nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2011‒11‒21
twenty papers chosen by
Giuseppe Marotta
University of Modena and Reggio Emilia

  1. The social economy of ageing : Job quality and pathways beyond the labour market in Europe By Catherine Pollak; Nicolas Sirven
  2. The gender gap of returns on education across West European countries By Mendolicchio, Concetta; Rhein, Thomas
  3. Unemployment Benefits and Immigration: Evidence from the EU By Giulietti, Corrado; Guzi, Martin; Kahanec, Martin; Zimmermann, Klaus F.
  4. Patterns of persistent poverty: evidence from EU-SILC By Jenkins, Stephen P.; Philippe van Kerm
  5. Regional labor demand and national labor market institutions in the EU15 By Herwartz, Helmut; Niebuhr, Annekatrin
  6. The Effects of the Recent Economic Crisis on Social Protection and Labour Market Arrangements across Socio-Economic Groups By Basso, Gaetano; Dolls, Mathias; Eichhorst, Werner; Leoni, Thomas; Peichl, Andreas
  7. Counting the Costs of Collective Rights Management of Music Copyright in Europe By Ghafele, Roya; Gibert, Benjamin
  8. Can policy make us happier? Individual characteristics, socioeconomic factors, and life satisfaction in Central and Eastern Europe By Andrés Rodríguez-Pose; Kristina Maslauskaite
  9. Technological Dynamics and Social Capability: Comparing U.S. States and European Nations By Jan Fagerberg; Maryann Feldman; Martin Srholec
  10. Options for Europe when acting alone on CO2 emissions from shipping By Kågeson, Per
  11. A Panel Data Econometric Study of Corporate Tax Revenue in European Union: Structural, Cyclical Business and Institutional Determinants By Marta Rodrigues Monteiro; Elísio Fernando Moreira Brandão; Francisco Vitorino da Silva Martins
  12. Skills or culture? An analysis of the decision to work by immigrant women in Italy By Antonio Accetturo; Luigi Infante
  13. Ethnic origin, local labour markets and self-employment in Sweden: A Multilevel Approach By Andersson, Lina; Hammarstedt, Mats; Hussain, Shakir; Shukur, Ghazi
  14. Performance-related Funding of Universities: Does More Competition Lead to Grade Inflation? By Bauer, Thomas; Grave, Barbara S.
  15. Retail sector concentration and price dynamics in the euro area: a regional analysis By Emanuela Ciapanna; Concetta Rondinelli
  16. An Empirical Analysis on the European Market of Human Experimentation By Ippoliti, Roberto
  17. Survival expectations, subjective health and smoking: evidence from European countries By S. Balia ;
  18. Improving the school-to-work transition for vocational students - What can we learn from research? By Lindahl, Lena
  19. Unemployment Duration and Sport participation : evidence from Germany By Charlotte Cabane
  20. The educational attainment, labour market participation and living conditions of young Roma in Bulgaria, Hungary and Romania By Jaromir Cekota; Claudia Trentini

  1. By: Catherine Pollak (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I, IRDES - Institut de Recherche et Documentation en Economie de la Santé - Institut de la Recherche et Documentation en Economie de la Santé); Nicolas Sirven (IRDES - Institut de Recherche et Documentation en Economie de la Santé - Institut de la Recherche et Documentation en Economie de la Santé)
    Abstract: This article analyses the effect of job quality on pathways to productive activities of older workers in Europe. Using comparative panel data from SHARE, we analyse the medium term effects of working conditions of workers aged 50-64 on three participation outcomes (staying in employment, participating in social activities and providing informal care) with a trivariate probit model. Several aspects of job quality appear to play a role for participation in society as a whole, including participation in social activities. Care-giving on the other hand appears independent from the considered job quality indicators, but very gender specific. However, trade-offs between full time work and care activities appear in some cases. Therefore, better working conditions and the opportunity for work time arrangements should be developed if one aims to foster participation of older workers in the society.
    Keywords: Job quality, ageing, early retirement, social participation, informal care.
    Date: 2011–10
  2. By: Mendolicchio, Concetta (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Rhein, Thomas (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])
    Abstract: "We study the returns on education in Europe in a comparative perspective. We extend the model of de la Fuente [(2003). Human Capital in a Global and Knowledgebased Economy. part II: Assessment at the EU Country Level. Report for the European Commission], by estimating the values of the relevant parameters for men and women and introducing several variables specifically related to maternity leaves and benefits. As a preliminary step, we evaluate the effect of education on the wage profile. We estimate the Mincerian coefficients for 12 West European countries using the EU-SILC data for 2007 and use them as input in the optimisation problem of the individual to calibrate the model. Finally, we analyse the impact and relevance of several public policy variables. In particular, we evaluate the elasticities of the returns on education with respect to unemployment benefits, marginal and average tax rates, maternity leaves and childcare benefits." (Author's abstract, IAB-Doku) ((en))
    Keywords: Bildungsertrag - internationaler Vergleich, Humankapital, geschlechtsspezifische Faktoren, Westeuropa, Österreich, Belgien, Dänemark, Frankreich, Bundesrepublik Deutschland, Irland, Italien, Luxemburg, Niederlande, Portugal, Spanien, Schweden
    JEL: I21
    Date: 2011–10–11
  3. By: Giulietti, Corrado (IZA); Guzi, Martin (IZA); Kahanec, Martin (Central European University, Budapest); Zimmermann, Klaus F. (IZA and University of Bonn)
    Abstract: The paper studies the impact of unemployment benefits on immigration. A sample of 19 European countries observed over the period 1993-2008 is used to test the hypothesis that unemployment benefit spending (UBS) is correlated with immigration flows from EU and non-EU origins. While OLS estimates reveal the existence of a moderate correlation for non-EU immigrants only, IV and GMM techniques used to address endogeneity issues yield, respectively, a much smaller and an essentially zero causal impact of UBS on immigration. All estimates for immigrants from EU origins indicate that flows within the EU are not related to unemployment benefit generosity. This suggests that the so-called "welfare migration" debate is misguided and not based on empirical evidence.
    Keywords: immigration, unemployment benefit spending, welfare magnets, European Union
    JEL: H53 J61
    Date: 2011–10
  4. By: Jenkins, Stephen P.; Philippe van Kerm
    Abstract: The persistent at-risk-of-poverty rate is one of the EUs 11 primary indicators of social inclusion but it has received little attention compared to the current at-risk-of-poverty rate. Using the 2008 EU Statistics on Income and Living Conditions (EU-SILC) database, we compare persistent income poverty rates across European nations and examine differences in poverty profiles for subgroups defined by age and sex. We draw attention to similarities between the profiles for persistent at-risk-of-poverty rates and at-risk-of-poverty rates, and are led to question the relevance of the former measure in its current form as a key EUindicator of social progress.
    Date: 2011–11–10
  5. By: Herwartz, Helmut; Niebuhr, Annekatrin
    Abstract: The labor market effects of the recent financial and economic crisis are rather heterogeneous across countries and regions. Such differences in labor market performance among industrialized countries are an issue of ongoing research. The objective of this paper is to analyse labor market disparities among European regions and to provide evidence on the factors behind these differences. Whereas previous research focused on effects of national labor market institutions, we also take structural characteristics of regions into account and investigate differences in labor demand responsiveness and their potential determinants. The data set covers the NUTS2 regions in the EU15 for the period 1980 to 2008. We apply an error correction model that is combined with a spatial modeling approach in order to account for interaction among neighboring labor markets. Our findings point to substantially distinct labor demand responses to changes in output and wages among European countries and regions. Moreover, the rate of adjustment to disequilibrium is subject to a signifcant variation across units of observation. Whereas evidence on the significance of region specific variables as explanatory factors is weak, labor market institutions, especially regulations that affect the determination of wages, explain an important fraction of the disparities. --
    Keywords: Regional labor markets,labor demand,institutions,Europe,error correction model
    JEL: C23 J23 R23
    Date: 2011
  6. By: Basso, Gaetano (University of California, Davis); Dolls, Mathias (IZA); Eichhorst, Werner (IZA); Leoni, Thomas (WIFO - Austrian Institute of Economic Research); Peichl, Andreas (IZA)
    Abstract: The Great Recession did not only affect European countries to a varying extent, its impact on national labour markets and on specific socio-economic groups in those markets also varied greatly. Institutional arrangements such as employment protection, unemployment insurance benefits and minimum income support, working time flexibility and wage setting played a crucial role in determining to what extent the economic crisis led to higher unemployment, wage cuts or income losses and rising poverty. As the crisis gained momentum, the action of automatic stabilisation mechanisms built into the national tax-benefit and social protection systems was accompanied by heterogeneous sets of discretionary policy measures. While these factors can explain cross-country variation in labour market developments, they also lead to an unequal distribution of economic risks associated with the crisis across socio-economic groups. The present paper aims to investigate and assess to what extent the financial and economic crisis that hit the global economy in 2008-2009 impacted these labour market developments and to what extent different socio-economic groups were affected.
    Keywords: automatic stabilisers, unemployment protection, tax systems, Europe, Great Recession
    JEL: H24 J65 J68
    Date: 2011–10
  7. By: Ghafele, Roya; Gibert, Benjamin
    Abstract: The identification and clearance of music copyright is a complex process that suffers from high transaction costs when managed by individual rightsholders. The pooling of music copyright in collective rights management organizations has historically reduced these costs, while providing a larger, and thus more attractive, repertoire to commercial users via the issuance of blanket licenses.However, the development of digital distribution channels and automated clearance technologies for music copyright across multiple borders presents a number of challenges to the current system. As music consumption increasingly takes digital forms, Europe must modernize its collective rights management system in response. The results of this study show there is a very large market for digital music in Europe. As broadband penetration increases and competition amongst Internet Service Providers (ISPs) in Europe enhances access to the Internet, this market will grow rapidly. The market is valued at over 2.6 billion Euro in France, Germany and the UK alone. This constitutes a potential royalty market of 212 million Euro. Yet, only 49 million Euro in royalty revenue from online sources was collected by SACEM, GEMA and PRS for Music. Moreover, the majority of this revenue was collected by PRS for Music in the UK, which is the smallest of the three markets but by far the most efficient CRMO for the collection of royalties from online sources. Other nations in Europe, though significantly smaller, still represent a valuable market opportunity. The disparity between potential and actual revenue for all of the European markets suggests there are problems with the current collective rights management system. The percentage of the royalty market captured in the USA was over 4% more than the European average. New solutions should be sought to capitalize on the market opportunity of digital music services in light of increasing broadband penetration and changing consumer patterns in Europe. This should help unlock the potential of digital music markets, consolidate the single European market, increase competition in the administration of collective rights, and provide better services to European consumers.
    Keywords: Transaction Cost Theory; Collective Rights Management; Digital Music Market; European Union; Royalty Distribution Efficiency
    JEL: L44 O34 Z11
    Date: 2011–10–17
  8. By: Andrés Rodríguez-Pose (IMDEA Social Sciences Institute); Kristina Maslauskaite (College of Europe, Bruges, Belgium)
    Abstract: In the last decade, Central and Eastern European (CEE) countries have witnessed a rapid economic convergence vis-à-vis Western Europe. However, this rapid growth has not been matched by a similarly rapid increase in life satisfaction, which has remained low in the European context. This paper sets out to address this conundrum, by looking at the individual and macro-level determinants of individual life satisfaction in ten CEE countries. The results highlight that while Central and Eastern Europeans share the same individual determinants of happiness as people in the West (despite some significant cross-country variation), macroeconomic and institutional differences are the key factors behind the lack of convergence in life satisfaction. On the macroeconomic side, GDP growth is still a source of increasing well-being, but the happiness bonus associated with it is becoming smaller. The different levels of individual happiness in CEE are therefore mostly determined by institutional factors such as corruption, government spending and decentralisation, making policies aimed at enhancing institutional quality capable of bringing about substantial improvements in the overall life satisfaction of the people in the region.
    Keywords: Happiness; Convergence; Easterlin paradox; Institutions; Corruption; Decentralisation; Central and Eastern Europe
    Date: 2011–11–10
  9. By: Jan Fagerberg (Centre for Technology, Innovation and Culture, University of Oslo); Maryann Feldman (University of North Carolina, Chapel Hill); Martin Srholec (CERGE-EI, Charles University and Economics Institute of the Academy of Sciences of the Czech Republic)
    Abstract: This paper analyzes factors that shape the technological capabilities of individual U.S. states and European countries, which are arguably comparable policy units. The analysis demonstrates convergence in technological capabilities from 2000 to 2007. The results indicate that social capabilities, such as a highly educated labor force, an egalitarian distribution of income, a participatory democracy and prevalence of public safety, condition the growth of technological capability. The analysis also considers other aspects of territorial dynamics, such as the possible effects of spatial agglomeration, urbanization economies, and differences in industrial specialization and knowledge spillovers from neighboring regions.
    Keywords: innovation, technological capabilities, European Union, United States
    Date: 2011–11
  10. By: Kågeson, Per (KTH)
    Abstract: This paper was prepared as a contribution to the Working Group on Ships of the European Union's European Climate Change Programme (ECCP) and presented on 22–23 June 2011 at the second meeting of the group. It discusses various options that may be considered by the EU when contemplating, in the absence of any progress in the International Maritime Organzation (IMO), to act unilaterally on market-based measures for curbing CO2 emissions from international shipping. Focus is, in particular, on the pros and cons of introducing a hybrid scheme where emissions from domestic shipping and other small vessels (below a certain size threshold) are addressed by up-stream allocation of liability, i.e. with the fuel suppliers, while a down-stream allocation of responsibility would apply to large ships and to journeys departing from ports outside of the EU. For the latter, the ship owner would be directly responsible for submission on emission allowances or, alternatively, for paying a CO2 charge or levy.
    Keywords: Shipping emissions; IMO; climate change; ECCP
    JEL: Q53 R48
    Date: 2011–11–16
  11. By: Marta Rodrigues Monteiro (Faculdade de Economia, Universidade do Porto); Elísio Fernando Moreira Brandão (Faculdade de Economia, Universidade do Porto); Francisco Vitorino da Silva Martins (Faculdade de Economia, Universidade do Porto)
    Abstract: This paper studies the economic determinants of corporate tax revenue to Gross Domestic Product (GDP) across European Union members over the period 1998-2009. The Feasible Generalized Least Squares (FGLS) regression results suggest that structural, cyclical, international and institutional factors such as GDP, Government Deficit, Industry Turnover, Unemployment, Number of Enterprises, Trade Openness, Foreign Direct Investment (FDI) and Corruption affect revenue performance of an economy. Thus, the findings show that Unemployment Rate and Corruption have an adverse effect on tax collection, while the other analysed factors contribute to a better performance concerning tax collection. In the present paper we also consider as explanatory factors the tax variables Effective Average Tax Rate (EATR) and Effective Marginal Tax Rate (EMTR). In fact, empirical results indicate a parabolic relationship between EMTR and corporate tax revenues, reinforcing the hypothesis of the existence of a Laffer curve. Our findings also suggest that the last two years of European Union enlargement are likely not to have had effect in corporate tax revenue to GDP. In addition, specific factors of some countries (Greece, Portugal and Spain) seem to positively affect corporate revenues.
    Keywords: Corporate Tax Revenue, EATR, EMTR, Corruption, Laffer Curve
    JEL: H25 H26
    Date: 2011–11
  12. By: Antonio Accetturo (Bank of Italy); Luigi Infante (Bank of Italy)
    Abstract: Activity and employment rates for immigrant women in many industrialized countries display a great variability across national groups. The aim of this paper is to assess whether this well-known fact is due to a voluntary decision (i.e. large reservation wages by the immigrants) or to an involuntary process in that the labour market evaluation of their skills is low. This is done by estimating the reservation wages for each individual in the dataset. Our results show that low activity and employment rates for certain national groups are not associated with high reservation wages. This implies that low participation should not be interpreted as a voluntary decision.
    Keywords: Reservation wages, female labour supply, cross-national differences
    JEL: J22 J61 J15
    Date: 2011–07
  13. By: Andersson, Lina (Linnaeus University); Hammarstedt, Mats (Linnaeus University); Hussain, Shakir (University of Birmingham); Shukur, Ghazi (Jönköping International Business School & Linnaeus University)
    Abstract: We investigate the importance of ethnic origin and local labour markets conditions for self-employment propensities in Sweden. In line with previous research we find differences in the self-employment rate between different immigrant groups as well as between different immigrant cohorts. We use a multilevel regression approach in order to quantify the role of ethnic background, point of time for immigration and local market conditions in order to further understand differences in self-employment rates between different ethnic groups. We arrive at the following: The self-employment decision is to a major extent guided by factors unobservable in register data. Such factors might be i.e. individual entrepreneurial ability and access to financial capital. The individual’s ethnic background and point of time for immigration play a smaller role for the self-employment decision but are more important than local labour market conditions.
    Keywords: Self-employment; immigrant background; local labour market
    JEL: J15 R23
    Date: 2011–11–11
  14. By: Bauer, Thomas (RWI); Grave, Barbara S. (RWI)
    Abstract: German universities are regarded as being under-financed, inefficient, and performing below average if compared to universities in other European countries and the US. Starting in the 1990s, several German federal states implemented reforms to improve this situation. An important part of these reforms has been the introduction of indicator-based funding systems. These financing systems aimed at increasing the competition between universities by making their pubic funds dependent on their relative performance concerning different output measures, such as the share of students obtaining a degree or the amount of third party funds. This paper evaluates whether the indicator-based funding created unintended incentives, i.e. whether the reform caused grade inflation. Estimating mean as well as quantile treatment effects, we cannot support the hypothesis that increased competition between universities causes grade inflation.
    Keywords: grade inflation, higher education funding, university competition
    JEL: H52 I21 I22
    Date: 2011–10
  15. By: Emanuela Ciapanna (Banca d'Italia); Concetta Rondinelli (Banca d'Italia)
    Abstract: We conduct a regional analysis of the relationship between market concentration and price dynamics in the grocery retail sector, focusing on a sample of five categories of goods belonging to the 12 COICOP aggregation and on a panel of countries that includes Germany, Spain, Finland, Italy, Austria and Portugal. Using a unique census-type dataset on retailers, we construct Herfindahl-Hirschman indices of concentration at the buying group, parent company and individual shop level for a sample of 118,540 large grocery stores and we study the association between these measures and regional price changes. Our results point to a positive association between retail market concentration and price growth in food and beverages, alcohol and tobacco and miscellaneous goods in the time span 2003-2010 at the buying, parental group and store level for the pooled sample of countries. The relation reverses sign for clothing and footwear and household equipment. This evidence is robust to different specifications of concentration indices.
    Keywords: Market concentration, price dynamics, buying group, parent company, regional Herfindahl-Hirschman indices.
    JEL: L1 L4 L8 E31
    Date: 2011–10
  16. By: Ippoliti, Roberto
    Abstract: The target of this work is to support the thesis that pharmaceutical companies' testing phase would be treated like any other form of production in a globalization process, that is to say, a specific phase of pharmaceutical R&D could be localized where the cost of clinical evidence is lower. Considering Europe, an empirical analysis in order to support the main hypothesis is performed. Taking trials of phases II and III, funded by Industry (dependent variable) and the main macroeconomic features (independent variables) of each nation into account, the empirical work is implemented via regression analysis on panel data (2000 - 2007). The sample analyzed considers EU-27 plus the candidate states (Croatia, the Former Yugoslav Republic of Macedonia, Turkey), Norway, Switzerland and Iceland. Results suggest the appropriateness of this process since clinical research is clearly affected by economic conditions, regardless of the scientific purpose.
    Keywords: Pharmaceutical Company R&D; Human experimentation; Medical Researcher; Research Subject;
    JEL: I11
    Date: 2011–11
  17. By: S. Balia ;
    Abstract: This work aims to assess risk perception of smokers in reporting survival expectations and subjective health. In particular, the analysis investigates individuals’ perception of smoking effects in the short and long-term and whether they believe that such detrimental effects can be reversed. Data from the Survey of Health, Ageing and Retirement in Europe, which contain a numerical measure of subjective survival probability, are used to estimate a simultaneous recursive system of equations for survival expectation, subjective health and smoking. Endogeneity and unobservable heterogeneity are addressed using a finite mixture model. This approach identifies two types of individuals that differ in level of optimism, risk perception and rationality in addiction. One important result is that for both types past smokers perceive smoking consequences as reversible, with some difference between the short and long-term. We also find evidence of differences among current and past smokers in the way they evaluate the opportunity cost of tobacco consumption.
    Keywords: survival expectations; subjective health; risk; smoking; EM algorithm
    JEL: I12 C0 C30 C41
    Date: 2011–09
  18. By: Lindahl, Lena (Swedish Institute for Social Research, Stockholm University)
    Abstract: Many countries have had to tackle escalating youth unemployment in the aftermath of the financial crisis of 2008, but compared with other countries in the European Union, youth unemployment has increased particularly sharply in Sweden. Currently, Swedish 20-24 year olds are more than three times as likely to be unemployed than are adult workers, which is the greatest such ratio within the EU-15. The bulk of youth unemployment spells starts directly after upper secondary school ends, which in turn suggests special attention should be directed to the interaction of vocational education and labor markets. This paper discusses in the light of international research findings how to ease the transition from school into the labor market for vocational students. The evidence discussed in the paper centers on which educational structures lead to good labor market outcomes for vocational students and especially what we know about the relative merits of workplace- and school-based education and the role of employer contacts.
    Keywords: -
    Date: 2011–11–15
  19. By: Charlotte Cabane (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I)
    Abstract: In this study I use the German Socio-Economic Panel to evaluate the impact of leisure sport participation on the unemployment duration. The empirical literature on sport participation has focused on labour market outcomes and job quality while the impact of this activity on job search has not been studied. However, sports participation fosters socialization which, through the networking effect, accelerates the exit from unemployment. Furthermore, there may be a selection effect of individuals with higher non-cognitive skills (which may optimize their job search). These hypotheses are tested using a duration model, taking into account unobservable heterogeneity. Because the timing of participation in sports activities is relevant, various measure of sport participation are tested as well as other activities.
    Keywords: Unemployment duration, non-cognitive skills, sport.
    Date: 2011–08
  20. By: Jaromir Cekota (United Nations Economic Commission for Europe); Claudia Trentini (United Nations Economic Commission for Europe)
    Abstract: This paper investigates the educational attainment, labour market participation and living conditions of young Roma adults in Bulgaria, Hungary and Romania based on data from the generations and gender surveys and other sources of information. It shows that in spite of a small improvement in the educational attainment of young Roma in comparison to the generation of their parents, the educational achievement and employment gaps have increased considerably during the post-communist period. The paper also compares living conditions of the Roma with other population groups. It concludes with a discussion of policy challenges.
    Keywords: minorities, Roma, discrimination, employment, education, transition
    JEL: I31 J15 J71
    Date: 2011–09

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