nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2012‒01‒25
twenty papers chosen by
Giuseppe Marotta
University of Modena and Reggio Emilia

  1. The role of higher education stratification in the reproduction of social inequality in the labour market. A comparative study of recent European graduates By Triventi, Moris
  2. Migration and Regional Convergence in the European Union By Peter Huber; Gabriele Tondl
  3. Temporal and spatial analysis of social inequalities: An innovative method to grasp social inequalities evolution on the territory By LORD Sébastien; GERBER Philippe; SOHN Christophe; EGGERICKX Thierry; HERMIA Jean-Pierre; KESTELOOT Christian
  4. The European Emission Trading Scheme and environmental innovation diffusion: Empirical analyses using Italian CIS data By Giulio Cainelli; Massimiliano Mazzanti; Simone Borghesi
  5. Augmenting migration statistics with expert knowledge By Arkadiusz Wisniowski; Nico Keilman; Jakub Bijak; Solveig Christiansen; Jonathan J. Forster; Peter W.F Smith; James Raymer
  6. The Labor Market Effects of Immigration and Emigration in OECD Countries By Docquier, Frédéric; Ozden, Caglar; Peri, Giovanni
  7. Do Europe's Minimum Income Schemes Provide Adequate Shelter against the Economic Crisis and How, If at All, Have Governments Responded? By Marchal, Sarah; Marx, Ive; Van Mechelen, Natascha
  8. Wage Mobility in East and West Germany By Riphahn, Regina T.; Schnitzlein, Daniel D.
  9. Pitfalls of Immigrant Inclusion into the European Welfare State By Kahanec, Martin; Kim, Anna Myunghee; Zimmermann, Klaus F.
  10. Integrated Modelling of European Migration: Background, specification and results By James Raymer; Jonathan J. Forster; Peter W.F Smith; Jakub Bijak; Arkadiusz Wiśniowski
  11. Access to finance for innovation: the role of venture capital and the stock market By Francesco Bogliacino; Matteo Lucchese
  12. Intangible resources: the relevance of training for European firms’ innovative performance By Daria Ciriaci
  13. "Productivity and innovation spillovers: Micro evidence from Spain" By Esther Goya; Esther Vayá; Jordi Suriñach
  14. Goods Follow Bytes: The Impact of ICT on EU Trade By Anselm Mattes; Philipp Meinen; Ferdinand Pavel
  15. The European Research Framework Programme and innovation performance of companies. An empirical impact assessment using a CDM model By Abraham Garcia
  16. Civic engagement and corruption in 20 European democracies By Grießhaber, Nicolas; Geys, Benny
  17. Childhood circumstances and adult outcomes: Evidence from SHARELIFE By Enkelejda Havari; Franco Peracchi
  18. Multidimensional Well-being at the Top: Evidence for Germany By Andreas Peichl; Nico Pestel
  19. Reforming the labor market and improving competitiveness: An analysis for Spain using FiMod By Schwarzmüller, Tim; Stähler, Nikolai
  20. Job creation in business services: innovation, demand, polarisation By Francesco Bogliacino; Matteo Lucchese; Mario Pianta

  1. By: Triventi, Moris
    Abstract: This paper analyses the role of institutional stratification within higher education (course length, fields of study and institutional quality) in mediating the relationship between social origin and labour market outcomes (wage and occupational status) in a comparative perspective. In the first part, we develop our theoretical framework, relying on sociological and economic theories and knowledge on countries’ institutional profiles. In the second part, we use data from the 2005 REFLEX survey on European graduates (2000) from 4 countries (Germany, Norway, Italy, and Spain). Results from binomial logistic regression models and the Karlson-Holm-Breen decomposition method indicate that those with tertiary educated parents have higher probabilities of entering in a highly rewarded occupation and this ‘effect’ varies according to level higher education expansion and strength of the institutional mechanisms which connect tertiary education with labour market. Furthermore, higher education stratification contributes to the reproduction on inequality but with a different importance according to the institutional context.
    Keywords: higher education; occupational outcomes; social inequality; institutional stratification
    JEL: J31 A23 J01 A2
    Date: 2011
  2. By: Peter Huber (WIFO); Gabriele Tondl
    Abstract: We offer an empirical, econometric analysis of the impact of migration on the EU 27's NUTS-2 regions in the period 2000-2007. While our results indicate that migration had no statistical impact on regional unemployment in the EU it had a significant impact on both per-capita GDP and productivity. The coefficients suggest that a 1 percent increase in immigration to immigration regions increased per-capita GDP by about 0.02 percent and productivity by about 0.03 percent. For emigration regions a 1 percent increase in the emigration rate leads to a reduction of 0.03 percent in per-capita GDP and 0.02 percent in productivity. Since immigration regions are also often regions with above-average GDP and productivity while emigration regions in Europe practically all have below-average GDP, migration seems to induce divergence rather than convergence.
    Keywords: Migration, Convergence, Unemployment
    Date: 2012–01–18
  3. By: LORD Sébastien; GERBER Philippe; SOHN Christophe; EGGERICKX Thierry; HERMIA Jean-Pierre; KESTELOOT Christian
    Abstract: This paper puts forward a methodology to rank the population along a hierarchical continuum, from a lower level to a higher level of social precariousness. Going beyond the complex layered issues related to the concept of poverty, it rather explores the notion of deprivation with the idea of social inequalities which are observable according to specific socio-economic key dimensions. Part of a broader research – Destiny – focusing on both the spatial and the temporal evolutions of social inequalities in Belgium and Luxembourg, this method represents a first phase of the project. The social inequalities are addressed in an individual perspective with disaggregated data. This standpoint allowed the analysis of the whole population for Belgium and Luxembourg in a ten-year period (1991 and 2001). The method is based, on the one hand, on the national censuses from both countries – the only comprehensive data available on an individual basis –, and on the second hand, on the European Union - Study on Income and Living Conditions Panel (EU-SILC). These two data sources have been combined for accessing economic information from EU-SILC and transposed into the national censuses in both countries. The EU-SILC detailed data on household income were used as an indicator of social inequalities for three dimensions: education, socio-professional status and housing. This enabled to rank each individual on a ‘social continuum’. After a presentation of the methodological framework, individual ranking results are exposed and discussed on the basis of spatial analysis.
    Keywords: Social inequality; Spatial inequality; Methodology; Census; Luxembourg; Belgium
    JEL: J11 J21 J80 R10 R20
    Date: 2011–10
  4. By: Giulio Cainelli; Massimiliano Mazzanti; Simone Borghesi
    Abstract: We study the driving forces behind the adoption of environmental innovations (EI) in the Italian economy over 2006-2008 through empirical analyses of the new wave of Community Innovation Survey (CIS) data that covered environmental innovation adoptions in different realms (energy, carbon, production, consumption, etc..). Given the shortage of studies that have empirically assessed the innovation effects of ETS at micro econometric level, we investigate whether the first phase of EU ETS (started in 2005-2006) has exerted some effects on environmental innovations. We then include in a typical probit innovation function some policy stringency indicators, for the ETS sectors, to verify whether the likelihood of adopting environmental innovations is stimulated among other factors by the ETS lever. We test a wide and comprehensive set of potential drivers, including internal factors (R&D), external (to the firm) factors (cooperation, networking), international drivers (foreign related relationships), and mostly important, the dynamic incentives to innovation eventually provided by the ETS implementation. Estimates show that external forces and complementarity with other management practices are particularly relevant to increase the adoption of relatively new and radical technologies: relationships with other firms and institutions, local public funding, group membership are the key factors in this sense. Training is also positively related to EI, confirming recent evidence. The role of ETS on EI seems instead to be weak, but it turns out to be significant for energy efficiency innovations and for consumption level/good related reductions of atmospheric and water emissions.
    Keywords: environmental innovation; industrial sectors; ETS; innovation drivers; CIS data
    JEL: C21 L2 O33 Q38 Q55
    Date: 2012–01–12
  5. By: Arkadiusz Wisniowski (University of Southampton); Nico Keilman (University of Oslo); Jakub Bijak (University of Southampton); Solveig Christiansen (University of Oslo); Jonathan J. Forster (University of Southampton); Peter W.F Smith (University of Southampton); James Raymer (University of Southampton)
    Abstract: International migration statistics vary considerably from one country to another in terms of measurement, quality and coverage. Furthermore, immigration tend to be captured more accurately than emigration. In this paper, we first describe the need to augment reported flows of international migration with knowledge gained from experts on the measurement of migration statistics, obtained from a multi-stage Delphi survey. Second, we present our methodology for translating this information into prior distributions for input into the Integrated Modelling of European Migration (IMEM) model, which is designed to estimate migration flows amongst countries in the European Union (EU) and European Free Trade Association (EFTA), by using recent data collected by Eurostat and other national and international institutions. The IMEM model is capable of providing a synthetic data base with measures of uncertainty for international migration flows and other model parameters.
    Date: 2012–01
  6. By: Docquier, Frédéric (Université catholique de Louvain); Ozden, Caglar (World Bank); Peri, Giovanni (University of California, Davis)
    Abstract: In this paper, we simulate the labor market effects of net immigration and emigration during the 1990's in all OECD countries. To accomplish this, we are the first to employ a comprehensive database of migrant stocks, grouped by education level and country of origin/destination, for the years 1990 and 2000. Due to the much higher international mobility of college graduates, relative to all other individuals, we find that net migration flows are college-intensive, relative to the population of non-migrants. Using the consensus aggregate model of labor demand and supply we simulate the long-run employment and wage effects of immigration and emigration. We use a range of parameter values spanning most of the estimates in the literature. In all cases we find that immigration had a positive effect on the wage of less educated natives. It also increased or left the average native wages unchanged and had a positive or no effect on native employment. To the contrary, emigration had a negative effect on the wage of less educated native workers and it contributed to increase within country inequality in all OECD countries. These results still hold true when we correct for the estimates of undocumented immigrants, for the skill-downgrading of immigrants, when we focus on immigration from non-OECD countries, and when we consider preliminary measures of more recent immigration flows for the period 2000-2007.
    Keywords: immigration and emigration, complementarity, schooling externalities, average wage, wage inequality
    JEL: F22 J61 J31
    Date: 2011–12
  7. By: Marchal, Sarah (University of Antwerp); Marx, Ive (University of Antwerp); Van Mechelen, Natascha (University of Antwerp)
    Abstract: The present economic crisis comes against the background of decades of policy changes that have generally weakened the capacity of social safety nets to offer citizens with adequate resources for financial survival when labour markets fail to do so. Building on data for 24 European Union countries, this paper asks whether EU governments implemented additional measures during the first phase of the crisis to improve safety nets. Our data, drawn from a large network of national experts, show that many countries introduced supportive measures, in particular in the form of additional increases in gross minimum income benefits. More generous child benefits have also helped to increase net disposable incomes of families on minimum income. Behavioral requirements imposed on minimum income recipients have been neither tightened nor relaxed. In a limited number of countries, activation efforts aimed at minimum income recipients have been intensified. Despite some improvements, social safety nets in Europe remain far below widely accepted poverty thresholds, including the EU's own official measure.
    Keywords: crisis measures, poverty, minimum incomes, social policy, Europe
    JEL: I38 H75 H12
    Date: 2011–12
  8. By: Riphahn, Regina T. (University of Erlangen-Nuremberg); Schnitzlein, Daniel D. (DIW Berlin)
    Abstract: This article studies the long run patterns and explanations of wage mobility as a characteristic of regional labor markets. Using German administrative data we describe wage mobility since 1975 in West and since 1992 in East Germany. Wage mobility declined substantially in East Germany in the 1990s and moderately in East and West Germany since the late 1990s. Therefore, wage mobility does not balance recent increases in cross-sectional wage inequality. We apply RIF (recentered influence function) regression based decompositions to measure the role of potential explanatory factors behind these mobility changes. Increasing job stability is an important factor associated with the East German mobility decline.
    Keywords: wage mobility, earnings mobility, income mobility, Germany, East Germany, inequality, transition matrix, Shorrocks index, administrative data
    JEL: J30 J31 J60 D63
    Date: 2011–12
  9. By: Kahanec, Martin (Central European University, Budapest); Kim, Anna Myunghee (IZA); Zimmermann, Klaus F. (IZA and University of Bonn)
    Abstract: This paper's main purpose is to gauge immigrants' demand for social assistance and services and identify the key barriers to social and labor market inclusion of immigrants in the European Union. The data from an online primary survey of experts from organizations working on immigrant integration in the EU is analyzed using simple comparative statistical methods; the robustness of the results is tested by means of Logit and ordered Logit statistical models. We find that the general public in Europe has rather negative attitudes towards immigrants. Although the business community views immigrants somewhat less negatively, barriers to immigrant labor market inclusion identified include language and human capital gaps, a lack of recognition of foreign qualifications, discrimination, intransparent labor markets and institutional barriers such as legal restrictions for foreign citizens. Exclusion from higher education, housing and the services of the financial sector aggravate these barriers. Changes in the areas of salaried employment, education, social insurance, mobility and attitudes are seen as most desired by members of ethnic minorities. The current economic downturn is believed to have increased the importance of active inclusion policies, especially in the areas of employment and education. These results appear to be robust with respect to a number of characteristics of respondents and their organizations.
    Keywords: ethnic minorities, migration, labor market integration, economic crisis, enlarged European Union, welfare state
    JEL: J15 J71 J78
    Date: 2011–12
  10. By: James Raymer (University of Southampton); Jonathan J. Forster (University of Southampton); Peter W.F Smith (University of Southampton); Jakub Bijak (University of Southampton); Arkadiusz Wiśniowski (University of Southampton)
    Abstract: The aims of this paper are to present the background and specification of the Integrated Modelling of European Migration (IMEM) model. Currently, international migration data are collected by individual countries with separate collection systems and designs. This creates problems when attempting to understand or predict population movements between countries as the reported data are inconsistent in terms of their availability, definitions and quality. Rather than wait for countries to harmonise their migration data collection and reporting systems, we propose a model to overcome the limitations of the various data sources. In particular, we propose a Bayesian model for harmonising and correcting the inadequacies in the available data and for estimating the completely missing flows. The focus is on estimating recent international migration flows amongst countries in the European Union (EU) and European Free Trade Association (EFTA) from 2002 to 2008, using data collected by Eurostat and other national and international institutions. We also include additional information provided by experts on the effects of undercount, measurement and accuracy. The methodology is integrated and capable of providing a synthetic data base with measures of uncertainty for international migration flows and other model parameters.
    Date: 2012–01
  11. By: Francesco Bogliacino (JRC-IPTS); Matteo Lucchese (University of Urbino)
    Abstract: Financial constraints for young and small firms can prevent them from supporting innovation and employment creation. We analyze two of the various institutional mechanisms which have been proposed to circumvent it: the development of venture capital market and the stock market access. We will use the information provided by two Scoreboards - used to monitor innovative activity in Europe: the Innovation Union Scoreboard and the R&D Scoreboard. With the first, we study the determinants of the venture capital/GDP intensity in Europe. With the second, we try to assess the contribution of stock market to R&D investment. In the first part, we show that venture capital market complements structural feature such as R&D intensity and market capitalization, is more volatile and seems not affected by anticompetitive regulations. In the second part, we show that unlisted SMEs are more research intensive.
    Keywords: Venture Capital, R&D, European Policy, Random Effect, Propensity Score Matching.
    JEL: M13 O31 O38
    Date: 2011–11
  12. By: Daria Ciriaci (JRC-IPTS)
    Abstract: This paper assesses whether European firms’ innovative performance is impacted by investments in training directly aimed at developing and/or introducing innovation, in addition to the scale of a firm's investments in innovation proxied by the number of R&D personnels. In particular, it explores the complementarity between these two factors (in the presence of a well-trained workforce, the knowledge created by a firm’s R&D personnel can be better exploited), and their dependence on a firm's knowledge intensity (high versus low % of tertiary-educated workforce) and size (SMEs versus large firms). Using European CIS non-anonymised data for the period 1998-2000, this paper estimates a system of simultaneous equations in which investments in training and stock of R&D personnel are treated as endogenous in relation to the innovative sales on which they are presumed to have an effect. The choice to use this time period rather than more recent ones – to which I had access at the Eurostat Safe Centre – is data-driven. It has better information on training expenditures and it is the last period to provide firm-level information on the number of employees with tertiary education. Unlike the majority of CIS-based studies, the main variables of interest are continuous ones, while dummy variables are used as controls only. Empirical evidence confirms most previous results – investment in training and stock of R&D personnel positively affects firms' innovativeness – but also provides some important additional insights. Ceteris paribus, returns to training and R&D personnel are not affected by the knowledge intensity of the firm, while are always statistically significantly higher in large than in small and medium sized firms. However, while in the case of training the differences in returns between SME and large firms are small, in the case of R&D personnel are quite pronounced.
    Keywords: Intangibles, R&D investment, human capital, CIS, CDM model
    JEL: O30 O31 O32 D83 D62
    Date: 2011–12
  13. By: Esther Goya (Faculty of Economics, University of Barcelona); Esther Vayá (Faculty of Economics, University of Barcelona); Jordi Suriñach (Faculty of Economics, University of Barcelona)
    Abstract: This article analyses the impact that innovation expenditure and intrasectoral and intersectoral externalities have on productivity in Spanish firms. While there is an extensive literature analysing the relationship between innovation and productivity, in this particular area there are far fewer studies that examine the importance of sectoral externalities, especially with the focus on Spain. One novelty of the study, which covers the industrial and service sectors, is that we also consider jointly the technology level of the sector in which the firm operates and the firm size. The database used is the Technological Innovation Panel (PITEC), which includes 12,813 firms for the year 2008 and has been little used in this type of study. The estimation method used is Iteratively Reweighted Least Squares method (IRLS), which is very useful for obtaining robust estimations in the presence of outliers. The results confirm that innovation has a positive effect on productivity, especially in high-tech and large firms. The impact of externalities is more heterogeneous because, while intrasectoral externalities have a positive and significant effect, especially in low-tech firms independently of size, intersectoral externalities have a more ambiguous effect, being clearly significant for advanced industries in which size has a positive effect..
    Keywords: Productivity, innovation, sectoral externalities, firm size. JEL classification:D24, O33
    Date: 2011–12
  14. By: Anselm Mattes; Philipp Meinen; Ferdinand Pavel
    Abstract: This paper empirically assesses whether the deployment and use of Information and Communication Technology (ICT) infrastructure at the national level affects trade flows within the European Union (EU) and between the EU and its main trading partners. The analysis tests the hypothesis that availability and use of ICT enhances trade by reducing transaction costs and through network effects that materialize when both trading partners are advanced users of ICT. The empirical analysis is based on the application of gravity equations in various robust specifications. The results suggest that ICT does have a significant impact on EU trade. In particular, we find trade to be enhanced if both trading partners reveal advanced ICT endowments, which supports the expected network effects. Additionally, we observe trade diversion effects from less to highly ICT developed countries.
    Keywords: Exports, ICT, gravity model, international trade, network effects
    JEL: F1 D2
    Date: 2012
  15. By: Abraham Garcia (JRC-IPTS)
    Abstract: The effect of the EU Research Framework Programme (FP) on European company innovation performance is analysed for the period 1998-2000. The possibility of applying for the grant might make companies engage in new projects which they would not have considered if the fund was not there. In addition, the FP programme increases collaboration with other innovation agents (e.g., universities, research labs, governments and other firms). Both the existence of FP and collaboration are simultaneously modelled when innovation performance is studied. To measure innovation performance, an input indicator (level of R&D expenditure) is used in combination with an output indicator (increase in the innovation sales). Following Crepon et al. (1998) a simultaneous equations system is used with four equations (FP, collaboration, R&D and Innovation sales). The paper finds a positive impact for the FP on collaboration, and both factors positively affect the innovation performance (R&D and Innovation sales) of European firms. No crowding-out effect is found in the analysis.
    Keywords: Funding, Framework Programme, R&D investment, CIS, CDM model
    Date: 2011–12
  16. By: Grießhaber, Nicolas; Geys, Benny
    Abstract: This paper analyzes the relation between different forms of civic engagement and corruption. This first of all extends earlier analysis linking generalized trust to corruption by incorporating another element from the social capital complex (namely formal forms of civic engagement). Second, based on the idea that social networks' beneficial or harmful impact may depend on their characteristics, it investigates how the structure of social networks (i.e., inclusive vs. exclusive and isolated vs. connected) matters. Evaluating the engagement - corruption nexus for a cross-section of 20 European democracies in 2002/2003, we confirm that social networks are linked to corruption even when controlling for the effect of generalized trust, and that their relation to corruption is typespecific. These findings survive under various model specifications and robustness checks. --
    Keywords: Corruption,civil society,networks,voluntary associations,European social survey
    Date: 2011
  17. By: Enkelejda Havari (Tor Vergata University); Franco Peracchi (Tor Vergata University and EIEF)
    Abstract: This paper looks at the association between adverse circumstances in childhood and adult outcomes. We concentrate on the cohorts born between 1930 and 1954 in 13 European countries, and exploit the huge variation in the timing, nature and intensity of events related to World War II and the immediate postwar period. We combine the available historical information with micro-level data from the third wave of the Survey of Health Ageing and Retirement in Europe (SHARE), which provides detailed retrospective information on life histories from childhood to adulthood for people born before 1955. We find that those who experienced war-related episodes of financial hardship and hunger in childhood have lower educational attainment and worse health in adulthood (but not lower income), relative to those who never suffered these experiences, and especially relative to those born after 1950. On the other hand, we find no evidence of a negative effect of living in childhood in a region interested by major war operations.
    Date: 2011
  18. By: Andreas Peichl; Nico Pestel
    Abstract: This paper employs a multidimensional approach for the measurement of well-being at the top of the distribution using German SOEP micro data. Besides income as traditional indicator for material well-being, we include health as a proxy for nonmaterial quality of life as well as self-reported satisfaction with life as dimensions. We find that one third of the German population is well-off in at least one dimension but only one percent in all three dimensions simultaneously. While the distribution of income has become more concentrated at the top, the concentration at the top of the multidimensional well-being distribution has decreased over time. Moreover, health as well as life satisfaction contribute quite substantially to multidimensional wellbeing at the top which has important policy implications.
    Keywords: Multidimensional measurement, well-being, Germany
    JEL: D31 D63 I31
    Date: 2011
  19. By: Schwarzmüller, Tim; Stähler, Nikolai
    Abstract: This paper uses an extended version of 'FiMod - A DSGE Model for Fiscal Policy Simulations' (Stähler and Thomas, 2011) with endogenous job destruction decisions by private firms to analyze the effects of several currently discussed labor market reforms on the Spanish economy. The main focus is on the firms' hiring and firing decisions, on the implications for fiscal balances and on Spain's international competitiveness. We find that measures aiming at reducing (policy-induced) outside option of workers, such as a decrease in unemployment benefits, public wages or, to a lesser extent, public-sector employment, seem most beneficial to foster output, employment, international competitiveness and fiscal balances. Decreasing the unions' bargaining power also accomplishes this task, however, at a lower level and at the cost of higher job turnover. Our simulation suggests that reforming employment protection legislation does not seem to be a suitable tool from the perspective of improving international competitiveness. All measures imply (income) redistribution between optimizing and liquidity-constrained consumers. Our analysis also suggests that those reforms that are beneficial for Spain generate positive spillovers to the rest of EMU, too. --
    Keywords: general equilibrium,fiscal policy simulations,labor market search
    JEL: E24 E32 E62 H20 H50
    Date: 2011
  20. By: Francesco Bogliacino (JRC-IPTS); Matteo Lucchese (University of Urbino); Mario Pianta (University of Urbino)
    Abstract: The patterns and mechanisms of job creation in business services are investigated in this article by considering the role of innovation, demand, wages and the composition of employment by professional groups. A model is developed and an empirical test is carried out with parallel analyses on a group of selected business services, on other services and on manufacturing sectors, considering six major European countries over the period 1996-2007. Within technological activities, a distinction is made between those supporting either technological competitiveness, or cost competitiveness. Demand variables allow identifying the special role of intermediate demand. Job creation in business services appears to be driven by efforts to expand technological competitiveness and by the fast growing intermediate demand coming from other industries; conversely, process innovation leads to job losses and wage growth has a negative effect that is lower than in other industries. Business services show an increasingly polarised employment structure.
    Keywords: Business Services, Innovation, Employment.
    JEL: J20 J23 O30 O33
    Date: 2011–08

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