nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2011‒05‒24
fourteen papers chosen by
Giuseppe Marotta
University of Modena and Reggio Emilia

  1. The third pillar in Europe: institutional factors and individual decisions By Le Blanc, Julia
  2. Coverage and adequacy of Minimum Income schemes in the European Union By Figari, Francesco; Haux, Tina; Matsaganis, Manos; Sutherland, Holly
  3. Labour Market Effects of Parental Leave: A European Perspective By Yusuf Emre Akgunduz; Janneke Plantenga
  4. Disability and Social Security Reforms: The French Case By Luc Behaghel; Didier Blanchet; Thierry Debrand; Muriel Roger
  5. Non take up of social benefits in Greece and Spain By Matsaganis, Manos; Levy, Horacio; Flevotomou, Maria
  6. The Determinants of Poverty Transitions in Europe and the Role of Duration Dependence By Andriopoulou, Eirini; Tsakloglou, Panos
  7. Health, Disability and Pathways to Retirement in Spain By Pilar García-Gómez; Sergi Jiménez-Martín; Judit Vall Castelló
  8. Appropriate Financial Instruments for Public-Private Partnership to Boost Cross-Border Infrastructural Development-EU Experience By Geest, Willem van der; Nunez-Ferrer, Jorge
  9. Disability Insurance, Population Health and Employment in Sweden By Lisa Jönsson; Mårten Palme; Ingemar Svensson
  10. On the institutional innovation process : EU regulation through an evolutionary lens By Evita Paraskevopoulou
  11. Depressive mood and children: Europe and South Korea By Antonio Rodríguez; Rosemary L. Hopcroft; Yong-Hwan Noh
  12. European visa cooperation: interest politics and regional imagined communities By Mogens Hobolth
  13. Disability Insurance and Labor Market Exit Routes of Older Workers in The Netherlands By Klaas de Vos; Arie Kapteyn; Adriaan Kalwij
  14. What determines annuity demand at retirement? By Giuseppe Cappelletti; Giovanni Guazzarotti; Pietro Tommasino

  1. By: Le Blanc, Julia
    Abstract: This paper studies and documents household participation in voluntary individual retirement accounts (IRAs) in eleven European countries. Using recently available, internationally comparable data of households aged 50+, we calculate country-by-country average marginal effects of the probability to save in IRAs. We link the evidence from the micro data to the institutional differences in pension systems that prevail across the countries in our sample. Our results indicate that households' participation in the 'third pillar' varies substantially across countries, both due to institutional differences and household characteristics. Higher education is crucial for participation in countries with shorter traditions of IRAs where awareness matters most. Background risk due to expectations of future pension reforms as well as experience with occupational pensions increase voluntary retirement savings additionally for the currently employed individuals in our sample. --
    Keywords: individual retirement accounts,pension reform,consumption and saving over the life-cycle
    JEL: D12 G11 J26
    Date: 2011
  2. By: Figari, Francesco; Haux, Tina; Matsaganis, Manos; Sutherland, Holly
    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: 2010–11–23
  3. By: Yusuf Emre Akgunduz; Janneke Plantenga
    Abstract: We investigate the aggregate-level effects of parental leave legislation on various labour market outcomes of women in 16 European countries for the period since 1970. The paper updates and extends previous findings in the literature. Results show increases in participation rates that diminish with length and generosity of leave schemes. While pure participation numbers may not increase as dramatically as hoped, there is strong evidence of increases in weekly working hours. On the flipside, decreases in wages for high-skilled workers and amplified occupational segregation are likely results of generous leave schemes. We conclude with a discussion of recent debates over extending minimum maternity and parental leave rights on the European level.
    Keywords: Parental leave, gender gap, labour force participation, wages
    JEL: J13 J18 J22
    Date: 2011–04
  4. By: Luc Behaghel; Didier Blanchet; Thierry Debrand; Muriel Roger
    Abstract: The French pattern of early transitions out of employment is basically explained by the low age at “normal” retirement and by the importance of transitions through unemployment insurance and early-retirement schemes before access to normal retirement. These routes have exempted French workers from massively relying on disability motives for early exits, contrarily to the situation that prevails in some other countries where normal ages are high, unemployment benefits low and early-retirement schemes almost non-existent. Yet the role of disability remains interesting to examine in the French case, at least for prospective reasons in a context of decreasing generosity of other programs. The study of the past reforms of the pension system underlines that disability routes have often acted as a substitute to other retirement routes. Changes in the claiming of invalidity benefits seem to match changes in pension schemes or controls more than changes in such health indicators as the mortality rates. However, our results suggest that increases in average health levels over the past two decades have come along with increased disparities. In that context, less generous pensions may induce an increase in the claiming of invalidity benefits partly because of substitution effects, but also because the share of people with poor health increases.
    JEL: H55 H63 J14 J26
    Date: 2011–05
  5. By: Matsaganis, Manos; Levy, Horacio; Flevotomou, Maria
    Abstract: Even though interest in non take up of social benefits is considerable in many European countries, the topic is under-researched in southern Europe. The paper provides preliminary estimates of the extent of non take up of two pairs of means-tested retirement benefits in Greece and Spain. The benefits examined are (i) the minimum pension supplements pensioner social solidarity benefit S and complementos por mnimos, and (ii) the social pensions pension to uninsured elderly and pensin de jubilacin no contributiva. The paper finds that non take up of social benefits in the two countries is rather extensive, examines the methodological difficulties inherent in the analysis of non take up, and concludes with a discussion of the results and their implications.
    Date: 2010–11–24
  6. By: Andriopoulou, Eirini (Athens University of Economics and Business); Tsakloglou, Panos (Athens University of Economics and Business)
    Abstract: The paper examines the mobility into and out of poverty and identifies the determinants of poverty spell beginnings and endings in 14 European Countries for the period 1994-2000, using the European Community Household Panel. The first part of the paper offers a snapshot of poverty mobility in Europe calculating the entry and exit poverty rates, along with the conditional, to the duration of spell, exit probabilities and re-entry rates to poverty. In the second part observed characteristics of the household and the household head are examined in order to identify the determinants of the transitions into and out of poverty, taking into account unobserved heterogeneity across individuals and duration dependence. Multivariate discrete hazard analysis is used and the duration dependence is captured with time dummies. In almost all the 14 EU Member-States examined, the probability of exiting (re-entering) poverty is inversely related to the duration of the poverty (non-poverty) spell. The effect is significant to the inclusion of variables capturing observed heterogeneity (socioeconomic characteristics of the household head and the household and particular employment and demographic events), as well as to the inclusion of a random effects factor capturing the unobserved heterogeneity across individuals. With regards to the socio-economic variables, in most countries, households headed by young or elderly individuals, as well as households with dependent children are in higher risk of staying longer in poverty. In many cases, event variables improve the model significantly and highlight the mechanisms that bring individuals into and out of poverty.
    Keywords: poverty dynamics, EU
    JEL: I32 I38
    Date: 2011–05
  7. By: Pilar García-Gómez; Sergi Jiménez-Martín; Judit Vall Castelló
    Abstract: In this paper we analyze the trends in labor force participation and transitions to benefit programs of older workers in relation to health trends as well as recent Social Security reforms. Our preliminary conclusions are pessimistic regarding the effect of health improvements on the labor market attachment of older workers since we show that despite the large improvements in the mortality rates among older individuals in Spain, the employment rates of individuals older than fifty-five remain lower than the ones observed in the late 1970s. Some caution should remain in our conclusions as the evidence on health trends is inconclusive. Regarding the effect of Social Security reforms, we find that both the 1997 and the 2002 reform decreased the stock into old-age benefits at the cost of an increased share of the participation into disability. Finally, we find that there was a significant increase in the outflow from employment into disability after the 2002 reform.
    JEL: H55 I18 J11
    Date: 2011–05
  8. By: Geest, Willem van der (Asian Development Bank Institute); Nunez-Ferrer, Jorge (Asian Development Bank Institute)
    Abstract: The member states of the European Union (EU) and the EU institutions have increasingly been using public-private partnerships (PPPs) to accelerate the development of (ambitious) trans-national infrastructure. This paper argues that in the EU (i) private sector partners remain risk-averse; and (ii) risk-pooling across a larger number of tax-payers tends to reduce the cost of risk to zero, making EU funds highly desirable and sought after for public infrastructure development. This paper argues that private equity has not been forthcoming to the extent that had been expected by those propagating this method of finance. In those instances where private non-publicly guaranteed resources have been used, the distribution of risks between public and private partners remained asymmetric, with public governmental bodies carrying the financial risks, which ultimately may become a contingent liability for the country’s public finances. However, EU and European Investment Bank (EIB) public funding is used not simply because the risks are spread more widely, but rather because EU rules and regulations for using such funds lead to better preparation of projects and greater efficiency gains in project implementation and delivery.
    Keywords: public-private partnerships; trans-national infrastructure; european union institutions; european union; public infrastructure development
    JEL: G32 H44 O19
    Date: 2011–05–13
  9. By: Lisa Jönsson; Mårten Palme; Ingemar Svensson
    Abstract: This paper describes the development of population health and disability insurance utilization for older workers in Sweden and analyzes the relation between the two. We use three different measures of population health: (1) the mortality rate (measured between 1950 and 2009); (2) the prevalence of different types of health deficiencies obtained from Statistics Sweden’s Survey on Living Conditions (ULF, 1975-2005); (3) the utilization of health care from the inpatient register (1968–2008). We also study the development of the relative health between disability insurance recipients and non-recipients. Finally, we study the effect of the introduction of less strict eligibility criteria for older workers in 1970 and 1972 as well as the subsequent abolishment of these rules in 1991 and 1997, respectively.
    JEL: H51 H55 I18 J26
    Date: 2011–05
  10. By: Evita Paraskevopoulou
    Abstract: The focal point of this paper is the study of the process of emergence of novel institutions and the identification of factors that may influence the outcome of this process. We view inst accepted sets of rules that influence We consider regulations as endogenously emerging institutions that evolve in accordance to other socioeconomic factors and analyze the regulatory process at each of its stages adopting an evolutionary approach. Evidence shows that the regulatory process resembles the innovation process as it can be viewed as a process of knowledge accumulation and transmission that is facilitate empirically contextualized in the European political system, the detergents industry and specific regulations formed at European level. Data is drawn by secondary resour of public and private stakeholders participating in the process
    Keywords: Evolutionary theory, Institutions, Regulation, Policy
    JEL: K20 L50 L65 O25 O43
    Date: 2011–04
  11. By: Antonio Rodríguez (School of Public Health, Department of Health Services Research, University of Aarhus); Rosemary L. Hopcroft (University of North Carolina at Charlotte); Yong-Hwan Noh (Seoul Women’s University)
    Abstract: Using data for the third wave from the European Social Survey (ESS) and the Fourth Korean National Health and Nutrition Examination Survey (K-NHANES), this research examines the relationship between having children at home and depression among men and women aged 18-75 years. Multilevel and probit regression models are applied. Our results show that there is a gender differential in depression. Having children at home improves psychological well-being for men only in 23 European countries and South Korea. In Europe we also find that depression tends to be lower in countries in which per capita income is higher. The results also show that household income is negatively associated with levels of depression in South Korea.
    Keywords: Depression, Europe, Cross-national analysis, Children, Multilevel model, Probit model
    JEL: I12 Z13 J13
    Date: 2011–04
  12. By: Mogens Hobolth
    Abstract: Since the early 1990s the European Union has struggled to increase integration in the sovereignty sensitive areas of justice and home affairs and foreign policy. The aim of this paper is to enhance our understanding of what patterns of cooperation have been established between the member states, and why. I do so by analysing the case of short-stay visa policy. Visas are a corner stone of EU’s border control, regulating access to the Union’s area of freedom, security and justice. It is moreover an instrument used in foreign and diplomatic relations. As a field where the member states’ cooperation is particularly intense it is an ‘extreme case’ well-suited for drawing out empirical patterns and developing theoretical concepts. The paper is based on a network analytical approach and a new dataset of all the EU/Schengen member states’ mutual consular visa assistance agreements. This I use to document the extent and pattern of cooperation from 2005 to 2010. I show that the member states rely intensively on each other’s consular services. They mainly share sovereignty in four distinct regional clusters – a Nordic, Benelux, Southern European and an emerging Central Eastern. France and Germany are at the centre of the network. To explain this structure of cooperation I discuss the relative merits of realist, liberal intergovernmentalist and constructivist approaches. I show how they each identify important dynamics but emphasise the relative merits of a constructivist perspective. I put forward a new concept of ‘regional imagined communities’ which explains cooperation by the existence of shared identities owing to regional commonalities in language and state-building histories. I argue that the concept improves our understanding of European integration in visa policy, and suggest it might hold wider potential for explaining dynamics of collaboration in other sovereignty sensitive policy areas.
    Keywords: Regional imagined communities, Intensive transgovernmentalism, Sovereignty, Justice and home affairs, European foreign policy, Schengen, Visa, Consular cooperation
    Date: 2011–05
  13. By: Klaas de Vos; Arie Kapteyn; Adriaan Kalwij
    Abstract: This paper presents information on labor market participation of the elderly, mortality and health, pathways to retirement and rates of participation in various earnings replacing programs in the Netherlands. It presents an overview of reforms to Disability Insurance (DI) and other income maintenance and early retirement programs over the past few decades, and examines to what extent these reforms have affected labor market exit routes of older workers. The overall picture that emerges is that DI receipt appears unrelated to the general health of the population and that over the last two decades relatively fewer older workers exit the labor market through DI. This reduction may, arguably, in part be attributed to stricter DI eligibility rules.
    JEL: J26
    Date: 2011–05
  14. By: Giuseppe Cappelletti (Bank of Italy); Giovanni Guazzarotti (Bank of Italy); Pietro Tommasino (Bank of Italy)
    Abstract: In most advanced countries, future retirees will have to rely less on social security schemes and more on private pension plans, which mostly leave to the worker the choice between ashing-in or annuitizing pension wealth at retirement. Therefore, a better understanding of the determinants of the demand for annuities will soon become a priority. Research in this field has been hampered by lack of data (due to current market thinness) and by difficulties in disentagling demand from supply-side effects. In this paper, we avoid these problems resorting to ad hoc survey data from Italy. Our results highlight the importance of wealth, impatience, education and (to a lesser extent) financial literacy in shaping annuity demand.
    Keywords: annuities, retirement, life cycle model
    JEL: D91 G23 H55 J26
    Date: 2011–04

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