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on Microeconomic European Issues |
| By: | Jusot, F;; Tubeuf, S;; Trannoy, T; |
| Abstract: | Among inequalities in health, those which are explained by circumstances during childhood or parents' characteristics are recognized as inequalities of opportunities in health and are considered as the most unfair. Tackling health inequalities in later life and improving the underlying socioeconomic determinants for older people is at the core of the European Union healthy-ageing strategy. We use the 2004 Survey on Health Ageing and Retirement in Europe and examine the influence of social and family background on the probability of reporting a good self-assessed health in adulthood using logistic models in ten European countries. The comparison of the odds ratios associated with family background without and with adjustment for individual educational level and occupation allows assessing the direct influence of family background and its influence through the determination of individual social status. Using the Gini index, we evaluate the magnitude of inequalities of opportunities in health, regardless of the mechanism of transmission and consider it in comparison with several indicators of economic and sanitary conditions. Inequalities of opportunity are more marked in Mediterranean and Germanic countries than in Nordic and Benelux countries. For instance, they are twice more important in Spain than in Sweden. Whereas they are mainly explained by social reproduction in most countries a direct effect of fathers' occupation on adult health remains in Belgium, Germany, Italy and Spain. There are country-specific protective social backgrounds: son of agricultural workers in Belgium, and son of technicians or fathers in armed forces in Spain. Parents' longevity has a significant protective effect on adult health. Differences in inequalities of opportunities in health between European countries emphasize the importance of policies reducing either social reproduction or intergenerational reproduction of health. |
| Keywords: | Europe; equality of opportunity; inequality in health; intergenerational transmission; older adults; Gini index |
| JEL: | D63 I12 |
| Date: | 2010–10 |
| URL: | http://d.repec.org/n?u=RePEc:yor:hectdg:10/26&r=eur |
| By: | Francesco Bogliacino (European Commission, JRC-IPTS); Marco Vivarelli (Università Cattolica) |
| Abstract: | In this study we use a unique database covering 25 manufacturing and service sectors for 16 European countries over the period 1996-2005, for a total of 2,295 observations, and apply GMM-SYS panel estimations of a demand-for-labour equation augmented with technology. We find that R&D expenditures have a job-creating effect, in accordance with the previous theoretical and empirical literature discussed in the paper. Interestingly enough, the labour-friendly nature of R&D emerges in both the flow and the stock specifications. These findings provide further justification for the European Lisbon-Barcelona targets. |
| Keywords: | Technological change, corporate R&D, employment, product innovation, GMMSYS |
| JEL: | O33 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ieb:wpaper:2010/12/doc2010-55&r=eur |
| By: | Bonsang Eric; Soest Arthur van (METEOR) |
| Abstract: | This paper analyses the determinants of an important component of well-being amongindividuals aged 50 years or older in eleven European countries: satisfaction with social contacts. We use data from the Survey of Health, Ageing and Retirement in Europe and anchoring vignettes to correct for potential differences in responses scales across countries and socio-demographic groups. On average, older Europeans report being satisfied with their social contacts, but there exist substantial differences across countries: respondents from Northern countries tend to be more satisfied than individuals from Central or Mediterranean countries. Our analysis shows that correcting for response scale differentials alters the country ranking for of satisfaction with social contacts, while it has much less effect on the estimates of what drives within country determinants. |
| Keywords: | Economics ; |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:umamet:2010060&r=eur |
| By: | Borghans, Lex (Maastricht University); Golsteyn, Bart (Maastricht University) |
| Abstract: | Evidence about job mobility outside the U.S. is scarce and difficult to compare cross-nationally because of non-uniform data. We document job mobility patterns of college graduates in their first three years in the labor market, using unique uniform data covering 11 European countries and Japan. Using the NLSY, we replicate the information in this survey to compare the results to the U.S. We find that (1) U.S. graduates hold more jobs than European graduates. (2) Contrasting conventional wisdom, job mobility in Japan is only somewhat lower than the European average. (3) There are large differences in job mobility within Europe. |
| Keywords: | Europe, graduates, job mobility, Japan, U.S. |
| JEL: | J24 J31 I2 |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5386&r=eur |
| By: | Dunnzlaff, Lina (IZA); Neumann, Dirk (University of Cologne); Niehues, Judith (University of Cologne); Peichl, Andreas (IZA) |
| Abstract: | The concept of equality of opportunity (EOp) goes back to Roemer (1993, 1998) who argues that a society shall guarantee its members equal access to advantage regardless of their circumstances, while holding them responsible for turning that access into actual advantage by the application of effort. Such arguments have been on the political agenda across the European Union, where the recent enlargements have brought together countries with rather different economic, social, and political backgrounds. This paper investigates how family background influences income acquisition in 15 European countries. It also scrutinizes how governments affect EOp through the design of their tax and transfer schemes. Our overall results suggest that the link between family background and economic success is usually tighter in relatively poor countries than in rich countries. Moreover, we find a clear country clustering for the Scandinavian, the Continental European, and the Anglo-Saxon countries. For Eastern Europe, our results are less definite. Looking at the impact of the tax and benefit schemes in the EU, it can be concluded that both taxes and transfers reduce inequality of opportunities, with social benefits typically playing the key role. Furthermore, the equalizing impacts of the tax benefit system on inequality of opportunity differ substantially from the ones observed when referring to the traditional notion of inequality of outcomes. |
| Keywords: | equality of opportunity, inequality, redistribution |
| JEL: | D31 H24 I38 |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5375&r=eur |
| By: | Yoo-Duk Kang (Korea Institute for International Economic Policy) |
| Abstract: | In this paper I examine the evolution of intra-industry trade (IIT) in intra-European trade in the period of accession of the Central and Eastern European countries (CEEC). In order to identify changes in IIT in intra-European trade, I calculate the Grubel and Lloyd index for the static dimension and Brülhart A index for the dynamic dimension. Based on Grubel and Lloyd index, I conduct gravity-type empirical tests to verify determinants of IIT at the intra-European level. I find that CEECs experienced considerable increase in IIT, particularly during transitional periods before their accession. However, the level of IIT between CEECs is still considerably low. Given that a trade-investment nexus exists to explain IIT in intra-European trade, IIT in CEECs can increase further, as they receive more FDI from their neighbors. |
| Keywords: | Intra-industry trade, foreign direct investment, EU enlargement, European integration |
| JEL: | F14 F15 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:eab:tradew:2453&r=eur |
| By: | Antonio Bassanetti (Bank of Italy); Roberto Torrini (Bank of Italy); Francesco Zollino (Bank of Italy) |
| Abstract: | We investigate whether the completion of the Single Market Programme has enhanced competition on the product markets across European countries, taking into account the companion structural reforms undertaken by the member countries, particularly in the labour market and the institutional setting of important industries (i.e. network industries). We test for a break in both mark-ups and the division of rent between capital and labour based on a statistical model incorporating efficient bargaining in the labour market. Using industry data for ten EU countries we find that, without controlling for changes in the rent sharing, mark-up estimates tend to increase in the 1990s. However, once we assume efficient bargaining in the labour market, mark-ups remain virtually unchanged or, in some sectors or groups of countries, even decrease; this reflects the declining shares of rents accruing to workers as a result of their diminished bargaining power. The evidence is particularly strong for high and medium-tech manufacturing, for construction and for those activities that went through deep institutional changes and privatization programmes. |
| Keywords: | institutional changes, mark-up, rent-sharing |
| JEL: | D40 J50 L50 |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:wptemi:td_781_10&r=eur |
| By: | Kahanec, Martin (Central European University and IZA); Zaiceva, Anzelika (IZA and University of Bologna); Zimmermann, Klaus F. (IZA, DIW Berlin and Bonn University) |
| Abstract: | This paper sheds light on the labor market situation of ethnic minorities in the European Union. Facing a serious measurement challenge and lacking adequate data, we apply several measures of ethnicity and examine various data sources as well as secondary evidence. We find significant gaps between ethnic minority and majority populations in terms of labor market outcomes. In particular, ethnic minorities appear to face disproportional difficulties in finding a job. Although experience in the host country improves the status of immigrant minorities, we do not find any clear assimilation of further immigrant generations. Roma people seem to face particularly grave integration barriers in European labor markets. |
| Keywords: | labor force participation, unemployment, migration, ethnic minority, ethnicity, labor market |
| JEL: | F22 J15 J61 J71 |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5397&r=eur |
| By: | Levy, Daniel; Smets, Frank |
| Abstract: | This introductory essay briefly summarizes the eleven empirical studies of price setting and price adjustment that are included in this special issue. The studies, which use data from several European countries, were conducted as part of the European Central Bank’s Inflation Persistence Network. |
| Keywords: | Price Rigidity; Price Flexibility; Cost of Price Adjustment; Menu Cost; Managerial and Customer Cost of Price Adjustment; Pricing; Price System; Price Setting; New Keynesian Economics; Store-Level Data; Micro-Level Data; Product-Level Data |
| JEL: | D21 L11 E12 E31 D40 L16 E58 E52 E50 M30 M20 |
| Date: | 2010–02–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:27617&r=eur |
| By: | Subal C. Kumbhakar (State University of New York at Binghamton); Raquel Ortega-Argilés (IN+ Centre for Innovation, Technology and Policy Research, Instituto Superior Técnico); Lesley Potters (Utrecht School of Economics); Marco Vivarelli (Università Cattolica, Milano-Piacenza); Peter Voigt (JRC-IPTS) |
| Abstract: | The main objective of this study is to investigate the impact of corporate R&D activities on firm performance, measured by labour productivity. To this end, the stochastic frontier technique is used on a unique unbalanced longitudinal dataset on top European R&D investors over the period 2000–2005. The study quantifies technical inefficiency of individual firms. From a policy perspective, the results of this study suggest that – if the aim is to leverage firms’ productivity – emphasis should be put on supporting corporate R&D in high-tech sectors and, to some ex-tent, in medium-tech sectors. On the other hand, corporate R&D in the low-tech sector is found to have a minor effect in explaining productivity. Instead, encouraging investment in fixed assets appears important for the productivity of low-tech industries. Hence, the allocation of support for corporate R&D seems to be as important as its overall increase and an ‘erga omnes’ approach across all sectors appears inappropriate. However, with regard to technical efficiency, R&D intensity is found to be a pivotal factor in explaining firm efficiency. This is true for all industries. |
| Keywords: | Corporate R&D, productivity, technical efficiency, stochastic frontier analysis |
| JEL: | L2 O3 |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:wpaper:201011&r=eur |
| By: | Crozet, M.; Méjean, I.; Zignago, S. |
| Abstract: | This article examines the performances of French exporting firms. Using a highly detailed database, we confirm that exporting firms are much bigger, more productive and more profitable than domestic ones. This difference is particularly strong for firms exporting to non-EU markets, and for small businesses. For large businesses, the discrepancy between exporters and domestic firms is fairly small, and non-significant in some industries and for firms that only export to EU destinations. Our results suggest that export-enhancing public policies should target small businesses and firms attempting to export to remote countries. |
| Keywords: | Exporting firms, Productivity, Competitiveness. |
| JEL: | F1 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:bfr:banfra:310&r=eur |
| By: | Waltraud Schelkle, Joan Costa-i-Font; Christa van Wijnbergen |
| Abstract: | The objective of this paper is to study the effects on solidarity, risk, and equity of the introduction of choice and competition into the provision of public services. Many European countries have embraced the choice agenda in welfare arrangements with a view of improving efficiency and/or quality. For example, citizens are freer to choose between health and education services than they were a decade ago. We first examine the motivations behind the consumer choice agenda, including the role of the European Union in enhancing choice within social and welfare institutions. Second, we analyze how the introduction of choice may introduce new trade-offs and affect the pooling of risks in European welfare states. Third, we outline the research methodology for our case studies on education, employment services and long-term care. The paper explores the possibility that rather than presenting a challenge to solidaristic welfare citizenship, the introduction of choice may in the longer term safeguard the public provision of services by providing the basis for a new political consensus. |
| Keywords: | political economy; risk-sharing mechanisms; social policy; social regulation; welfare state |
| Date: | 2010–12–15 |
| URL: | http://d.repec.org/n?u=RePEc:erp:reconx:p0084&r=eur |
| By: | Tomaso Duso; Klaus Gugler; Florian Szücs |
| Abstract: | Based on a database of 326 merger cases scrutinized by the European Commission between 1990 and 2007, we evaluate the economic impact of the change in Euro-pean merger legislation in 2004. We first propose a general framework to assess merger policy effectiveness, which is based on standard oligopoly theory and makes use of stock market reactions as an external assessment of the merger and the merger control decisions. We then focus on four different dimensions of effec-tiveness: 1) legal certainty; 2) frequency and determinants of type I and type II er-rors; 3) rent-reversion achieved by different merger policy tools; and 4) deterrence of anti-competitive mergers. To infer the economic impact of the merger policy reform, we compare the results of our four tests before and after its introduction. Our results suggest that the policy reform seems to have been only a modest im-provement of European merger policy. <br> <br> <i>ZUSAMMENFASSUNG - Eine empirische Bewertung der in 2004 eingeführten Reform der Europäischen Fusionskontrolle - Basierend auf einer Stichprobe von 326 Fusionsfällen, welche der Europäischen Kommission zwischen Januar 1990 und Dezember 2007 vorlagen, wird in diesem Beitrag die Wirkung der in Mai 2004 eingeführten neuen Regulierung für Firmenfusionen erforscht. Zuerst wird ein allgemeiner Ansatz vorgeschlagen, um die Effektivität der Fusionskontrolle zu evaluieren, welcher auf der Oligopoltheorie beruht und Fusionen und Fusionskontrollentscheidungen anhand der Reaktionen von Aktienmärkten bewertet. Vier unterschiedliche Aspekte der Effektivität der Fusionskontrolle werden dann untersucht: 1) die Rechtssicherheit, 2) die Häufigkeit und Determinanten von Entscheidungsfehlern erster und zweier Ordnung seitens der Kommission, 3) die effektive Reduzierung der wettbewerbswidrigen Wirkungen von Fusionen, erzielt von unterschiedlichen wettbewerbspolitischen Instrumenten und 4) die Abschreckung von wettbewerbsschädigenden Fusionen. Um die Wirking der neuen Regulierung abzuschätzen, werden die Resultate der vier Tests vor und nach der Einführung der Reform verglichen. Die Ergebnisse zeigen, dass die Reform nur zu einer mäßigen Verbesserung der Europäischen Fusionskontrolle geführt hat. <i> |
| Keywords: | merger control, regulatory reform, EU Commission, event-study |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:wzb:wzebiv:spii2010_16&r=eur |
| By: | Carlos Pinho (Departamento de Economia e Gestão Industrial, Universidade de Aveiro, GOVCOPP); Mara Madaleno (Departamento de Economia e Gestão Industrial, Universidade de Aveiro, GOVCOPP) |
| Abstract: | We investigate and empirically estimate optimal hedge ratios, for the first time, in the EU ETS carbon market. Minimum variance hedge ratios are conditionally estimated with multivariate GARCH models, and unconditionally by OLS and the naïve strategy for the European Climate Exchange (ECX) market in the period 2005-2009. Also, utility gains are considered in order to take into account risk-return considerations. Empirical results indicate that dynamic hedging provides superior gains (in reducing the variance portfolio) compared to those obtained from static hedging, when adjustment costs are not taken into account. Moreover, results improve when the leptokurtic characteristics of the data are into consideration through distributions. Results are always compared in and out of sample, suggesting also that utility gains increase with investor's increased preference over risk. |
| Keywords: | CO2 Emission Allowances; Dynamic Hedging; Futures Prices; Risk Management; Spot Prices |
| JEL: | C32 G19 G32 Q54 |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:ave:wpaper:552010&r=eur |
| By: | Corinne Autant-Bernard (Université de Lyon, Lyon, F-69003, France ; Université Jean Monnet ; CNRS, GATE Lyon St Etienne, Saint-Etienne, F-42000, France); Jean-Pascal Guironnet (Université de Caen, CREM CNRS 6211); Nadine Massard (Université de Lyon, Lyon, F-69003, France ; Université Jean Monnet ; CNRS, GATE Lyon St Etienne, Saint-Etienne, F-42000, France) |
| Abstract: | Using a sample of 46 000 EU firms from the Community Innovation Survey, this paper analyses the drivers of innovation adoption. In contrast to most empirical studies on innovation diffusion in which a specific technology is analyzed, this study covers several countries and industries in the European Union. Following Van de Ven and Van Praag (1981), Heckman’s method is applied in a context of binary endogenous variable to explain the choices made by firms regarding innovation. Distinctions are made between the internal generation of innovation and the adoption of innovation produced by others, as well as between different types of adoption (product vs. process and cooperation-based adoption vs. isolated adoption). The study is focused on the impact of users’ features and their cooperation with suppliers on the adoption choices. The results point out that cooperation is a key driver of adoption choices. Usual determinants such as firm size, absorptive capability or exports would foster generation of innovation instead of adoption. |
| Keywords: | Innovation adoption, Innovation diffusion, Community Innovation Survey, Process adoption, Product adoption |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:gat:wpaper:1034&r=eur |
| By: | Adriana Di Liberto; Stefano Usai |
| Abstract: | This paper proposes a fixed-effect panel methodology that enables us to simultaneously take into account both TFP and traditional neoclassical convergence. We analyse a sample of 199 regions in EU15 (plus Norway and Switzerland) between 1985 and 2006 and find the absence of an overall process of TFP convergence as we observe that TFP dispersion is virtually constant across the two sub-periods. This result is proved robust to the use of different estimation procedures such as simple LSDV , spatially corrected LSDV , Kiviet-corrected LSDV, and GMM à la Arellano and Bond. However, we also show that this absence of a strong process of global TFP convergence hides interesting dynamic patterns across regions. These patterns are revealed by the use of recent exploratory spatial data techniques that enable us to obtain a complete picture of the complex EU cross-regions dynamics. We find that, between 1985 and 2006, there has been numerous regional miracles and disasters in terms of TFP performance and that polarization patterns have significantly changed along time. Overall, results seem to suggest that a few TFP leaders are emerging and are distancing themselves from the rest, while the cluster of low TFP regions is increasing. |
| Keywords: | TFP; technology catching up; panel data; exploratory spatial data analysis |
| JEL: | C23 O33 O47 R11 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:cns:cnscwp:201030&r=eur |
| By: | Kahanec, Martin (Central European University and IZA); Zimmermann, Klaus F. (IZA, DIW Berlin and Bonn University) |
| Abstract: | The social and labor market integration of ethnic minorities in the EU is still a major political, societal and economic challenge. Based on evidence presented in Kahanec and Zimmermann (2011), this policy paper proposes an agenda for diversity and minority integration in the European labor markets. Policies to foster the labor market and social integration of ethnic majorities can work. But they need to involve all stakeholders, including all levels of government, public and private sectors, as well as civil society organizations, combine general and targeted action in a balanced, complementary and reinforcing way, respond to the needs of the affected groups and provide open access to people from diverse ethnic backgrounds, and be persistent and allow for time to become effective. Identification and transfer of good practices is essential. |
| Keywords: | immigrants, ethnic minority, integration, diversity, labor market, diversity management, integration policy |
| JEL: | J15 J71 J78 |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izapps:pp21&r=eur |
| By: | Carola Grün (University of Göttingen); Helmut Mahringer (Austrian Institute of Economic Research); Thomas Rhein (Institute for Employment Research) |
| Abstract: | Does the low wage sector serve as a stepping stone towards integration into better-paid jobs or at least towards integration of jobless people into employment? There is evidence for a "low-wage trap" and for a high risk of low-wage earners to get unemployed, but this may also be due to sorting effects and not to low-wage work itself. The present paper contributes to this debate analysing employment spells of male low-wage earners who had been unemployed before, with methods of continuous-time event history analysis. The present data have been retrieved from two large administrative micro-data sources: the IAB employment sample (IABS) for Germany, and a combination of social security data from the Austrian Social Insurance Institutions. Two possible exits of low-wage spells are focused on: exits to higher-paid employment (upward mobility vs. persistence), and exits to unemployment ("no pay-low pay cycle"). The results show shorter spell durations in Austria, pointing to a considerably higher fluctuation and labour turnover in the Austrian labour market. The influence of individual and firm-related characteristics and of the individual unemployment history on exit probabilities and the role of duration dependence in both countries is investigated. With regard to upward mobility, no convincing evidence for "true" duration dependence is found, at least for Germany. As to the risk of falling back into unemployment, the results suggest that even low-wage workers can accumulate job-related human capital favouring employment integration over time. |
| Keywords: | unemployment dynamics, low wage, duration analysis |
| Date: | 2010–12–22 |
| URL: | http://d.repec.org/n?u=RePEc:wfo:wpaper:y:2010:i:383&r=eur |
| By: | M. Conti; Giovanni Sulis |
| Abstract: | Using data for 51 manufacturing and service sector for the period 1970-2005 in 14 countries, this paper show that employment protection legislation has a negative and significant effect on growth of value added and hours of work in more human capital intensive sectors. We argue that labour market regulation has a negative impact on the technology adoption mechanism through its heterogeneous impact on firms workforce adjustment requirements. In fact, technology adoption depends both on the skill level of the workforce and the capacity of firms to optimally adjust their employment levels as technology changes. As a consequence, firing costs have a relatively stronger impact in sectors in which technology adoption is more important. Our empirical results are robust to various sensitivity checks such as interactions of human capital intensity with other country level variables, of employment protection with other sector level variables and endogeneity of firing restrictions. We also show that the negative effect of EPL is stronger the smaller the distance from the technology frontier and after the 1990s. |
| Keywords: | Growth; Human Capital; Technology Adoption; Employment Protection Legislation; Sectors |
| JEL: | J24 J65 O47 O52 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:cns:cnscwp:201028&r=eur |
| By: | Bonnet, Céline; Réquillart, Vincent |
| Abstract: | National Health authorities recommend a decrease in the consumption of addedsugar. At the same moment, a reform of the Common Organisation of the Sugar Market will lead to a decrease by more than 30% of the sugar price in the EU. Using French data on the soft drinks purchases, this paper investigates the impact of this reform on the consumption of sugar sweetened beverages and on added sugar consumption. The soft drink market is composed of highly differentiated products with different sugar content. Hence the reform of the EU sugar policy leads to a decrease in regular soft drink prices by more than 3% in average and varies from 1.7% to 6.5% according to the brand. To assess substitution within the food category of sugar sweetened beverages, we use a structural econometric model, the random-coefficients logit model. Our model also takes into account observed and unobserved heterogeneity in the consumersbehavior and then allows to estimate the impact of the sugar price decrease on the soft drink consumption according to the type of consumers. Results suggest that price changes would lead to an increase in market shares of regular products by 7.5% and a decrease in market share of diet products by 3.5%. On the whole, it would rise the consumption of regular soft drinks by more that 1 liter per year and per person and the consumption of added sugar by 124 grams per year and per person. Moreover, the reform leads to substitution between brands at the bene t of products with the highest sugar content. The increase in per person consumption is larger in households composed of overweight and obese individuals. |
| JEL: | D12 I18 Q18 |
| Date: | 2010–10 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:23467&r=eur |