nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2011‒03‒05
eighteen papers chosen by
Giuseppe Marotta
University of Modena and Reggio Emilia

  1. The Unequal Incidence of Non-Standard Employment across Occupational Groups: An Empirical Analysis of Post-Industrial Labour Markets in Germany and Europe By Marx, Paul
  2. Change Begets Change: Employment Effects of Technological and Non-Technological Innovations - a Comparison across Countries By Robert Stehrer; Johannes Pöschl; Sandra M. Leitner
  3. Exchange rate pass-through: New evidence from German micro data By Berner, Eike
  4. Family Labor Participation and Child Care Decisions: The Role of Grannies By Gema Zamarro
  5. Efficiency, Productivity and Environmental Policy: A Case Study of Power Generation in the EU By Jaraite, Jurate; Di Maria, Corrado
  6. Migration, Skills and Productivity By Michael Landesmann; Robert Stehrer; Robert Hierländer; Peter Huber; Anna Iara; Klaus Nowotny; Mary O'Mahony; Fei Peng; Catherine Robinson
  7. European integration and banking efficiency: a panel cost frontier approach By Cândida Ferreira
  8. The Effect of European Accession Prospects on Foreign Direct Investment Flows By Hakan Gungor; Ayla Ogus Binatli
  9. On the reliability of retrospective unemployment information in European household panel data By Tomi Kyyrä; Ralf A. Wilke
  10. Private Requirements by European Retailers: Impact on French Exporters By Latouche, Karine; Chevassus-Lozza, Emanuelle; Persillet, Vanessa; Harel, Monique
  11. Unobserved Heterogeneity and Risk in Wage Variance: Does Schooling Provide Earnings Insurance? By Mazza, Jacopo; van Ophem, Hans; Hartog, Joop
  12. A Techno-Economic Perspective of Green IT Implementation in Europe and the US By Alberto Onetti; Marco Talaia; Sam Gill; Lufutus Sayeed
  13. A study on the socio-economic determinants of suicide: Evidence from 13 European OECD countries By Okada, Keisuke; Samreth, Sovannroeun
  14. Relationship Quality and Innovation Capacity of Chains: The Case of the Traditional Food Sector in the EU By Gellynck, Xavier; Kühne, Bianka; Weaver, Rob D.
  15. How to Measure Innovative Modes of Governance in the EU Rural Policy: Key Dimensions, Indicators and Case Studies By Secco, Laura; Da Re, Riccardo; Gatto, Paola; Pettenella, Davide; Cesaro, Luca
  16. Houses and/or jobs: ownership and the labour market in Belgian districts By D. ISEBAERT; F. HEYLEN; C. SMOLDERS
  17. Does a Better Job Match Makes Women Happier?: Work Orientations, Work-Care Choices and Subjective Well-Being in Germany By Ruud Muffels; Bauke Kemperman
  18. Foreign Investments and Productivity Evidence from European Regions By Davide Castellani; Fabio Pieri

  1. By: Marx, Paul (IZA)
    Abstract: The paper addresses an often neglected question in labour market research: to which extent do outcomes aggregated on the national level disguise occupational diversity in employment conditions? In particular, how and why do occupational groups differ with regard to the incidence of non-standard employment? To explore these questions, the paper derives a detailed occupational scheme from the literature, capturing the variety of labour market outcomes within countries. In a second step, the scheme is theoretically linked to the topic of non-standard work. It is argued that different degrees of skill specificity across occupational groups produce diverging incentives for flexible and long-term employment, respectively. This leads to the expectation of (some) service-sector occupations showing stronger tendencies towards non-standard employment than those in the industrial sector. Based on European and German micro data, the categorisation is used to decompose various labour market indicators. The results clearly demonstrate the unequal incidence of non-standard employment along the lines of the suggested categorisation. Moreover, the longitudinal perspective suggests that traditionally functioning occupational groups will be crowded out by more destandardised ones.
    Keywords: temporary employment, low-pay, labour market dualisation, occupational groups, post-industrial labour markets, Germany
    JEL: J21 J24 J31
    Date: 2011–02
  2. By: Robert Stehrer (The Vienna Institute for International Economic Studies, wiiw); Johannes Pöschl (The Vienna Institute for International Economic Studies, wiiw); Sandra M. Leitner
    Abstract: This paper attempts to shed new light on the effect innovation has on employment. Specifically, it identifies the net employment effects of technological product and process innovations as well as complementary non-technological organizational innovations which have so far mostly been bypassed in comparable analyses. The analysis applies the 4th Community Innovation Survey and determines and compares innovation-induced employment effects in both manufacturing and service sectors across three country-groups: i) a set of Central and Eastern European transition countries, ii) a group of Southern EU member states as well as iii) a pool of Core EU member countries. The results reveal interesting differences across types of innovation, sectors or country-groups analysed. Particularly, in both manufacturing and service sectors of Central and Eastern European transition countries and Southern European countries, employment expands in response to the introduction of product novelties or process innovations only. Non-technological organizational innovations, on the other hand, had a detrimental effect on employment in the manufacturing sector of Central and Eastern European countries only. In contrast, employment in both manufacturing and service sectors of Core European countries only reacts to the introduction of new products but remains unaffected by the implementation of process or organizational innovations.
    Keywords: employment, technological and non-technological innovations, manufacturing and services, CIS 4
    JEL: J2 O33
    Date: 2011–01
  3. By: Berner, Eike
    Abstract: This paper examines exchange rate pass-through into German import unit values over the last 20 years. I find incomplete pass-through to be the predominant characteristic for German imports with an average rate of 42% over three months. This result holds when considering monthly 8-digit data, the most disaggregated German import data available. Furthermore, I distinguish 16 German trading partners and estimate substantial cross-country differences in the pass-through to import unit values. Imports coming from European countries generally exhibit statistically zero pass-through. By contrast, non-European trading partners are characterized by statistically significant incomplete pass-through rates. I also study whether there are differences in the pass-through rates for appreciations and depreciations, as well as for small and large exchange rate shocks. Moreover, I test for a negative correlation between the goods' quality and its pass-through rate. --
    Keywords: exchange rate,pass-through,import prices,Germany
    JEL: F42 F31 F14
    Date: 2011
  4. By: Gema Zamarro
    Abstract: One of the most significant long term trends in the labor market in most OECD countries has been the increase in the proportion of working mothers. However, not all countries show the same pattern. Countries in Southern Europe (Italy, Greece and Spain) show an average participation rate of about 45% whereas the participation rates in Northern countries (Denmark, Sweden) are around 75%. The characteristics of child care systems also differ significantly across OECD countries. This along with the characteristics of the labor market may have led families to get the necessary social services in an alternative way, i.e. through grandmothers. This paper analyzes how and to what extent child care is provided by grandmothers and how this task is combined with paid work in 10 European countries. Moreover, it studies whether the child care provided by grandmothers is encouraging the labor participation of their sons and, especially, their daughters. For this aim, it uses a sample drawn from the Survey of Health, Aging and Retirement in Europe (SHARE) which provides detailed information about grandmothers (the units of observation) as well as their offspring with children. The econometric model considered takes into account the simultaneity of labor market decisions and care-giving activities, while controlling for unobserved heterogeneity in care-giving decisions. Here it exploits the fact that, information about multiple offsprings with children is usually available for each grandmother. It finds a negative and very significant effect of participating in the labor market on the probability of taking care of the grandchildren on a regular basis. It also finds evidence that, for some countries, the child care provided by grandmothers has a positive effect on the labor participation of their daughters.
    Keywords: Binary choice, Female labor participation, Child care decisions, Simultaneous estimation, Panel data
    JEL: J13 J21 C30
    Date: 2011–01
  5. By: Jaraite, Jurate (CERE, Centre for Environmental and Resource Economics); Di Maria, Corrado (Economics and Finance Research Group)
    Abstract: This study uses the EU public power generating sector as a case study to investigate the environmental efficiency and productivity enhancing performance of the EU ETS in its pilot phase. Using Data Envelopment Analysis methods, we measures the environmental efficiency and the productivity growth registered in public power generation across the EU over the 1996-2007 period. In the second stage of our analysis we attempt to explain changes in productivity and efficiency over time using state-of-the-art econometric techniques. Our analysis suggests two conclusions: on the one hand carbon pricing led to an increase in environmental efficiency and to a shift outwards of the technological frontier; on the other hand, the overly generous allocation of emission permits had a negative impact on both measures. These results are shown to be quite robust to changes in controls and specifications.
    Keywords: Emissions Trading; EU ETS; Environmental Efficiency; Productivity GrowthM; Data Envelopment Analysis
    JEL: O38 Q48 Q58
    Date: 2011–02–22
  6. By: Michael Landesmann (The Vienna Institute for International Economic Studies, wiiw); Robert Stehrer (The Vienna Institute for International Economic Studies, wiiw); Robert Hierländer; Peter Huber; Anna Iara; Klaus Nowotny; Mary O'Mahony; Fei Peng; Catherine Robinson
    Abstract: The literature on international migration has repeatedly emphasized that the extent and structure of migration has an important impact on the competitiveness of regions and countries. This report provides an overview of the extent and the potential effects of high-skill migration to the EU27. It shows how many high-skilled migrants live in the EU, where these migrants come from, and how the European Union is positioned in the international competition for talent. Second, we examine how high-skilled migrants fare in European labour markets. Finally we address the issue of the effects of high-skill migration on multifactor productivity, gross value added and GDP per capita growth as well as patenting activities at the sectoral and regional levels. We find that - despite substantial heterogeneity among individual EU countries - high-skilled foreign-born are an important source for high-skilled labour in the EU27. There was some evidence that - on average - EU OECD economies (EU) had a lower share of highly qualified migrants than the (arithmetic) average of the (high migration) non-EU OECD economies. However, our results also suggest that this increasing selectivity of immigration regimes is countered by a relatively low qualification structure of short-term migrants in the EU. A second important policy relevant finding of this study is that high-skilled migrants in the EU face a number of challenges when entering the European labour market, that make them distinct from other migrant groups such as less skilled migrants. In particular the high-skilled migrants - in contrast to less skilled migrants - have lower labour market participation rates, higher unemployment rates and lower employment rates than comparable natives and face substantially higher risks of being employed in jobs that do not fit their skill structure. Our analysis regarding the impact of migration and of high-skilled migration in particular on sectoral productivity and gross value added (levels and growth) yielded a number of interesting results though still being preliminary. Particularly interesting was the difference of the impact of the share of migrants in levels and growth specifications, as well as the importance of a break-down by different groups of migrants (from EU and RoW). There was also a relatively robust result of a positive impact of the share of high-skill migrants and of an interactive effect of high-skill migrant share and ICT technology. As regards the analysis of migrants and regional growth and regional technological development (proxied by patents per capita) we found a positive relationship between the share of high-skilled employed persons and of high-skilled migrants and the growth rate of regional GDP per capita.
    Keywords: migration patterns, high-skill migration, job mismatch, productivity effects
    JEL: J61 I21 J11
    Date: 2010–11
  7. By: Cândida Ferreira
    Abstract: The aim of this paper is to contribute to the relatively scarce published research on the relationship between European integration and banking efficiency. Estimating cost translog frontier functions for different panels of European Union countries for the time period 1994- 2008 we conclude that there is always technical inefficiency. Additionally, although country inefficiencies have decreased in recent years (2000-2008), there are no remarkable changes in the countries’ ranking positions. Our results also point to the existence of a quite slow convergence process across EU countries during the period analysed, as well as its acceleration after the establishment of the European Monetary Union.
    Keywords: Bank efficiency; European integration; convergence; cost frontier approach.
    JEL: G15 G21 F36
    Date: 2011–02
  8. By: Hakan Gungor (Department of Economics, University of Verona); Ayla Ogus Binatli (Department of Economics, Izmir University of Economics)
    Abstract: The amount of FDI is increasing than any other international transactions during the last two decades. While countries remove barriers and implement policies to attract FDI inflows, the volume of foreign trade and investment increased .The objective of this paper is to enlighten the impact of EU accession of CEEC countries and Turkey on FDI flows into these countries. We perform Arrenalo-Bond - GMM model for the period of 1990-2009 for Poland, Hungary, Czech Republic, Estonia, Slovakia, Romania, Bulgaria, Turkey Croatia, Macedonia, and Ukraine. The empirical results suggest that as agglomeration effects and trade openness are significant determinants of MNCs’ activity during the period, traditional determinants, risk factors, labor cost, and market size are insignificant. In addition, the effect of EU accession prospects is found to be positive and significant.
    Keywords: European Union, FDI, Turkey, Accession, Candidacy
    JEL: F23
    Date: 2010–10
  9. By: Tomi Kyyrä; Ralf A. Wilke
    Abstract: The retrospectively recalled calendar of activities in the European Community Household Panel is a prime resource for cross country analysis of unemployment experience. We investigate the reliability of these data and find that 26% of unemployed respondents misreported retrospectively their unemployment status in the subsequent interview. We observe large differences across countries: While the conditional probability of a successful recall is 96% in the UK, it is just 51% in Greece for a comparable individual. These evident data problems likely affect the results of cross country comparisons.
    Keywords: Recall error, unemployment, ECHP
    JEL: J64 C81
    Date: 2011–01–31
  10. By: Latouche, Karine; Chevassus-Lozza, Emanuelle; Persillet, Vanessa; Harel, Monique
    Abstract: Based on recent development of international economics, this paper aims to evaluate in what extent private standards impact trade, and more precisely trade of French agriâfood firms. Our paper explores an original "handmade" database identifying French agriâfood firms which are certified with the International Food Standard â IFSâ and/or the British Retail Consortium standard â BRC. From this dataset, one can analyse the characteristics and the export behaviour of certified firms compared to that of the non certified ones. First we look at the productivity of the firms; second, we look at export behaviour of the firms: does a certification such as BRC imply export orientation of the firm? Then we propose the estimation of Chaneyâs model (2008) to test for the impact of certification on trade costs faced by certified firms to access EU markets. Our preliminary results show that certification clearly impacts French firms. In the case of BRC certification, we especially show that French certified firms significantly decrease their fixed costs to access EU markets.
    Keywords: Private standards, IFS/BRC, trade costs, productivity, Agribusiness, Agricultural and Food Policy, Farm Management, Food Consumption/Nutrition/Food Safety, Research Methods/ Statistical Methods,
    Date: 2010–10
  11. By: Mazza, Jacopo (University of Amsterdam); van Ophem, Hans (University of Amsterdam); Hartog, Joop (University of Amsterdam)
    Abstract: We apply a recently proposed method to disentangle unobserved heterogeneity from risk in returns to education. We replicate the original study on US men and extend to US women, UK men and German men. Most original results are not robust. A college education cannot universally be considered an insurance against unpredictability of wages. One conclusion is unequivocally confirmed: uncertainty strongly dominates unobserved heterogeneity.
    Keywords: wage inequality, wage uncertainty, unobserved heterogeneity, selectivity, education, replication
    JEL: C01 C33 C34 J31
    Date: 2011–02
  12. By: Alberto Onetti; Marco Talaia; Sam Gill; Lufutus Sayeed (Department of Economics, University of Insubria, Italy)
    Abstract: The present paper investigated the implementation of environmentally responsible IT measures in ten American and nine European organizations. The environmentally responsible IT measures include the implementation of existing hardware and software technologies as well as organizational and managerial actions that aim to reduce environmental impacts of IT use. As a result, adoption of Green IT measures requires adjustments that may modify the physical IT infrastructure and various organizational processes. These adjustments to organizational processes in addition to the infrastructure are ‘techno-economic’ in nature. The term techno-economic denotes concurrent consideration of technological, social, and economic issues surrounding an innovation. We interviewed at least two executives in each of the organizations in our study to assess the extent of Green IT implementation. Based on the analysis of these interviews, we conclude that the techno-economic adjustments were necessary for widespread implementation of environmentally responsible IT measures
    Keywords: Green IT, Data Center Management, Energy Efficiency, Environmental Responsibility, Organizational Development, Corporate Strategy.
    Date: 2011–02
  13. By: Okada, Keisuke; Samreth, Sovannroeun
    Abstract: This paper examines the factors affecting suicide in 13 European OECD countries from a socio-economic perspective. We use the autoregressive distributed lag approach to cointegration as the estimation methodology. Our results reveal that an increasing impact of divorce rates and a decreasing effect of per capita real GDP on suicide are confirmed in 9 countries. However, the evidence on the effects of fertility rates and per capita alcohol consumption are relatively less. For fertility rates, the results reveal that its increase leads to a decrease in suicide rates in four countries and a rise in suicide rates in one country. As for per capita alcohol consumption, the evidence supporting its significantly increasing effects on suicide rates is only confirmed in three countries. In addition, the tests of the cumulative sum and the cumulative sum of squares of the recursive residuals provide evidence indicating the stability of the estimated model.
    Keywords: Suicide; European OECD Countries; Socio-economic Factors
    JEL: I12 J17 C22
    Date: 2011–02
  14. By: Gellynck, Xavier; Kühne, Bianka; Weaver, Rob D.
    Abstract: The purpose of the paper is to explore how the perceived relationship quality is related to the innovation capacity in chains of the traditional food sector. Based on suggestions from theory and previous studies, empirical evidence is drawn from a survey of 90 traditional food chains including 270 companies from 3 European countries in 6 traditional food product categories. Heterogeneity across these chains is first examined based on cluster analysis that identifies three distinct clusters interpreted as reflecting three levels of intensity in innovation capacity: high, medium, and low. Next, we define measures of the chain relationship quality through characteristics such as trust, conflict and reputation. The quality of the chain relationship is then shown for each innovation capacity cluster and compared among the clusters. Results suggest that measures of the chain relationship quality may be important factors in providing both an institutional foundation and a member motivation for innovation. As chain relationship quality fosters sharing of resources necessary for innovation as well as sharing incentives, these results further strengthen the emerging conclusion from the literature that innovation can be catalyzed by policies encouraging firms to build strong relationships.
    Keywords: Innovation capacity, Chain relationship quality, Traditional food products, SMEs, Agribusiness, Agricultural and Food Policy, Farm Management, Food Consumption/Nutrition/Food Safety, Research Methods/ Statistical Methods,
    Date: 2010–10
  15. By: Secco, Laura; Da Re, Riccardo; Gatto, Paola; Pettenella, Davide; Cesaro, Luca
    Abstract: Good governance approaches in policy formulation and implementation - based on keyconcepts like participation, networking, transparency and accountability - are more and more adopted by the EU in addressing its rural policies reforms. Public Administrations at all levels should be evaluated with respect to their capacity to respect good governance principles. First, on the basis of a meta-analysis of ongoing initiatives (e.g. the World Bankâs Worldwide Governance Indicators), a methodological framework for assessing the quality of new governance modes is presented. Secondly, on the basis of case-studies in Italy, the monitoring and evaluation tools currently used by the European Commission to assess Administrationsâ performances in rural development programs and Leader approach are compared with the proposed framework. Gaps are identified and discussed. Findings demonstrate, among others, the weakness of the European evaluation system in the analysis of the cost/benefit ratio of (local) governance and non market (environmental, social, distributive) effects.
    Keywords: Governance, Indicators, Rural Development Programs, Local Action Groups, Agricultural and Food Policy, R58,
    Date: 2011–02–10
    Abstract: In a number of papers A.J. Oswald (1996, 1997) argues that high rates of home ownership may imply inferior labour market outcomes. This paper tests the Oswald hypothesis in a panel of 42 Belgian districts since the 1970s. The use of data going back to 1970 allows us to embed the Oswald hypothesis in a broader model including other key determinants of employment like labour costs and productivity, the skill level of the population, and demography. Considering that ownership may be endogenous to (shocks in) employment, we use IV estimation methods. Overall, we find evidence in favour of the Oswald hypothesis. We observe that a 1 percentage point rise in the rate of home ownership in a district implies a statistically significant fall in the employment rate by about 0.3 percentage points. Our results underscore the importance of including other determinants of employment, of controlling for unobserved fixed regional and time effects, and of appropriately dealing with endogeneity. Disregarding these issues, as is often done in the macro labour literature, may imply very different estimation results. Additional estimation reveals that the size of the Oswald effect falls in the fraction of high skilled in a district.
    Keywords: employment, home ownership, Oswald hypothesis, Belgian regions, panel data
    JEL: E24 J61 J64 R23
    Date: 2010–12
  17. By: Ruud Muffels; Bauke Kemperman
    Abstract: The study examines the effects of work orientations and work-leisure choices alongside the effect of genes or personality traits on subjective well-being (SWB). The former effects are assumed to be mediated by the match between women’s preferred and actual number of working hours indicating labor market and time constraints. Data come from 24 waves of the German (SOEP) Household Panel (1984-2007). Random and fixed-effect panel regression models are estimated. Work orientations and work-leisure choices indeed matter for women’s SWB but the effects are strongly mediated by the job match especially for younger birth cohorts and higher educated women. Therefore, apart from the impact of genes or personality traits preferences and choices as well as labor market and time constraints matter significantly for the well-being of women, providing partial support to the role (scarcity-expansion) theory and the combination pressure thesis while at the same time challenging set-point theory
    Keywords: Subjective well-being, set-point theory, life satisfaction, preference formation theory, role (scarcity-expansion) theory, job match, work-leisure choices, panel regression models
    JEL: I32 J21 J24 J64
    Date: 2011
  18. By: Davide Castellani; Fabio Pieri
    Abstract: Differences in productivity across regions have been mainly attributed to agglomeration economies, technology and human capital, while almost no evidence has been provided on the role of internationalization. In this paper we build unique measures of outward and inward foreign direct investment (FDI) counts at the NUTS 2 level and we assess the relationship between regional productivity and foreign investments in Europe. Regions with larger outflows of foreign investments show higher productivity growth, but this correlation fades down with the number of investments and eventually becomes negative in regions with very high outward orientation. Inward investments are also positively associated with regional productivity growth, but only above a certain threshold. Results are robust to the introduction of a number of regional characteristics, to the control for endogeneity of foreign investments, and for spatial dependence.
    Keywords: Regional productivity, foreign investments, Europe, spatial econometric models, instrumental variables.
    JEL: C23 F23 O47 O52 R11
    Date: 2011–01–01

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