nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2010‒11‒20
fifteen papers chosen by
Giuseppe Marotta
University of Modena and Reggio Emilia

  1. External Dimension of EU Social Policy By Werner Eichhorst; Michael J. Kendzia; Jonathan Benjamin Knudsen; Mette Okkels Hansen; Barbara Vandeweghe; Ingrid Vanhoren; Eva Rückert; Bernd Schulte
  2. Coverage and adequacy of Minimum Income schemes in the European Union By Figari F; Haux T; Matsaganis M; Sutherland H
  3. The Impact of Demographic Change, Co-morbidity and European Care Policies on the Choice of Care Arrangement By Annika Meng
  4. Review of Methodologies Applied for the Assessment of Employment and Social Impacts By Jan Maarten de Vet; Simon Roy; Hilmar Schneider; Vincent Thio; Gerbrand van Bork
  5. Agriculture in the Western Balkan Countries By Volk, Tina; Rednak, Miroslav; Erjavec, Emil; Cela, Roland; Marku, Shkelzen; Imami, Drini; MikuÅ¡, Ornella; Cerjak, Marija; Dimitrievski, Dragi; Georgiev, Nenad; Simonovska, Ana; Stojceska, Aleksandra Martinovska; Kotevska, Ana; Božidarka, MarkoviÄ; Bogdanov, Natalija; Bozic, Dragica
  6. Controlling Shareholders and the Acquisition Premiums Paid in European Takeover Bids By M.F. Thraya; J. Hagendorff
  7. Italian households and labour market: structural characteristics and effects of the crisis By Sauro Mocetti; Elisabetta Olivieri; Eliana Viviano
  8. Immigration, factor endowments and the productive structure of Spanish regions By Guadalupe Serrano; Francisco Requena; Joan Martin-Montaner
  9. The Impact of University Research on Corporate Patenting By Christian Helmers; Mark Rogers
  10. Are Immigrants Graded Worse in Primary and Secondary Education? – Evidence for German Schools By David Kiss
  11. Child care subsidies revisited By Egbert Jongen
  12. Social Pensions in Europe: The Aim, The Impact and The Cost By Frieda Vandeninden
  13. Direct job creation in Germany revisited : Is it effective for welfare recipients and does it matter whether participants receive a wage? By Hohmeyer, Katrin; Wolff, Joachim
  14. Does Hospital Competition Save Lives? Evidence from the English NHS Patient Choice Reforms By Zack Cooper; Steve Gibbons; Simon Jones; Alistair McGuire
  15. The distributional impact of reforms to disability benefits for older people in the UK By Hancock R; Pudney S

  1. By: Werner Eichhorst (IZA); Michael J. Kendzia (IZA); Jonathan Benjamin Knudsen (NIRAS); Mette Okkels Hansen (NIRAS); Barbara Vandeweghe (IDEA); Ingrid Vanhoren (IDEA); Eva Rückert (WIFO); Bernd Schulte (MPISOC)
    Abstract: Report based on a study conducted for the European Parliament, Bonn 2010 (95 pages)
    Date: 2010–10
  2. By: Figari F (Institute for Social and Economic Research); Haux T (Institute for Social and Economic Research); Matsaganis M (Athens University of Economics and Business); Sutherland H (Institute for Social and Economic Research)
    Abstract: The purpose of this paper is to explore and compare the effectiveness of Minimum Income (MI) schemes in protecting people of working age from poverty in the European Union. Using the EU-wide microsimulation model EUROMOD, we investigate (a) coverage and (b) adequacy of MI schemes in 18 countries. In contrast to previous comparative studies of MI benefits, relying on comparisons of the effects on stylised families, we are able to capture the full range of individual and household circumstances and to quantify the effects on people entitled to MI schemes using a comparable approach across countries.
    Date: 2010–11–10
  3. By: Annika Meng
    Abstract: Recent literature on long-term care looks at the substitutability of informal and professional home-based care arrangements. Other factors that influence the utilization of informal care instead of formal care have been ignored in conditional analyses so far. However, regressors that represent demographic change and the development of co-morbidity are of crucial interest to forecast the future choice between different care services. Therefore, I use SHARE data from 2004 as they contain rich information on illnesses, health limitations, and health behavior. I estimate bivariate and multivariate probit models to identify the determinants of different care arrangements, namely informal care, professional home-based care, or a combination of both types, as well as living in a nursing home. Unobserved factors that affect all forms of care arrangements simultaneously can be accounted for. Moreover, I use data on European long-term care expenditure to examine the effects that public spending has on the choice of care arrangements. Simulations of different scenarios of demographic change illustrate that the developments in frailty are decisive for the future care market structure.
    Keywords: Care arrangement choice; multivariate probit model; European care expenditure provision gap
    JEL: I38 J11 J14
    Date: 2010–11
  4. By: Jan Maarten de Vet (ECORYS); Simon Roy (ECORYS); Hilmar Schneider (IZA); Vincent Thio (ECORYS); Gerbrand van Bork (ECORYS)
    Abstract: Joint report with ECORYS Netherlands for the DG Employment, Social Affairs and Equal Opportunities of the European Commission, Bonn 2010 (217 pages)
    Date: 2010–01
  5. By: Volk, Tina; Rednak, Miroslav; Erjavec, Emil; Cela, Roland; Marku, Shkelzen; Imami, Drini; MikuÅ¡, Ornella; Cerjak, Marija; Dimitrievski, Dragi; Georgiev, Nenad; Simonovska, Ana; Stojceska, Aleksandra Martinovska; Kotevska, Ana; Božidarka, MarkoviÄ; Bogdanov, Natalija; Bozic, Dragica
    Abstract: The current publication covers Albania, Bosnia-Herzegovina, Croatia, Kosovo under UNSCR 1244/99, the FYR Macedonia, Montenegro and Serbia, and provides an overview of the agricultural situation in the European Union (EU) candidate and potential candidate countries of the Western Balkans (WBs). The objective was to provide an analysis of the development and current situation in agriculture and agricultural policy in these countries as relates to the EU accession process. The individual country reports, as well as a cross-country overview and comparison, have been prepared as a part of "AgriPolicy" project, which was financially supported by the European Commission under the 7th framework program.
    Keywords: Agricultural and Food Policy, Community/Rural/Urban Development, Institutional and Behavioral Economics, Political Economy,
    Date: 2010
  6. By: M.F. Thraya (CERAG - Centre d'études et de recherches appliquées à la gestion - CNRS : UMR5820 - Université Pierre Mendès-France - Grenoble II); J. Hagendorff (The University of Edinburgh BS - Business School)
    Abstract: This paper examines the incentives of controlling shareholders in the market for corporate control. We investigate the takeover premiums paid by a sample of European acquiring firms with concentrated voting rights structures. The results show a positive relationship between takeover premiums and the bidder's concentration of both voting rights and excess voting rights over cash-flow rights. With higher levels of bidder entrenchment, the valuation of a takeover target increasingly reflects the private benefits of control which bidders seek to extract from a deal
    Keywords: Controlling shareholders ; separation between the ownership and the control ; takeover premiums ; private benefits
    Date: 2010
  7. By: Sauro Mocetti (Banca d'Italia); Elisabetta Olivieri (Banca d'Italia); Eliana Viviano (Banca d'Italia)
    Abstract: This analysis aims at studying joblessness and the effect of the economic crisis at the household rather than the individual level. With respect to the main European countries, in Italy the jobless household rate is lower because of the larger household size (the more adults present the lower the risk of joblessness) and the greater propensity to link household formation to employment status. The effects of the economic crisis on the labour market have led to an increase in the jobless household rate. However this increase has been lower than expected, thus suggesting that Italian households have partly absorbed the negative shocks in the labour market. Within households, the job losses mostly related to young people still living with their parents, reflecting an employment protection system that is segmented on a generational basis.
    Keywords: jobless household, distribution of work
    JEL: D1 J6
    Date: 2010–10
  8. By: Guadalupe Serrano (Dept. of Economic Analysis. Faculty of Economics. University of Valencia); Francisco Requena (Dept. of Economic Analysis. Faculty of Economics. University of Valencia); Joan Martin-Montaner (Dept. of Economics. Universitat Jaume I de Castelló)
    Abstract: Participation of immigrants in Spanish labour market increased from less than 3 percent in 1996 to more than 13 percent in 2005. We use the factor proportion model of production to examine the impact of such a large labour supply shock on the industrial structure of Spanish regions. The results confirm that, first, labour endowment differences across regions help to explain the pattern of industry specialisation across regions. Second, immigrants and natives act as complementary factors in most industries. Third, the importance of immigration is relatively small compared to production technique changes and idiosyncratic industry changes in explaining the overall changes in industrial structure from 1996 to 2005.
    Keywords: Rybczynski Effect, immigration, production specialisation, technological change
    JEL: F22 R11 R13
    Date: 2010–11
  9. By: Christian Helmers; Mark Rogers
    Abstract: This paper analyses the association between the number of patenting manufacturing firms andthe quantity and quality of relevant university research across UK postcode areas. We showthat different measures of research `power' and `excellence' positively affect the patenting ofsmall firms within the same postcode area. Patenting by large firms, in contrast, is unaffectedby research undertaken in nearby universities. This confirms the commonly held view thatlocation matters more for small firms than large firms. We also investigate specific channelsof technology transfer, finding that university-industry knowledge transfer occurs throughboth formal and informal channels. From a methodological point of view, we contribute tothe existing literature by accounting for potential simultaneity between university researchand patenting of local firms by adopting an instrumental variable approach. Moreover, wealso allow for the effects of the presence of universities in neighbouring postcode areas toinfluence firms' patenting activity by incorporating spatial neighborhood effects.
    Keywords: Patents, universities, knowledge transfer, spillover, UK
    JEL: L22 L26 O34
    Date: 2010–09
  10. By: David Kiss
    Abstract: Using PIRLS 2001 and PISA 2003 data for Germany, this paper examines whether immigrants attending primary and secondary school are graded worse in math than comparable natives. Controlling for differences in math skills, class fixed effects regressions and results of a matching approach suggest that immigrants have grade disadvantages in primary education. In Germany, track choice after primary education is mainly determined by the average of grades obtained in math and German. Hence, grade disadvantages could lead to lower level track choice. Immigrants who attend the most common secondary school tracks are not graded differently from natives.
    Keywords: Grading; educational system; migration background; matching
    JEL: C40 I21 J15
    Date: 2010–11
  11. By: Egbert Jongen
    Abstract: Public spending on child care has taken a high flight in the Netherlands. One of the key policy goals of child care subsidies is to stimulate labour participation. We study the impact of child care subsidies on labour participation using a general equilibrium model. Next to the labour supply choice, we also model the choice over formal and informal care. The choice between formal and informal care plays an important role in the overall impact of child care subsidies on labour participation. The model is calibrated to Dutch data. Our analysis shows that existing child care subsidies have promoted labour participation. However, at the current average subsidy rate of almost 80%, a further increase in the subsidy rate is a rather ineffective way to promote formal participation, the main effect being substitution of informal for formal care.
    Keywords: child care subsidies; labour participation; general equilibrium
    Date: 2010–02
  12. By: Frieda Vandeninden
    Abstract: The aim of this paper is to evaluate the impact in terms of poverty and cost of the introduction of social (or noncontributory) pensions in Europe. We use data from the household survey EU-SILC and focus on 17 countries. After reviewing the existence of social pensions in Europe and evidence of old-age poverty, we simulate – in a static framework – the introduction of two social pension schemes: universal and means tested social pensions. We see that the old-age poverty would substantially decrease (average poverty rate goes from 19.7 to 2.5 percent with the universal scheme) but not totally, even though the level of the universal pension is set up to the poverty line. The impact on poverty with the means tested social pension is quite similar (though always smaller) than the one with the universal pension, since most elderly have few other income sources than pensions. On the opposite, it costs less. In fact, the means test reduces substantially the number of entitled elderly while the universal pension leads to a ‘leakage’ to non-poor elderly.
    Date: 2010
  13. By: Hohmeyer, Katrin (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Wolff, Joachim (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])
    Abstract: "Bringing welfare recipients into jobs is a major goal of German labour market policy since a reform of the year 2005. Direct job creation providing participants with temporary subsidized jobs mainly in the non-profit sector plays an important role for achieving this goal. There are three schemes that differ only with respect to a few features: traditional job creation schemes, One-Euro-Jobs and work opportunities subsidising contributory jobs. We study and compare the effectiveness of these three job creation schemes for welfare recipients starting their participation in these programmes in mid 2005. Looking at three similar schemes enables us to study the implications of different programme features for the effectiveness. One major differ-ence between the schemes is that traditional job creation schemes and work opportunities as contributory jobs provide participants with regular earnings, whereas One-Euro-Job participants only receive their benefit and on top a small allowance to cover costs of working. Hence, participation in One-Euro-Jobs in contrast to the other two programmes should provide higher incentives to search for regular jobs during participation. We estimate participation effects on employment outcomes, earnings and welfare benefit levels with propensity score matching using rich administrative data. We find that the programmes are partly effective in moving welfare recipients to work and reducing their welfare benefit dependency. Moreover, our findings imply that the incentives to search for regular jobs are not much lower for participants in the two schemes offering regular wages than for the alternative One-Euro-Jobs. Next, we find the most beneficial impacts for participants in work opportunities as contributory jobs which is the only scheme that can subsidize commercial jobs." (author's abstract, IAB-Doku) ((en))
    Keywords: Arbeitslosengeld II-Empfänger, arbeitsmarktpolitische Maßnahme, Arbeitsbeschaffungsmaßnahme, Arbeitsgelegenheit, berufliche Reintegration, Arbeitsmarktchancen, Einkommen, Wirkungsforschung, Transferleistung
    JEL: C13 I38 J68
    Date: 2010–11–10
  14. By: Zack Cooper; Steve Gibbons; Simon Jones; Alistair McGuire
    Abstract: This paper examines whether or not hospital competition in a market with fixedreimbursement prices can prompt improvements in clinical quality. In January 2006, theBritish Government introduced a major extension of their market-based reforms to theEnglish National Health Service. From January 2006 onwards, every patient in England couldchoose their hospital for secondary care and hospitals had to compete with each other toattract patients to secure their revenue. One of the central aims of this policy was to createfinancial incentives for providers to improve their clinical performance. This paper assesseswhether this aim has been achieved and competition led to improvements in quality. For ourestimation, we exploit the fact that choice-based reforms will create sharper financialincentives for hospitals in markets where choice is geographically feasible and that prior to2006, in the absence of patient choice, hospitals had no direct financial incentive to improveperformance in order to attract more patients. We use a modified difference-in-differenceestimator to analyze whether quality improved more quickly in more competitive marketsafter the government introduced its new wave of market-based reforms. Using AMI mortalityas a quality indicator, we find that mortality fell more quickly (i.e. quality improved) forpatients living in more competitive markets after the introduction of hospital competition inJanuary 2006. Our results suggest that hospital competition in markets with fixed prices canlead to improvements in clinical quality.
    Keywords: Health Care, Quality, Competition, Choice, Incentives, Reimbursement
    JEL: I1 L1 R0
    Date: 2010–01
  15. By: Hancock R (School of Medicine, Health Policy and Practice, University of East Anglia); Pudney S (Institute for Social and Economic Research)
    Abstract: The UK Attendance Allowance (AA) and Disability Living Allowance (DLA) are non means-tested benefits paid to many disabled people aged 65+. They may also increase entitlements to means-tested benefits through the Severe Disability Premium (SDP). We investigate proposed reforms involving withdrawal of AA/DLA. Despite their present non-means-tested nature, we show that withdrawal would affect mainly low-income people, whose losses could be mitigated if SDP were retained at its current or a higher level. We also show the importance of the method of describing distributional impacts and that use of inappropriate income definitions in official reports has overstated recipientsÂ’ capacity to absorb the loss of these benefits.
    Date: 2010–11–08

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