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on Microeconomic European Issues |
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Issue of 2011‒09‒22
sixteen papers chosen by Giuseppe Marotta University of Modena and Reggio Emilia |
| By: | Glocker, Daniela; Steiner, Viktor |
| Abstract: | Incentives to invest in higher education are affected by both the direct wage effect of human capital investments and the indirect wage effect resulting from lower unemployment risks and shorter spells in unemployment associated with higher educated. We analyse the returns to education in Austria, Germany, Italy, Sweden and the United Kingdom, countries which differ significantly regarding both their education systems and labour market structure. We estimate augmented Mincerian wage equations accounting for the effects of unemployment on individual wages using EU-SILC data. Across countries we find a high variation of the effect of education on unemployment duration. Overall, the returns to education are estimated to be the highest in the UK, and the lowest for Sweden. A wage decrease due to time spent in unemployment results in a decline in the hourly wages in Austria, Germany and Italy. |
| Keywords: | EU-SILC; returns to education; unemployment |
| JEL: | H42 I21 J31 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:8568&r=eur |
| By: | Benjamin Elsner (Department of Economics, Trinity College Dublin); |
| Abstract: | This paper studies the impact of a large emigration wave on real wages in the source country. Following EU enlargement in 2004, a large share of the workforce of the Central and Eastern Europe emigrated to Western Europe. Using data from Lithuania for the calibration of a factor demand model I show that emigration had a significant short-run impact on real wages in the source country. In particular, emigration led to a change in the wage distribution between young and old workers. The wages of young workers increased by 6%, whereas the wages of old workers decreased by around 1%. On the contrary, I find no effect on the wage distribution between workers of different education levels. |
| Keywords: | Emigration, EU Enlargement, European Integration, Wage Distribution |
| JEL: | F22 J31 O15 R23 |
| Date: | 2011–01 |
| URL: | http://d.repec.org/n?u=RePEc:tcd:tcduee:tep1311&r=eur |
| By: | Luis Aguiar (Departamento de Economía - Universidad Carlos III de Madrid); Philippe Gagnepain (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris) |
| Abstract: | The goal of this paper is to assess the impact on the performance of firms that participate in Research Joint Ventures (RJVs) funded by the Fifth European Framework Programme for Research and Technological Development (EU-FP5). A special emphasis is made on the User-friendly Information Society (IST) programme, one of the most important thematic programmes of the EU-FP5. We use the funding available to the firms as an instrumental variable to account for self-selection and estimate the Local Average Treatment Effect (LATE) of participation by considering labor productivity and profit margin as performance measures. Our results show a large and positive impact of participation on the labor productivity of the firms, whereas the effect on profit margin is weaker. When taking into account the size of the RJV, we find that the positive impact on labor productivity comes mainly from participation in large projects and that participation in smaller RJVs has a negative effect on the profit margin. |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:hal-00622969&r=eur |
| By: | Alejandro Justiniano; Claudio Michelacci |
| Abstract: | We set-up a real business cycle model with search and matching frictions driven by several shocks, which nests full Nash Bargaining and wage rigidity as special cases and includes other transmission mechanisms suggested by the literature for the propagation and amplification of disturbances. The model is estimated using full information methods for two Anglo-Saxon countries (the US and the UK), two Continental European countries (France and Germany) and two Scandinavian countries (Norway and Sweden). We conduct inference with mixed frequency data, combining quarterly series for unemployment, vacancies, GDP, consumption, and investment, with annual data on unemployment flows. Parameters and shocks are estimated separately for each country, which can then vary in terms of search and hiring costs, workers' bargaining power, unemployment benefits levels, wage rigidity and the stochastic properties of disturbances. Overall, the structural model accounts reasonably well for differences in labor market dynamics observed between the two sides of the Atlantic and within Europe. Our estimates indicate that there is considerable cross-country variation in the contribution of technology shocks to the cyclical fluctuations of the labor market. Technology shocks alone replicate remarkably well the volatility in vacancies, unemployment and finding probabilities observed in US, with mixed success in Europe. In contrast, matching shocks and job destruction shocks play a larger role in most European countries relative to the US. |
| JEL: | E0 E24 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:17429&r=eur |
| By: | Fabrizio Botti; Marcella Corsi |
| Abstract: | Microfinance promise to serve low-income or disadvantaged beneficiaries excluded from the formal banking sector in a financially sustainable way (thus to achieve the so called “double bottom line” of financial and social performance) built excitement around the development of a global industry. However, for a long time an anti-subsidy position embedded in the international key donor community have shown little concern of social performance data and information on beneficiaries profiles in terms of various dimension of social and financial exclusion. Until recently, most of the emphasis of microfinance advocates has been devoted to MFIs financial performance following the “win-win” proposition, according to which financial viability should be sufficient to show social impact, a view that is supported by a controversial evidence and is based on a selective understanding of conceptual facts. Nevertheless, several initiatives recently translated into the Social Performance Task Force (SPTF) attempt to explore social aspects of microfinance providing a new definition of social performance more focused on the whole process leading to a social impact. Aim of this paper is to measure European MFIs social performance according to a core set of common indicators developed by the SPTF but using data collected in 2010 by the European Microfinance Network (EMN) on a sample of 170 microfinance actors operating in 21 countries out of 27 European Union (EU) member countries, current EU candidate countries and countries belonging to the European Free Trade Area (EFTA). The reference framework followed in the current social performance analysis examines the whole process of translating MFIs mission into social impact and includes the analysis of three connected dimensions of the social performance process corresponding to different set of indicators: the intent of the MFI, the effectiveness of the internal system and activities in achieving its targets, MFI outputs and eventually its capacity to positively affect clients life and achieve social goals. |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:sol:wpaper:2013/97213&r=eur |
| By: | Gable, Susanna Lundstrom; Mishra, Saurabh |
| Abstract: | Technology has changed the nature of service activities and made them more productive, tradable and fragmented in the global supply chain. Has Europe's growth been benefiting from the ongoing globalization of services? Services dominate growth in EU-15 countries and, to a lesser extent, in New Member States (NMS) and Accession (ACC) countries. Except in the ACC region, Europe has maintained specialization in service exports. Service productivity, tradability, and exports of modern services are high in EU-15, growing fast in NMS while at a lower pace in ACC. Service export sophistication is important for growth across the region, but especially in NMS. |
| Keywords: | Commodities,Public Sector Corruption&Anticorruption Measures,Housing&Human Habitats,Economic Theory&Research,Banks&Banking Reform |
| Date: | 2011–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5793&r=eur |
| By: | Hernandez, Diego; Rudolph, Alexandra |
| Abstract: | At a time of increased attention on the international agenda for human trafficking, this paper examines the determinants of human trafficking inflows in to 13 European countries based on official records. By employing a fixed effects zero-inflated, negative binomial gravity-type model, we address data characteristics appropriately. The econometric analysis suggests that human trafficking occurs in well established routes for migrants and refugees. Victims are more likely to be transported to, and exploited in, host countries with suboptimal institutional quality levels. Countries whose nationals do not require a visa for short term visits are especially prone to being potential source countries. Legal status and regulation of commercial sex services does not affect the pattern of trafficking flows. -- |
| Keywords: | Human trafficking,Gravity Model,Illegal Migration,International Organized Crime |
| JEL: | F22 J61 K14 K42 O17 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:gdec11:83&r=eur |
| By: | Johannes Paha (University of Giessen); Dirk Rompf (University of Giessen); Christiane Warnecke (University of Giessen) |
| Abstract: | The current level of competition in European commercial passenger rail markets is low and empirical data on customer preferences in intramodal competition has hardly been available, yet. Our study raises the knowledge of competition in commercial passenger rail by exploring the determinants of customers’ choice behaviour on two cross-border routes, Cologne-Brussels and Cologne-Amsterdam. We analyse stated preference information from about 700 on-train interviews by means of multinomial Logit regressions. Our analysis indicates that customers experiencing competition (Cologne-Brussels) show a higher preference for competitive services than customers for whom competition is a purely hypothetical situation (Cologne-Amsterdam). Moreover, travellers show a status quo bias, i.e. a preference for the service provider on whose trains they were interviewed which partly stems from switching costs. These findings regarding status quo bias and switching costs complement previous studies on the outcome of intramodal competition, implying that entry is even more difficult than they predicted. |
| Keywords: | Competition, Passenger, Rail, Transport, Discrete Choice, Multinomial Logit |
| JEL: | C25 D12 D40 L92 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:mar:magkse:201137&r=eur |
| By: | Jaraite, Jurate (CERE); Kažukauskas, Andrius (CERE) |
| Abstract: | The EU farmers are subject to mandatory cross compliance measures requiring them to meet environmental conditions to be eligible for public support. These obligations reinforce incentives for the farmers to change their behaviour towards the environment. We apply quasi-experimental methods to measure the causal relationship between cross-compliance and farm environmental performance. We find that cross compliance reduced farm fertiliser and pesticide expenditure. This result also holds for farmers who participated in other voluntary agro-environmental schemes. However, the results do not support our expectations that farmers who relied on larger shares of public payments had a stronger motivation to improve their environmental performance. |
| Keywords: | agriculture; Common Agriculture Policy; cross-compliance; environment; EU; farm |
| JEL: | Q12 |
| Date: | 2011–09–09 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:slucer:2011_013&r=eur |
| By: | Ceren Ozgen (Department of Spatial Economics, VU University Amsterdam) |
| Abstract: | Due to the growth in international migration in recent decades, the workforce of firms in host countries has become considerably more diverse, both demographically and culturally. It is an important question for firms and for governments to ask whether there are some productivity-enhancing externalities gained from this growing diversity within firms. In recent years migration research has demonstrated positive economic impacts of cultural diversity on productivity and innovation at the regional level. However, there is a dearth of research on the links between innovation and migrant diversity at the firm level. In this paper we construct and analyse a unique linked employer-employee micro-dataset of 4582 firms, based on survey and administrative data obtained from Statistics Netherlands. Excluding firms in the hospitality industry and other industries that employ low-skilled migrants, we use the local number of restaurants with foreign cuisines and the historical presence of migrant communities as valid instruments of endogenous migrant settlement. We find that firms in which foreigners account for a relatively large share of employment are somewhat less innovative. However, there is strong evidence that firms that employ a more diverse foreign workforce are more innovative, particularly in terms of product innovations. |
| Keywords: | immigration, innovation, cultural diversity, knowledge spillovers, linked employer-employee data, Netherlands |
| JEL: | F22 O31 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:nor:wpaper:2011013&r=eur |
| By: | Angela Cipollone; Marcella Corsi; Carlo D'Ippoliti |
| Abstract: | By considering the case of Italy we show that despite much rhetoric and expectations about the fact that women have gradually overcome men in terms of educational attainments, they still lack behind in terms of the main skills and competencies that can profitably be used in the market. On the one hand, women lack both general and specific knowledge related to the labour market, on the other hand the skills and competencies they acquire by carrying on unpaid work do not seem to be positively valued by the market. However, women also appear to exhibit higher returns to knowledge, both in terms of returns to education and of returns to work-related knowledge. Women’s employment is more determined by the joint impact of care burdens and knowledge-determined opportunities, and their wages are more significantly affected by our indicators of knowledge. More than for men, while specialisation improves “insider” women’s wages, it reduces “outsider” women’s ability to obtain a job. |
| Keywords: | gender differentials; returns to knowledge; human capital |
| JEL: | J24 J16 C43 J71 C14 |
| Date: | 2011–02–04 |
| URL: | http://d.repec.org/n?u=RePEc:dul:wpaper:2013/97186&r=eur |
| By: | Giebel, Olaf; Breitschopf, Barbara |
| Abstract: | Renewable energy support mechanisms affect the attractiveness of projects by influencing uncertainties in revenues or expenditures and ultimately result in a change in the financing costs. The influence of feed-in tariffs on financing costs was investigated. 26 wind onshore investors were surveyed in a conjoint analysis and the results were used in a cash flow model to quantify the impact. The introduction of premium models under a fixed remuneration tariff scheme seems to increase the financing costs considerably. -- |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:fisisi:s112011&r=eur |
| By: | Lee E. Ohanian; Andrea Raffo |
| Abstract: | We build a new quarterly dataset of aggregate hours worked consistent with standard NIPA constructs for 14 OECD countries over the last fifty years. We find that cyclical features of labor markets across countries differ markedly from the accepted empirical facts reported in the literature based on either just U.S. hours data, or based on cross-country employment data. We document that total hours worked in many OECD countries are about as volatile as output, that a relatively large fraction of labor market adjustment takes place along the intensive margin outside the United States, and that the volatility of total hours relative to output volatility has increased over time in almost all countries. We use these data to re-assess productivity and labor wedges during the Great Recession and during prior recessions. We find that the Great Recession in many OECD countries is a significant puzzle in that labor wedges are quite small, while those in the U.S. Great Recession - and those in previous European recessions - are much larger. These new data indicate that understanding cyclical labor fluctuations in OECD countries requires understanding why hours fluctuate so much more than previously considered, how and why labor markets changed so much in the last few years, why cyclical adjustment of hours per worker in countries with large firing costs is not even larger than observed, and why the Great Recession differs so much across countries. |
| JEL: | E0 F41 J22 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:17420&r=eur |
| By: | Lundborg, Petter (Lunds University); Nilsson, Martin (IFAU - Institute for Labour Market Policy Evaluation); Vikström, Johan (Institute for Labout Market Policy Evaluation) |
| Abstract: | In this paper, we test for the existence of socioeconomic heterogeneity in the effect of health shocks on labor market outcomes using register data on the total population of Swedish workers. We estimate fixed effect models and use unexpected hospitalizations as a measure of health shocks. Our results suggest large heterogeneity in the effects, where low educated individuals suffer relatively more from a given health shock. This result holds across a wide range of different health shocks and our results suggest that the heterogeneity increases by age. We test several potential explanations to these results. Extensive sensitivity analyses, including a difference-in-differences matching model, show that our estimates are robust to a number of potential threats. We conclude that socioeconomic heterogeneity in the effect of health shocks offers one explanation to why the socioeconomic gradient in health widens during middle ages. |
| Keywords: | Health; health shocks; socioeconomic status; life-cycle |
| JEL: | I10 I12 |
| Date: | 2011–08–31 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ifauwp:2011_011&r=eur |
| By: | Gallié, Emilie-Pauline; Legros, Diego |
| Abstract: | This article investigates the effects of human capital and technological capital on innovation. While the role of technological capital as measured by research and development (R&D) expenditure has been intensively investigated, few studies have been made on the effect of employee training on innovation. This article explores the relationship between innovation and firm employee training. Our methodological approach contributes to the literature in three ways. We propose various indicators of firm employee training. We build a count data panel with a long time-data series to deal with the issue of firms’ heterogeneity. We propose a dynamic analysis. Using dynamic count data models on French industrial firms over the period 1986–1992, we find positive and significant effects of R&D intensity and training on patenting activity. Whatever the indicators of training our results show that the firm employee training has a positive impact on technological innovation. |
| Keywords: | Patents; R&D; Employee training; Count panel data; Linear feedback model; |
| JEL: | C23 C25 J24 L60 O31 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ner:dauphi:urn:hdl:123456789/6962&r=eur |
| By: | Bertoli, Simone (European University Institute); Fernández-Huertas Moraga, Jesús (FEDEA, Madrid) |
| Abstract: | The rate of migration observed between two countries does not depend solely on their relative attractiveness, but also on the one of alternative destinations. Following the trade literature, we term the influence exerted by other destinations on bilateral flows as Multilateral Resistance to Migration, and we show how it can be accounted for when estimating the determinants of migration flows in the context of a general individual random utility maximization model. We propose the use of the Common Correlated Effects estimator (Pesaran, 2006) and apply it to high-frequency data on the Spanish immigration boom between 1997 and 2009. Compared to more restrictive estimation strategies developed in the literature, the bias goes in the expected direction: we find a smaller effect of GDP per capita and a larger effect of migration policies on bilateral flows. |
| Keywords: | international migration, economic determinants, migration policies, time-varying attractiveness, multiple destinations |
| JEL: | F22 O15 J61 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5958&r=eur |