nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2011‒01‒16
nine papers chosen by
Giuseppe Marotta
University of Modena and Reggio Emilia

  1. The Wage Effects of Immigration and Emigration By Frédéric Docquier; Çaǧlar Özden; Giovanni Peri
  2. European Integration and Labour Migration By d'Artis Kancs; Julia Kielyte
  4. Employment and wages of immigrants in Portugal By Sónia Cabral; Cláudia Duarte
  5. Euro area labour markets: different reaction to shocks? By Jan Brůha; Beatrice Pierluigi; Roberta Serafini
  6. Eco-innovation and economic performance in industrial clusters: evidence from Italy By Sara Tessitore; Tiberio Daddi; Fabio Iraldo
  7. Economic Integration and Productive Specialization in the EU27: does FDI influence Countries' Specialization? By Natalia VECHIU; Farid MAKHLOUF
  8. Environmental concern and the choice of transport infrastructure projects in Sweden By Jussila Hammes, Johanna
  9. The Expenditure Impacts of London-based Individual Higher Education Institutions (HEIs) and their Students on the Economy of England: Homogeneity or Heterogeneity? By Kristinn Hermannsson; Katerina Lisenkova; Peter McGregor; Kim Swales

  1. By: Frédéric Docquier; Çaǧlar Özden; Giovanni Peri
    Abstract: In this paper, we simulate the long-run effects of migrant flows on wages of high-skilled and low-skilled non-migrants in a set of countries using an aggregate model of national economies. New in this literature we calculate the wage effect of emigration as well as immigration. We focus on Europe and compare the outcomes for large Western European countries with those of other key destination countries both in the OECD and outside the OECD. Our analysis builds on an improved database of bilateral stocks and net migration flows of immigrants and emigrants by education level for the years 1990 through 2000. We find that all European countries experienced a decrease in their average wages and a worsening of their wage inequality because of emigration. Whereas, contrary to the popular belief, immigration had nearly equal but opposite effects: positive on average wages and reducing wage inequality of non-movers. These patterns hold true using a range of parameters for our simulations, accounting for the estimates of undocumented immigrants, and correcting for the quality of schooling and/or labor-market downgrading of skills. In terms of wage outcomes, it follows that prevalent public fears in European countries are misplaced; immigration has had a positive average wage effect on native workers. Some concerns should be focused on the wage effect of emigration, instead.
    JEL: F22 J31 J61
    Date: 2010–12
  2. By: d'Artis Kancs; Julia Kielyte
    Abstract: The present paper studies how European integration might affect the migration of workers in the enlarged EU. Unlike the reduced-form migration models, we base our empirical analysis on the theory of economic geography à la Krugman (1991), which provides an alternative modelling of migration pull and push factors. Parameters of the theoretical model are estimated econometrically using historical migration data. Our empirical findings suggest that European integration would trigger selective migration between the countries in the enlarged EU. In the Baltics, Lithuania would gain about 7.25% of the total work force. In the Visegrád Four, the share of the mobile labour force would increase the most in Hungary, 8.35%, compared to the pre-integration state. Our predictions for the East-West migration are moderate and lower than those of reduced-form models: between 5.44% (from the Baltics) and 3.61% (from the Visegrád Four) would emigrate to the EU North. Because migrants not only follow market potential, but also shape the region’s market potential, the long-run agglomeration forces are sufficiently weak to make a swift emergence of a core-periphery pattern in the enlarged EU very unlikely.
    Keywords: New economic geography; Market potential; Labour migration; Economic integration.
    JEL: F12 L11 R12 R23
    Date: 2010–07–27
  3. By: Constanta BODEA (Academy of Economic Studies, Bucharest, Romania); Isa TAK (Academy of Economic Studies, Bucharest, Romania)
    Abstract: An average annual rate of growth of 6.92% during 2002-2008 has ensured the gradual decrease in the gap between Romania and other EU member states. Key economic indicators are shown in Table 1. The main growth factor for this period has been the domestic demand. Having grown at a steady pace for several years, EU-27 value added generally peaked in the first quarter of 2008. Output fell by 16.6 % for industry to reach a low in the second quarter of 2009 (with modest signs of a recovery thereafter in the second half of 2009, (Eurostat, 2010). The European economy is in the midst of the deepest recession since the 1930s, with real GDP projected to shrink by some 4% in 2009, the sharpest contraction in the history of the European Union. Although signs of improvement have appeared recently, recovery remains uncertain and fragile (European Communities, 2009)."
    JEL: L20
    Date: 2010–08
  4. By: Sónia Cabral; Cláudia Duarte
    Abstract: Using matched employer-employee data, we examine the main characteristics of immigrants in the Portuguese labour market in the 2002-2008 period. We find substantial differences in labour market outcomes between native and immigrant workers and among different nationality groups, in terms of age, gender, tenure, worker flows, geographical and sectoral concentration, and education levels. As in other countries, the wages of immigrants in Portugal are lower than the wages of natives, though growing at a higher pace in the period analysed. Moreover, downward wage rigidity appears to be slightly higher for immigrants than for natives.
    JEL: F22 J31 J61
    Date: 2010
  5. By: Jan Brůha (Czech National Bank, Na P?íkop? 28, 115 03 Praha 1, Czech Republic.); Beatrice Pierluigi (European Central Bank, Kaiserstrasse 29, D-60311 Frankfurt am Main, Germany.); Roberta Serafini (European Central Bank, Kaiserstrasse 29, D-60311 Frankfurt am Main, Germany.)
    Abstract: A small labour market model for the six largest euro area countries (Germany, France, Italy, Spain, the Netherlands, Belgium) is estimated in a state-space framework. The model entails, in the long run, four driving forces: a trend labour force component, a trend labour productivity component, a long-run inflation rate and a trend hours worked component. The short run dynamics is governed by a VAR model including six shocks. The state-space framework is convenient for the decomposition of endogenous variables in trends and cycles, for shock decomposition, for incorporating external judgement, and for running conditional projections. The forecast performance of the model is rather satisfactory. The model is used to carry out a policy experiment with the objective of investigating whether euro area countries differ in the labour market adjustment to a reduction in labour costs. Results suggest that, following the 2008-09 recession, moderate wage growth would significantly help delivering a more job-intense recovery. JEL Classification: C51, C53, E17, J21.
    Keywords: Labor market, Forecasting, Kalman filter.
    Date: 2011–01
  6. By: Sara Tessitore (Lab. MaIn – Scuola Superiore Sant’Anna, Pisa); Tiberio Daddi (Lab. MaIn – Scuola Superiore Sant’Anna, Pisa); Fabio Iraldo (– Institute for Environmental and Energy Policy and Economics, Bocconi University, Milan, Italy)
    Abstract: The article aims to investigate the presence of a correlation between eco-innovation and economic performance of an industrial district. The case analyzed in this article takes its cue from a study on a sample of 54 Italian industrial districts entitled "Eco-Districts" that, based on a series of criteria, has compiled a list of the most eco-efficient industrial districts. After selecting two districts in the field, but analyzed in this study for their different levels of eco-innovation, the article assesses the economic performance of the last three years through the analysis of trends in four indicators. However, the results show that only in some cases there is a connection between eco innovation and economic performance.
    Keywords: industrial clusters, industrial districts, eco-innovation, economic performance
    Date: 2010–02–23
  7. By: Natalia VECHIU; Farid MAKHLOUF
    Abstract: Economic Integration and Productive Specialization in the EU27: does FDI influence Countries' Specialization?
    Date: 2010–11
  8. By: Jussila Hammes, Johanna (Swedish National Road and Transport Research Institute, VTI)
    Abstract: One of the goals of transport policy in Sweden is to minimize the impact from transport on the environment. Using a database consisting of over 800 rail, road and maritime transport infrastructure projects, we estimate whether environmental factors, such as negative environmental effects arising from the project (noise and barrier effects), or emissions of five pollutants (NOx, VOC, CO2, SO2 and PM) affect the choice of which projects will be built. For a broader model including all three transport modes, we find that projects that cause negative environmental effects in fact have a greater probability of being included in the National or a Regional Transport Infrastructure Plan for 2010-2021. For a narrower model including only road investments, we find that if we include a measure for the Net Benefit/Investment Cost Ratio (NBIR), only the negative environmental effects matter and raise the probability of a project being included in a Plan. Excluding the NBIR measure reveals that what matters are the CO emissions and traffic safety measures. Thus, an increase in the emissions of CO lowers the project's probability of being included in a Plan, and traffic safety benefits increase the probability.
    Keywords: Transport infrastructure; Environment; Emissions
    JEL: D70 H54 Q58
    Date: 2010–12–21
  9. By: Kristinn Hermannsson (Department of Economics, Strathclyde University); Katerina Lisenkova (Department of Economics, Strathclyde University); Peter McGregor (Fraser of Allander Institute, Strathclyde University); Kim Swales (Department of Economics, Strathclyde University)
    Abstract: This paper replicates the analysis of Scottish HEIs in Hermannsson et al (2010a) to identify the impact of London-based HEIs on the English economy in order to provide a self-contained analysis that is readily accessible by those whose primary concern is with the regional impacts of London HEIs. When we treat each of the 38 London-based Higher Education Institutions (HEIs) that existed in England in 2006 as separate sectors in conventional input-output analysis, their expenditure impacts per unit of final demand appear rather homogenous (though less so than HEIs in Wales and Scotland), with the apparent heterogeneity of their overall impacts being primarily driven by scale. However, a disaggregation of their income by source reveals considerable variation in their dependence upon general public funding and their ability to draw in income/funding from external sources. Acknowledging the possible alternative uses of the public funding and deriving balanced expenditure multipliers reveals large differences in the net-expenditure impact of London HEIs upon the English economy, with the source of variation being the origin of income. Applying a novel treatment of student expenditure impacts, identifying the amount of exogenous spending per student, modifies the heterogeneity of the overall expenditure impacts. On balance this suggests that the impacts of impending budget cut-backs will be quite different by institution depending on their sensitivity to public funding. However, predicting the outcome of budget cutbacks at the margin is problematic for reasons that we identify.
    Keywords: London Higher Education Institutions, Input-Output, England, Impact study, Multipliers, budget constraint.
    JEL: R51 R15 H75 I23
    Date: 2010–12

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