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on Microeconomic European Issues |
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Issue of 2011‒04‒16
fifteen papers chosen by Giuseppe Marotta University of Modena and Reggio Emilia |
| By: | Raquel Ortega-Argilés (Faculty of Economics, University of Barcelona); Mariacristina Piva (-); Marco Vivarelli (-) |
| Abstract: | The literature has pointed to different causes to explain the productivity gap between Europe and United States in the last decades. This paper tests the hypothesis that the lower European productivity performance in comparison with the US can be explained not only by a lower level of corporate R&D investment, but also by a lower capacity to translate R&D investment into productivity gains. The proposed microeconometric estimates are based on a unique longitudinal database covering the period 1990-2008 and comprising 1,809 US and European companies for a total of 16,079 observations. Consistent with previous literature, we find robust evidence of a significant impact of R&D on productivity; however – using different estimation techniques - the R&D coefficients for the US firms always turn out to be significantly higher. To see to what extent these transatlantic differences may be related to the different sectoral structures in the US and the EU, we differentiated the analysis by sectors. The result is that both in manufacturing, services and high-tech sectors US firms are more efficient in translating their R&D investments into productivity increases. |
| Keywords: | R&D, productivity, embodied technological change, US, EU. JEL classification:O33 |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:ira:wpaper:201103&r=eur |
| By: | Paola Bertolini; Francesco Pagliacci |
| Abstract: | In 2010, the Lisbon Strategy came to its end. Even if many targets have not been fully reached by each of the 27 EU Members, a new and more ambitious reform strategy has been launched: the Europe 2020 Strategy. In order to evaluate the results of the Lisbon Strategy and of Europe 2020 Strategy, many indicators are yearly collected and published by EUROSTAT. From the analysis of these indicators, the work analyses how different European countries perform in economic, social and environmental issues. The paper moves from the works of Sapir [2006], who has already underlined –among the EU-15 – the existence of four different European social models (Nordic, Anglo-Saxon, Continental, Mediterranean), sharing different combinations of economic efficiency and social equity. This work tries to go further. First, it also underlines the role of the environmental issues in defining a sustainable European social model. Then, the analysis includes also Eastern countries, trying to identify the existence of possible Eastern social models. Therefore, in order to identify different European social models, we use a multivariate statistics methodology, i.e. the Principal Component Analysis (PCA), applied to a set of 20 variables (all the variables included in the short list of indicators from EU plus other environmental indicators) collected for all the European countries. The obtained results are among the expected ones. Sapir’s results are largely confirmed. In particular the supremacy of the Nordic model is straightforward. On the opposite side, when including environmental indicators, the Anglo-Saxon model seems to perform worse than Mediterranean one. Finally, referring to Eastern countries, a single social model does not emerge. |
| Keywords: | European policies; Lisbon Strategy; social models; sustainability; |
| JEL: | R11 R58 |
| Date: | 2010–03 |
| URL: | http://d.repec.org/n?u=RePEc:mod:depeco:0648&r=eur |
| By: | Ziebarth, Nicolas R. (DIW Berlin) |
| Abstract: | Using SOEP panel data and difference-in-differences methods, this study is the first to empirically evaluate the effectiveness of four different health care cost containment measures within an integrated framework. The four measures investigated were introduced in Germany in 1997 to reduce moral hazard and public health expenditures in the market for convalescent care. Doubling the daily copayments was clearly the most effective cost containment measure, resulting in a reduction in demand of about 20 percent. Indirect measures such as allowing employers to cut statutory sick pay or paid vacation during health spa stays did not significantly reduce demand. |
| Keywords: | copayment, cost containment measures, health expenditures, convalescent care, SOEP |
| JEL: | H51 I11 I18 J22 |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5602&r=eur |
| By: | Pellizzari, Michele (Bocconi University) |
| Abstract: | A large part of the Italian welfare system is designed and implemented at the very local level, leading to a high degree of heterogeneity in the type and the generosity of available programs across the country. As a consequence, studies of welfare use based on standard household surveys may fail to consider a large part of welfare recipients and provisions. In this paper I overcome such a problem by combining the analysis of welfare use in the Italian sample of the European Survey of Incomes and Living Conditions (EU-SILC) with the investigation of a new administrative archive that contains information on means tests certificates needed for applying to all kind of locally administered welfare programs. Results show that, without controlling for observable characteristics, migrants from outside the EU are more likely to receive or apply for welfare. Once individual and household characteristics are controlled for, such a residual welfare dependency is greatly reduced but does not disappear. Geographical location is a key factor, given that migrants tend to locate in the richest areas of the country, which also happen to be the ones where the local welfare is most generous. |
| Keywords: | migration, welfare |
| JEL: | J61 |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5613&r=eur |
| By: | Pfarr, Christian; Schmid, Andreas; Schneider, Udo |
| Abstract: | Self-assessed health (SAH) is a frequently used measure of individuals’ health status. It is also prone to reporting heterogeneity. To control for reporting heterogeneity valid measures of the objective health status are needed. The topic becomes even more complex for cross-country comparisons, as many key variables tend to vary strongly across countries, influenced by cultural and institutional differences. This study aims at exploring the key drivers for reporting heterogeneity in SAH in an international context. To this end, country specific effects are accounted for and the objective health measure is concretized, separating out effects of mental and physical health conditions. We use panel data from the Survey of Health, Ageing and Retirement in Europe (SHARE) which provides a rich dataset on the elderly European population. To obtain distinct indicators for physical and mental health conditions two indices were constructed. Finally, to identify potential reporting heterogeneity in SAH a generalized ordered probit model is estimated. We find evidence that health behaviour as well as health care utilization, mental and physical health condition as well as country characteristics affect reporting behaviour. We conclude that observed and unobserved heterogeneity play an important role when analysing SAH and have to be taken into account. |
| Keywords: | reporting heterogeneity; SHARE; generalized ordered probit |
| JEL: | I12 C23 I10 |
| Date: | 2011–03–28 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:29900&r=eur |
| By: | Martina Mysíková (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic) |
| Abstract: | This paper analyzes the inequality of personal earnings in the Czech Republic since the early transition from communism, using relative distribution method. It applies data from two surveys, Microcensus and Living Conditions, covering the period from 1988 to 2008. The trend suggested by many recent empirics, “hollowing of the middle”, was confirmed in the early stages of transition, but later subsided. Earnings polarization was apparent for all sex and education subgroups between the years 1988 and 1996. For international comparison the European dataset EU-SILC 2008 has been used, focusing on four countries: Austria, Germany, Hungary, and Poland. Earnings distributions by gender and education have been analyzed, establishing that male earnings distribution is more homogenous than female, and earnings of highly educated people are more concentrated in the middle than earnings of less educated people. |
| Keywords: | earnings distribution, inequality, transition |
| JEL: | D31 J39 O15 |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:fau:wpaper:wp2011_11&r=eur |
| By: | Lefèbvre, Mathieu (CREPP, Université de Liège); Pestieau, Pierre (CREPP, Université de Liège); Riedl, Arno (Maastricht University); Villeval, Marie Claire (CNRS, GATE) |
| Abstract: | In a series of experiments conducted in Belgium (Wallonia and Flanders), France and the Netherlands, we compare behavior regarding tax evasion and welfare dodging, with and without information about others' behavior. Subjects have to decide between a 'registered' income, the realization of which will be known to the tax authority for sure, and an 'unregistered' income that will only be known with some probability. This unregistered income comes from self-employment in the Tax treatment and from black labor supplementing some unemployment compensation in the Welfare treatment. Subjects have then to decide on whether reporting their income or not, knowing the risk of detection. The results show that (i) individuals evade more in the Welfare treatment than in the Tax treatment; (ii) many subjects choose an option that allows for tax evasion or welfare fraud but report their income honestly anyway; (iii) examples of low compliance tend to increase tax evasion while examples of high compliance exert no influence; (iv) tax evasion is more frequent in France and the Netherlands; Walloons evade taxes less than the Flemish. There is no cross-country difference in welfare dodging. |
| Keywords: | tax evasion, social fraud, social comparisons, cross-country comparisons, experiments |
| JEL: | H26 H31 I38 C91 |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5609&r=eur |
| By: | Rob Alessie (University of Groningen); Maarten van Rooij (Netherlands Central Bank); Annamaria Lusardi (Dartmouth College) |
| Abstract: | We present new evidence on financial literacy and retirement preparation in the Netherlands based on two surveys conducted before and after the onset of the financial crisis. We document that while financial knowledge did not increase from 2005 to 2010, significantly more individuals planned for their retirement in 2010. At the same time, employees’ expectations about the level of their pension income are high compared to what retirement plans may realistically provide. However, financially knowledgeable employees report lower expected replacement rates and acknowledge higher levels of uncertainty. Moreover using instrumental variation for financial conditions and financial knowledge of relatives, we find a positive effect of financial literacy on retirement preparation. Employing the panel feature of our dataset, we show that financial knowledge has a causal impact on retirement planning. Our findings suggest that the formation of pension expectations might be an important mechanism contributing to the impact of financial literacy on planning. |
| Keywords: | Financial Sophistication, Retirement Planning, Retirement Expectations |
| JEL: | D91 G11 D80 |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:crp:wpaper:110&r=eur |
| By: | Johan Almenberg (Ministry of Finance, Sweden); Jenny Säve-Söderbergh (The Swedish Social Institute for Social Research) |
| Abstract: | We examine the relationship between financial literacy and retirement planning in a representative sample of Swedish adults. We find significant differences in financial literacy between planners and non-planners. Financial literacy levels are also lower among older people, women and those with low education or earnings. When we control for demographic variables we do not find an association between a narrow measure of financial literacy and planning, but with a broader measure the association is positive and statistically significant. We relate these findings to features of the Swedish pension system. |
| Keywords: | Financial literacy,pensions planning |
| JEL: | D10 H55 H75 I22 |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:crp:wpaper:112&r=eur |
| By: | Bianchi, Milo; Buonanno, Paolo; Pinotti, Paolo |
| Abstract: | We examine the empirical relationship between immigration and crime across Italian provinces during the period 1990-2003. Drawing on police administrative records, we first document that the size of the immigrant population is positively correlated with the incidence of property crimes and with the overall crime rate. Then, we use instrumental variables based on immigration toward destination countries other than Italy to identify the causal impact of exogenous changes in Italy's immigrant population. According to these estimates, immigration increases only the incidence of robberies, while leaving un- affected all other types of crime. Since robberies represent a very minor fraction of all criminal offenses, the effect on the overall crime rate is not significantly different from zero. |
| Keywords: | Immigration; Crime |
| JEL: | F22 J15 K42 R10 |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:cpm:docweb:1023&r=eur |
| By: | Sterlacchini, Alessandro; Venturini, Francesco |
| Abstract: | Using data for twelve manufacturing industries over the period 1980-2006, we perform for Italy and Spain a dynamic panel estimation of the long-run elasticity of TFP with respect to R&D capital. The results show that in Spain high-tech industries have experienced a similar or slightly higher R&D elasticity than their Italian counterparts. This is mainly attributable to what occurred from the mid 1990s onwards when, thanks to increasing R&D efforts, the Spanish industries have been able to catch up with the respect to the Italian ones. The policy implications of the above findings are discussed. |
| Keywords: | Manufacturing industries; Italy and Spain; Productivity growth; R&D capital |
| JEL: | O30 O40 L60 |
| Date: | 2011–04–04 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:30048&r=eur |
| By: | Tabea Bucher-Koenen (MEA, University of Mannheim); Annamaria Lusardi (Dartmouth College) |
| Abstract: | We examine financial literacy in Germany using data from the SAVE survey. We find that knowledge of basic financial concepts is lacking among women, the less educated, and those living in East Germany. In particular, those with low education and low income in East Germany have little financial literacy compared to their West German counterparts. Interestingly, there is no gender disparity in financial knowledge in the East. In order to investigate the nexus of causality between financial literacy and retirement planning we develop an IV strategy by making use of regional variation in the financial knowledge of peers. We find a positive impact of financial knowledge on retirement planning. |
| Keywords: | Financial sophistication, retirement planning, life-cycle savings, financial education, East Germany |
| JEL: | D91 |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:crp:wpaper:109&r=eur |
| By: | Lindh, Thomas (Institute for Futures Studies); Hong, Ying (Institute for Futures Studies) |
| Abstract: | <p> This paper studies whether Swedish fertility swings and variation in public expenditure for children are related events. In the 1930s Swedish birth rates had fallen to levels close to the death rates and in public discourse this was perceived as a major social and national crisis, spurring a range of social policy reforms. While total fertility rates in Sweden have varied over large spans the completed cohort fertility rates are almost constant around 2 children per woman for women born in the 20th century. Using unique data for the years 1930-1997 on public expenditure per eligible child for schools, child allowances and child care we estimate age-specific fertility for broad age groups as a function of these variables. The results indicate that the age group 25-29 is most sensitive to variations in this public expenditure thus providing a tentative explanation of the swings in period fertility in terms of policy induced tempo variation. School expenditure is negatively correlated to fertility while child care and child allowance is positively correlated. This pattern is consistent with a quantity-quality trade-off by the parents. To check the predictive power of the model we use data from 1998-2007 and get an excellent prediction of the fertility turn-around after 1999 for all age groups except 35 and above where we tend to under-predict at the 10-year horizon. Further research along these lines is needed to uncover the causal mechanisms of these very stable correlations. <p> |
| Keywords: | Fertility; Children expenditure; Fertility factors; Sweden; Demography |
| JEL: | J13 |
| Date: | 2011–04–11 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ifswps:2011_002&r=eur |
| By: | Ramon Gomez-Salvador (European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main); Adriana Lojschova (European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main); Thomas Westermann (European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main) |
| Abstract: | This paper uses micro data from the European Union Statistics on Income and Living Conditions (EU-SILC) to generate structural information for the euro area on the incidence of household indebtedness and the debt service burden. It breaks down incidence by characteristics such as income, age and employment status, all features that can be cross-referenced in the light of theories such as the life-cycle hypothesis. Overall, income appears to be the dominant feature determining the debt status of a household. The paper also examines the evolution of indebtedness and debt service burdens over time and compares the situation in the euro area with that in the United States. In general, the results suggest that the macroeconomic implications of indebtedness for monetary transmission and fi nancial stability are not associated with the mean but with the tails of the distribution. JEL Classification: C42, D12, D14, G21 |
| Keywords: | Household indebtedness, financial vulnerability, micro survey data, monetary transmission. |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbops:20110125&r=eur |
| By: | Elsa Fornero (University of Turin and CeRP-Collegio Carlo Alberto); Chiara Monticone (CeRP-Collegio Carlo Alberto) |
| Abstract: | By requiring individuals to decide whether to participate in (newly established) pension funds, how much to contribute and how to invest their retirement wealth, pension reforms have raised concerns about the ability of households to deal with financial decisions. Using the Bank of Italy's Survey on Household Income and Wealth, our empirical analysis shows that most individuals lack knowledge of basic concepts such as interest rates and inflation. Males, the more educated and residents in the Centre-North possess higher literacy. As for the effects, financial literacy has a positive and significant impact on the probability of pension plan participation. |
| Keywords: | Financial literacy, retirement planning,pension plan participation |
| JEL: | D91 |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:crp:wpaper:111&r=eur |