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on Microeconomic European Issues |
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Issue of 2012‒01‒10
sixteen papers chosen by Giuseppe Marotta University of Modena and Reggio Emilia |
| By: | Oberhofer, Harald (University of Salzburg); Stöckl, Matthias (University of Salzburg); Winner, Hannes (University of Salzburg) |
| Abstract: | We provide evidence on the impact of globalization on labor market outcomes analyzing pay differences between foreign-acquired and domestically-owned firms. For this purpose, we use firm level data from 16 European countries over the time period 1999 to 2006. Applying propensity score matching techniques we estimate positive wage premia of cross-boarder merger and acquisitions (M&As), suggesting that foreign acquired firms exhibit higher short-run (post-acquisition) wages than their domestic counterparts. The observed wage disparities are most pronounced for low paying firms (with average wages below the median). Finally, we find systematic wage premia in Western European countries, but not so in Eastern Europe. |
| Keywords: | Globalization; mergers and acquisitions; wage effects; propensity score matching |
| JEL: | C21 F15 G34 J31 |
| Date: | 2012–01–03 |
| URL: | http://d.repec.org/n?u=RePEc:ris:sbgwpe:2012_001&r=eur |
| By: | Paulus, Moritz (Energiewirtschaftliches Institut an der Universitaet zu Koeln); Grave, Katharina (Energiewirtschaftliches Institut an der Universitaet zu Koeln); Lindenberger, Dietmar (Energiewirtschaftliches Institut an der Universitaet zu Koeln) |
| Abstract: | In this paper, we develop a methodology for deriving a consistent measure for supply adequacy in the power generation sector. We especially consider the secured generation capacity of intermittent renewable energy sources such as wind. <p> Availability of conventional power plants is estimated through stochastic convolution of unscheduled non-usabilities. We employ our methodology to measure supply security in Germany until 2030. A detailed market analysis of power plants that are currently being built or planned provides support to our analysis for the short term. <p> For the long term, we rely on a large-scale dispatch and investment model of the European power sector to account for the embedding of the German electricity sector in the European market. We analyze two scenarios: one with prolongation of nuclear power plants and one with a nuclear phase-out. <p> Our results show that, even though intermittent renewables only provide very limited secured generation capacity, security of electricity supply in Germany can be assured until 2015. In the long term, the need for backup capacity for renewable energy sources increases as well as the need for electricity imports. |
| Keywords: | Supply adequacy; integration of renewable energy sources; power generation; German power sector; secured generation capacity |
| JEL: | C61 L94 Q21 Q40 |
| Date: | 2011–12–28 |
| URL: | http://d.repec.org/n?u=RePEc:ris:ewikln:2011_010&r=eur |
| By: | Guven, Cahit (Deakin University); Lee, Wang-Sheng (RMIT University) |
| Abstract: | Previous research has found that height is correlated with cognitive functioning at older ages. It therefore makes sense to ask a related question: do people from countries where the average person is relatively tall have superior cognitive abilities on average? Using data from the Survey of Health, Ageing, and Retirement in Europe (SHARE), we find empirical evidence that this is the case, even after controlling for self-reported childhood health, self-reported childhood abilities, parental characteristics and education. We find that people from countries with relatively tall people, such as Denmark and the Netherlands, have on average superior cognitive abilities compared to people from countries with relatively shorter people, such as Italy and Spain. We exploit variations in height trends due to nutritional deprivation in World War II in Europe and use an instrumental variable analysis to further estimate the potential impact of height on cognitive function. We find some suggestive evidence that a causal link from height to cognitive outcomes could be operating via nutrition and not via educational attainment. |
| Keywords: | height, cognitive function, instrumental variables, World War II |
| JEL: | C21 J24 N3 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6210&r=eur |
| By: | Krautzberger, Lisann (Energiewirtschaftliches Institut an der Universitaet zu Koeln); Wetzel, Heike (Energiewirtschaftliches Institut an der Universitaet zu Koeln) |
| Abstract: | In the last decades transport activities persistently increased in the EU27 and were strongly coupled to growth in GDP. Like most production processes, they are inevitably linked with the generation of environmentally hazardous by-products, such as CO2 emissions. This leads to the question of how to promote a sustainable transport sector that meets both environmental protection targets and economic requirements. In this context, the objective of this paper is to compare the CO2-sensitve productivity development of the European commercial transport industry for the period between 1995 and 2006. We calculate a Malmquist-Luenberger productivity index to investigate the effects of country-specific regulations on productivity and to identify innovative countries. Our results show a high variation in the CO2-sensitive productivity development and a slight productivity decrease on average. Efficiency losses indicate that the majority of the countries were not able to follow the technological improvements induced by some innovative countries. |
| Keywords: | European transport industry; Carbon dioxide emissions; Productivity growth; Malmquist-Luenberger index |
| JEL: | L92 Q47 Q53 Q56 |
| Date: | 2012–01–02 |
| URL: | http://d.repec.org/n?u=RePEc:ris:ewikln:2011_013&r=eur |
| By: | Frédéric Dobruszkes |
| Abstract: | Increasingly air transport growth raises the question of its impact on the environment. Public authorities and researchers are relying more and more on high-speed trains (HSTs), whose efficiency is supposed to lead to a modal shift from airplanes. However, most transport studies focus on the evolution of demand rather than supply, although it is basically the latter that determines environmental damage. In light of this fact, this paper aims to compare the overall dynamics in the supply of air transport in Europe compared to the HST supply and to examine empirically five city-pairs. The development of high-speed rail remains limited compared to the increase of air services. For a given city-pair, the decline in the number of flights depends on various conditions, including length of the HST journey and the strategies adopted by the airlines. Some carriers reduce their supply in terms of the number of seats but increase the number of flights in order to compete more effectively with the HSTs. Moreover, the competition between low-cost airlines and HSTs should be kept in mind and re-examined in a few years. |
| Keywords: | High-speed train; High-speed rail; Air transport; Intermodal comp |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ulb:ulbeco:2013/96164&r=eur |
| By: | Waltraud Schelkle |
| Abstract: | Many European countries have embraced the choice agenda in welfare arrangements with a view of improving efficiency and/or quality. The motivations range from legitimising public welfare and administrative modernisation, to electoral politics and cost containment. Our research project included case studies on education, long-term care and public employment services which are very different in terms of stakeholders, fiscal relevance and the role of the European Union in enhancing choice within social and welfare institutions. The overall aim of the research project was to explore the possibility that rather than presenting a challenge to solidaristic welfare citizenship, the introduction of choice may in the longer term safeguard the public provision of services by providing the basis for a new political consensus. If so, this would be good news for Europe’s nascent polity and emerging social union. This paper presents the research design for three case studies and presents the findings of the case study on the reform of public employment services coordinated in and influenced by European integration processes. |
| Keywords: | social policy; welfare state |
| Date: | 2011–12–15 |
| URL: | http://d.repec.org/n?u=RePEc:erp:reconx:p0111&r=eur |
| By: | Blom, Martin; Castellacci, Fulvio; Fevolden, Arne |
| Abstract: | The paper presents an agent-based simulation model of the defence industry. The model resembles some of the key characteristics of the European defence sector, and studies how firms in this market will respond to the challenges and opportunities provided by a higher degree of openness and liberalization in the future. The simulation analysis points out that European defence firms will progressively become more efficient, less dependent on public procurement and innovation policy support, and more prone to knowledge sharing and inter-firm collaborations. This firm-level dynamics will in the long-run lead to an increase in the industry’s export propensity and a less concentrated market. |
| Keywords: | Defence industry; liberalization; EU; export; innovation; agent-based simulation model |
| JEL: | C6 F5 M2 F1 O3 L1 |
| Date: | 2012–01–03 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:35702&r=eur |
| By: | Carlsson, Magnus (Linnaeus University); Rooth, Dan-Olof (Linnaeus University) |
| Abstract: | Ethnic minorities have lower wages compared to the ethnic majority in most EU-countries. However, to what extent these wage gaps are the result of prejudice toward ethnic minority workers is virtually unknown. This study sets out to examine what role prejudice play in the creation of the ethnic wage gap in one of Europe's most egalitarian countries, Sweden. The analysis takes into account the important distinction between average employer attitudes and the attitude of the marginal employer. Our results confirm that the attitudes of the marginal employer – but not those of the average employer – are important for the ethnic wage gap. This relationship becomes even stronger when potential measurement error and other forms of endogeneity are accounted for by controlling for a rich set of variables and implementing instrumental variable techniques. |
| Keywords: | attitudes, prejudice, marginal employer, ethnic wage gap |
| JEL: | J64 J71 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6227&r=eur |
| By: | Tomas Silva (Office for Strategy and Studies, Portuguese Ministry of Economy); Sergio Lagoa (Department of Political Economy, ISCTE - University Institute of Lisbon) |
| Abstract: | European countries are facing an ever-increasing competition for Foreign Direct Investment (FDI). This paper studies how corporate taxes affect the location of FDI in Europe. Firm-level data is used to estimate a conditional logit model. We start by analysing the impact of the level and volatility of three different tax rates on FDI. Next, we analyse how economic and monetary integration influences the effect of taxes on FDI. The interaction between taxes and the upward and downward cycles of FDI is also analysed. Finally, we focus on how the impact of taxes depends on project characteristics. We conclude that taxes play a significant role in attracting FDI, but the issues analysed imply that there are some nuances in this relation, many of them relevant for policy makers. |
| Keywords: | FDI, Location, Taxes, Conditional Logit Model |
| JEL: | F21 H25 H32 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:mde:wpaper:0044&r=eur |
| By: | Pedersen, Peder J. (University of Aarhus) |
| Abstract: | The purpose in this paper is to summarize existing evidence on welfare dependence among immigrants in Denmark and to supply new evidence with focus on the most recent years. Focus is on immigrants from non-western countries. The paper contains an overview of the background regarding immigration in recent decades followed by a survey of relevant benefit programmes in the Danish welfare state. Existing studies focus on both macro analyses of the overall impact from immigration on the public sector budget and on micro oriented studies with focus on specific welfare programs. Existing studies focus on the importance for welfare dependence of demographic variables, on the big variation between countries of origin and on the importance of cyclical factors at time of entry and during the first years in the new country. Evidence from the most recent years reinforce the importance of aggregate low unemployment in contrast to fairly small effects found from policy changes intending to influence the economic incentives between welfare and a job for immigrants. |
| Keywords: | immigration, general welfare programs, effects of welfare programs |
| JEL: | H53 I38 J61 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6220&r=eur |
| By: | Aiello, Francesco; Pupo, Valeria; Ricotta, Fernand |
| Abstract: | This study considers how firms’ internal variables and regional factors affect the total factor productivity of Italian manufacturing firms. Due to of the hierarchical structure of data in estimation, we employ a multilevel model. Results, which refer to 2006, show the importance of firm-specific determinants of TFP, but at the same time confirm the role of regional context in explaining the gap in TFP levels which exist between the South and the North of Italy. In this respect, we show that northern firms are localised in regions with adequate endowment of infrastructure, with efficient public administration and with high R&D intensity and, as a result of these factors, perform better than firms operating in less well endowed regions. |
| Keywords: | Manufacturing Firms; Total Factor Productivity; Italian Regional Divide; Multilevel Models |
| JEL: | R11 O14 L60 |
| Date: | 2011–12–30 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:35656&r=eur |
| By: | Caliendo, Marco (University of Potsdam); Künn, Steffen (IZA); Schmidl, Ricarda (IZA) |
| Abstract: | A substantial number of young unemployed participate in active labor market programs (ALMP) in Germany each year. While the aims of these programs are clear – a fast re-integration into employment or enrollment in further education – a comprehensive analysis of their effectiveness has yet to be conducted. We fill this gap using administrative data on youth unemployment entries in 2002 and analyze the short- and long-term impacts for a variety of different programs. With informative data at hand we apply inverse probability weighting, thereby accounting for a dynamic treatment assignment and cyclical availability of programs. Our results indicate positive long-term employment effects for nearly all measures aimed at labor market integration. Measures aimed at integrating youths in apprenticeships are effective in terms of education participation, but fail to show any impact on employment outcomes until the end of our observation period. Public sector job creation is found to be harmful for the medium-term employment prospects and ineffective in the long-run. Our analysis further indicates that the targeting of German ALMP systematically ignores low-educated youths as neediest of labor market groups. While no employment program shows a positive impact on further education participation for any subgroup, the employment impact of participation is often significantly lower for low-educated youths. |
| Keywords: | youth unemployment, active labor market policy, program evaluation, propensity score weighting |
| JEL: | J64 J68 J13 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6222&r=eur |
| By: | Fürsch, Michaela (Energiewirtschaftliches Institut an der Universitaet zu Koeln); Lindenberger, Dietmar (Energiewirtschaftliches Institut an der Universitaet zu Koeln); Malischek, Raimund (Energiewirtschaftliches Institut an der Universitaet zu Koeln); Nagl, Stephan (Energiewirtschaftliches Institut an der Universitaet zu Koeln); Panke, Timo (Energiewirtschaftliches Institut an der Universitaet zu Koeln); Trüby, Johannes (Energiewirtschaftliches Institut an der Universitaet zu Koeln) |
| Abstract: | In the aftermath of the nuclear catastrophe in Fukushima, German nuclear policy has been reconsidered. This paper demonstrates the economic effects of an accelerated nuclear phase-out on the German electricity generation sector. <p> A detailed optimization model for European electricity markets is used to analyze two scenarios with different lifetimes for nuclear plants (phase-out vs. prolongation). Based on political targets, both scenarios assume significant electricity demand reductions and a high share of generation from renewable energy sources in Germany. Our principal findings are: First, nuclear capacities are mainly replaced by longer lifetimes of existing coal-fired plants and the construction of new gas-fired plants. Second, fossil fuel-based generation and power imports increase, while power exports are reduced in response to the lower nuclear generation. Third, despite the increased fossil generation, challenging climate protection goals can still be achieved within the framework of the considered scenarios. Finally, system costs and electricity prices are clearly higher. <p> We conclude that the generation sector can generally cope with an accelerated nuclear phase-out under the given assumptions. Yet, we emphasize that such a policy requires a substantial and costly transformation of the supply and the demand side. |
| Keywords: | Nuclear policy; climate protection; renewable energy; electricity market modeling |
| JEL: | C61 L94 Q48 Q58 |
| Date: | 2011–12–28 |
| URL: | http://d.repec.org/n?u=RePEc:ris:ewikln:2011_012&r=eur |
| By: | S Bradley; Jim Taylor |
| Abstract: | This paper investigates the extent to which exam performance at the end of compulsory education has been affected by three major education reforms: the introduction of a quasi-market following the Education Reform Act (1988); the specialist schools initiative introduced in 1994; and the Excellence in Cities programme introduced in 1999. We use data for all state-funded secondary schools in England over the period 1992-2006. The empirical analysis, which is based on the application of panel data methods, indicates that the government and its agencies have substantially overestimated the benefits flowing from these three major reforms. Only about one-third of the improvement in GCSE exam scores during 1992-2006 is directly attributable to the combined effect of the education reforms. The distributional consequences of the policy, however, are estimated to have been favourable, with the greatest gains being achieved by schools with the highest proportion of pupils from poor families. But there is evidence that resources have not been allocated efficiently. |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:lan:wpaper:936&r=eur |
| By: | Giorgio Di Pietro (University of Westminster & IZA); Toni Mora (Universitat Internacional de Catalunya & IEB) |
| Abstract: | Using Labour Force Survey individual-level data recently released by the Italian Institute of Statistics (ISTAT) where information is for the first time at available at provincial level, this paper looks at the short-term effects of the L’Aquila earthquake on labour market outcomes. Our estimates are based on a difference-in-differences (DiD) strategy that compares residents of L’Aquila with residents of a control area before and after the earthquake. The empirical results suggest that while the earthquake had no significant effect on the employment-population ratio, it led to a modest, but significant, reduction in labour force participation. There is also evidence of significant heterogeneous effects by gender and level of education. |
| Keywords: | Disaster, labour force participation, employment-population ratio, difference-in-differences |
| JEL: | J21 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ieb:wpaper:2011/12/doc2011-41&r=eur |
| By: | S Bradley; Jim Taylor; G Migali |
| Abstract: | We evaluate the effect on test scores of a UK education reform which has increased <br/>funding of schools and encouraged their specialisation in particular subject areas, enhancing pupil choice and competition between schools. Using several data sets, we apply cross-sectional and difference-in-differences matching models, to confront issues of the choice of an appropriate control group and different forms of selection bias. We demonstrate a statistically significant causal effect of the specialist schools policy on test score outcomes. The duration of specialisation matters, and we consistently find that the longer a school has been specialist the larger is the impact on test scores. We finally disentangle the funding effect from a specialisation effect, and the latter occurs yielding relatively large improvements in test scores in particular subjects. |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:lan:wpaper:928&r=eur |