? By Kerrigan, Arthur
  7. The margins of labour cost adjustment: survey evidence from european firms By Jan Babecký; Philip Du Caju; Theodora Kosma; Martina Lawless; Julián Messina; Tairi Rõõm
  8. European Commission decisions on anti-competitive behavior By Gual, Jordi; Mas, Nuria
  9. Climate Change Uncertainty Quantification: Lessons Learned from the Joint EU-USNRC Project on Uncertainty Analysis of Probabilistic Accident Consequence Codes By Cooke, Roger M.; Kelly, G.N.

  1. By: Mathilde Guergoat-Larivière (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, CEE - Centre d'études de l'emploi - Ministère de l'Enseignement Supérieur et de la Recherche Scientifique); Christine Erhel (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I, CEE - Centre d'études de l'emploi - Ministère de l'Enseignement Supérieur et de la Recherche Scientifique)
    Abstract: This article analyses the determinants of labour market statuses (choice between part time employment, full time employment, and non employment) and yearly transitions between non employment and employment in Europe, using cross sectional 2006 EU-SILC database. The results show a strong positive effect of initial education level on full time employment integration and on the probability to find a job when initially in non employment. Gender and family variables also exert a strong influence on labour market statuses and mobility: being a woman, and even more a mother of a young child, increases the probability to be in non employment, or in part time employment, and also to experience a bad transition. In terms of policies, the article shows that the use of childcare has a positive impact on parents'employment and transitions. Finally, the heterogeneity inside the EU appears high, with significant country effects on both statuses and flows.
    Keywords: labour market status; labour market flows; European comparison; childcare
    Date: 2010–05–10
  2. By: Imbs, J.; Mumtaz, H.; Ravn, M.O.; Rey, H.
    Abstract: We use a unique dataset on television prices across European countries and regions to investigate the sources of differences in price levels. Our findings are as follows: (i) Quality is a crucial determinant of price differences. Even in an integrated economic zone as Europe, rich economies tend to consume higher quality goods. This effect accounts for the lion’s share of international price dispersion. (ii) Sizable international price differentials subsist even for the same television sets. The average bilateral price difference is as high as 80 euros, or 8% of the average TV price in our sample. (iii) EMU countries display lower price dispersion than non-EMU countries. (iv) absolute price differentials and relative price volatility are positively correlated with exchange rate volatility, but not with conventional measures of transport costs. (v) Importantly we show brand premia are sizable. They differ markedly across borders, in a way that does not correlate with transport costs, nor exchange rate movements. Taken together, the evidence is consistent firms exploiting market power through brand values to price discriminate across borders.
    Date: 2009–10
  3. By: Kravtsova, V.; Radošević, S.
    Abstract: This paper explores the determinants of the productivity in the countries of Eastern Europe (EE) through the perspective of ‘narrow’ and ‘broad’ national systems of innovation (NSI). Based on panel econometrics it examines the extent to which systems in EE could be considered ‘(in)efficient’. Our results suggest that the EE countries have lower levels of productivity than might be expected given their research and development (R&D), innovation and production capabilities. The inefficiencies of ‘broad’ NSI are compounded by the inefficiencies of ‘narrow’ NSI in terms of generating numbers of science and technology publications and resident patents relative to R&D employment, compared to the rest of the world. Our results point to an important distinction between technology and production capability as the drivers of productivity improvements, and provide some policy implications.
    Date: 2009–11
  4. By: Rebekka Christopoulou (Bronfenbrenner Life Course Center, Beebe Hall, Cornell University, Ithaca, NY 14853, USA.); Juan F. Jimeno (Banco de España, Alcalá 50, 28014 Madrid, Spain.); Ana Lamo (European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main, Germany.)
    Abstract: We study changes in the wage structures in nine EU countries over 1995-2002 and the role of demand, supply and institutional developments in shaping these changes. Using comparable cross-country microeconomic data, we compute for each country and at each decile of the wage distribution, the part of the observed wage change that is due to changes in the composition of workers, employers, and jobs’ characteristics, and the part due to changes in the returns to these characteristics. We find that composition effects derived from changes in age, gender or education of the labour force, largely exogenous to economic developments, had a minor contribution to the observed wage dynamics. In contrast, return and composition effects from characteristics likely driven by economic developments are found most relevant to explain the observed changes. We relate wages and their various components with macroeconomic and institutional trends and find that technology and globalisation are associated with wage increases; migration is associated with declines in wages; whereas the effect of labour market institutions has been mixed. JEL Classification: J31.
    Keywords: Wage Structure, Quantile Regressions.
    Date: 2010–05
  5. By: Algan, Y.; Dustmann, C.; Glitz, A.; Manning, A.
    Abstract: A central concern about immigration is the integration into the labour market, not only of the first generation, but also of subsequent generations. Little comparative work exists for Europe’s largest economies. France, Germany and the UK have all become, perhaps unwittingly, countries with large immigrant populations albeit with very different ethnic compositions. Today, the descendants of these immigrants live and work in their parents’ destination countries. This paper presents and discusses comparative evidence on the performance of first- and second-generation immigrants in these countries in terms of education, earnings, and employment.
    Date: 2009–09
  6. By: Kerrigan, Arthur
    Abstract: Under the VAT system of the European Union, domestic supplies of financial services are exempt. That exemption has significant drawbacks, not least of which is that it compromises the neutrality of the tax. In this article, the author indicates how, depending on government policy views, margin-based financial services could be taxed. He also indicates how financial institutions could give new impetus to the discussion on the VAT treatment of the services in that sector.
    Keywords: VAT; Financial Services; neutrality; EU
    JEL: K3
    Date: 2010–03–18
  7. By: Jan Babecký (Czech National Bank); Philip Du Caju (National Bank of Belgium); Theodora Kosma (Bank of Greece); Martina Lawless (Central Bank and Financial Services Authority of Ireland); Julián Messina (World Bank and University of Girona); Tairi Rõõm (Bank of Estonia)
    Abstract: Firms have multiple options at the time of adjusting their wage bills. However, previous literature has mainly focused on base wages. We broaden the analysis beyond downward rigidity in base wages by investigating the use of other margins of labour cost adjustment at the firm level. Using data from a unique survey, we find that firms make frequent use of other, more flexible, components of compensation to adjust the cost of labour. Changes in bonuses and non-pay benefits are some of the potential margins firms use to reduce costs. We also show how the margins of adjustment chosen are affected by firm and worker characteristics.
    Keywords: J30, C81, P5
    Date: 2009–12
  8. By: Gual, Jordi (IESE Business School); Mas, Nuria (IESE Business School)
    Abstract: This paper provides an analysis of all the European Commission's decisions on anti-trust cases between January 1999 and February 2004. We use a unique dataset that contains information not only on the cases that were analyzed by the Commission and for which a decision was finally made public, but also on all the cases that were never pursued any further and those for which there is no final public decision. We have two goals. First, this data allows us, for the first time in the literature, to determine whether there is any type of bias in the selection process followed by the Commission when deciding which cases to pursue until a final decision is reached. Our results show that the selection of cases is not random and that it is quite efficient. Second, we can help to determine whether the criteria that have been shown by the economic literature to play an important role in anti-competitive behavior are also important for the Commission's decisions in anti-trust cases. Our results suggest that this is the case.
    Keywords: Anti-trust; competition; selection bias;
    Date: 2010–03–03
  9. By: Cooke, Roger M. (Resources for the Future); Kelly, G.N.
    Abstract: Between 1990 and 2000 the U.S. Nuclear Regulatory Commission and the Commission of the European Communities conducted a joint uncertainty analysis of accident consequences for nuclear power plants. This study remains a benchmark for uncertainty analysis of large models involving high risks with high public visibility, and where substantial uncertainty exists. The study set standards with regard to structured expert judgment, performance assessment, dependence elicitation and modeling and uncertainty propagation of high dimensional distributions with complex dependence. The integrated assessment models for the economic effects of climate change also involve high risks and large uncertainties, and interest in conducting a proper uncertainty analysis is growing. This article reviews the EU-USNRC effort and extracts lessons learned, with a view toward informing a comparable effort for the economic effects of climate change.
    Keywords: uncertainty analysis, expert judgment, expert elicitation, probabilistic inversion, dependence modeling, nuclear safety
    Date: 2010–05–20

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