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on Microeconomic European Issues |
| By: | Benjamin Elsner (Trinity College Dublin, Department of Economics and IIIS) |
| 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: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2011.76&r=eur |
| By: | Benno Torgler (The School of Economics and Finance, Queensland University of Technology, research fellows of CREMA – Center for Research in Economics, Management and the Arts, Switzerland and associated with CESifo) |
| Abstract: | The paper reports on work values in Europe. At the country level we find that job satisfaction is related to lower working hours, higher well-being, and a higher GDP per capita. Moving to the micro level, we turn our attention from job satisfaction to analyse empirically work centrality and work value dimensions (without exploring empirically job satisfaction) related to intrinsic and extrinsic values, power and social elements. The results indicate substantial differences between Eastern and Western Europe. Socio-demographic factors, education, income, religiosity and religious denomination are significant influences. We find additional differences between Eastern and Western Europe regarding work-leisure and work-family centrality that could be driven by institutional conditions. Furthermore, hierarchical cluster analyses report further levels of dissimilarity among European countries. |
| Keywords: | Work Values, Job Satisfaction, Work-Leisure Relationship, Work-Family Centrality, Eastern Europe, Western Europe |
| JEL: | P20 D10 J28 J17 J22 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2011.94&r=eur |
| By: | Francesca Ponenti (Department of Quantitative Methods, University of Brescia); Giorgia Oggioni (Department of Quantitative Methods, University of Brescia,); Elisabetta Allevi (Department of Quantitative Methods, University of Brescia,); Giacomo Marangoni (Fondazione Eni Enrico Mattei) |
| Abstract: | In this paper we investigate the economic impacts of the European Emission Trading Scheme (EU-ETS) on the Italian electricity market by a power generation expansion model. In particular, we assume that generators make their capacity expansion decisions in a Cournot or in a perfect competition manner. This model is used to measure the effects of the EU-ETS Directives on electricity prices and demand, investments and generators' profits both in an oligopolistic and in a perfectly competitive organization of the power market. We adopt a technological representation of the energy market which is discretized into six geographical zones (North, Center-North, Center-South, South, Sicily, Sardinia) and five virtual poles (Monfalcone, Foggia, Brindisi, Rossano, Priolo) with limited production for a total of eleven zones. We assume that generators operate in different zones connected by interconnections with limited capacity and produce energy by running existing or new plants in which they directly invest. We consider several investment scenarios under the CO2 regulation with and without incentives to renewables. The scenarios also include simulations on future effects of the third EU-ETS phase on the system. Our analysis shows that perfect competition induces generators to invest more than in an oligopolistic framework, but in both market configurations, investments are mainly concentrated in fossil-red plants (CCGT and coal), leaving a small proportion to new wind plants. This happens also in presence of incentives given to renewable technologies. We can thus conclude that investments in a secure and efficient technology like CCGT are preferable compared to those in renewables that cannot be used with continuity. This investment policy affects electricity prices that significantly increase in 2020 compared to their 2009 levels. The raise of electricity prices in 2020 is particularly favorable for generators operating as Cournot players which are able to increase their profits compared to 2009, despite the full auctioning system foreseen for the allocation of CO2 allowance to the power sector in the third EU-ETS phase. The solution of the overall system is found by exploiting the mixed complementarity theoretical framework and solution algorithms. The developed model is implemented as complementarity problems and solved in GAMS using the PATH solver. |
| Keywords: | Complementarity Conditions, General Equilibrium Models, EU-ETS, Italian Electricity Market |
| JEL: | Q4 Q48 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2011.99&r=eur |
| By: | Adamos Adamou (University of Cyprus); Sofronis Clerides (University of Cyprus and CEPR); Theodoros Zachariadis (Cyprus University of Technology) |
| Abstract: | Vehicle taxation based on CO2 emissions is increasingly being adopted worldwide in order to shift consumer purchases to low-carbon cars, yet little is known about the effectiveness and overall economic impact of these schemes. We focus on feebate schemes, which impose a fee on high-carbon vehicles and give a rebate to purchasers of low-carbon automobiles. e estimate a discrete choice model of demand for automobiles in Germany and simulate the impact of alternative feebate schemes on emissions, consumer welfare, public revenues and firm profits. The analysis shows that a well-designed scheme can lead to emission reductions without reducing overall welfare. |
| Keywords: | CO2 emissions, German Automobile Market, Feebates, Carbon Taxation |
| JEL: | Q5 Q53 Q58 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2011.96&r=eur |
| By: | Patrick Criqui (LEPII - Laboratoire d'Économie de la Production et de l'Intégration Internationale - CNRS : FRE3389 - Université Pierre Mendès-France - Grenoble II); Silvana Mima (LEPII - Laboratoire d'Économie de la Production et de l'Intégration Internationale - CNRS : FRE3389 - Université Pierre Mendès-France - Grenoble II) |
| Abstract: | In this research, we provide an overview of the climate-security nexus in the European energy sector, through a model based analysis of scenarios produced with the POLES model. The scenarios describe the consequences of different degrees of GHG emission constraint, at world level, but also for a case where Europe adopts an ambitious climate policy, while the rest of the world sticks to much more modest abatement policies. The analysis shows that under such stringent climate policies, Europe may benefit of a significant double dividend, first in its capacity to develop a new cleaner and climate-friendlier energy model, and second in a lower vulnerability to potential price or supply shocks on the international energy markets. |
| Keywords: | climate policy ; scenarios ; energy security |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-00661043&r=eur |
| By: | Pierluigi Montalbano (Department of Economics, University of Sussex and Sapienza University); Silvia Nenci (University of Roma Tre) |
| Abstract: | The goal of this paper is to provide an "ex ante" assessment of the long-run "treatment" effect of ENP on EU-MED Free Trade Area. Supplementary objectives are the presentation of new up-to-date "in-sample" estimates of the actual trade potential in the Pan-european Common Market as well as more robust estimates of the trade enhancing impact of EU deep integration policy. The novel aspect of this work is twofold: i) to present nonparametric matching estimators along with gravity estimates; ii) to assume, as a counterfactual (i.e., the hypothetical situation of ENP full implementation), the ex-post long-run average treatment effect of the Europe Agreements, which are the unique experience to date of "full partnership without membership". Our empirical outcomes show a likely strong and robust impact on EU-MED trade integration of the new "deep integration" efforts made by the EU. This is confirmed by both the applied dummy strategy and the non parametric matching technique. This result seems to be linked to other factors than simply trade preferences alone. Our empirical evidence is relevant both to policymaking, since it provides an "ex ante" assessment of the efficacy of deep integration under the EU-MED regional cooperation framework, and to the methodological point of view, since it contributes to improvements in empirical estimates of the "policy impact" of EU preferential agreements. |
| Keywords: | Trade policy, European integration, Gravity Model, Matching econometrics, Southern Mediterranean Countries |
| JEL: | F13 F15 F17 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:sus:susewp:3112&r=eur |
| By: | Timo Baas (Institute for Employment Research (IAB) and Free University of Berlin); Herbert Brücker (University of Bamberg, Institute for Employment Research (IAB) and IZA) |
| Abstract: | This paper examines the macroeconomic consequences of the diversion of migration flows away from Germany towards the UK in the course of the EU’s Eastern Enlargement. The EU has agreed transitional periods for the free movement of workers with the new member states from Central and Eastern Europe. The selective application of migration restrictions during the transitional periods has resulted in a reversal of the pre-enlargement allocation of migration flows from the new member states across the EU. Based on a forecast of the migration potential under the conditions of free movement and of the transitional arrangements, we employ a CGE model with imperfect labour markets to analyse the macroeconomic effects of this diversion process. We find that EU Eastern enlargement has increased in the GDP per capita in the UK substantially, but that the diversion of migration flows towards the UK has reduced wage gains and the decline in unemployment there. The effects of the EU Eastern enlargement are less favourable for Germany, but the diversion of migration flows has protected workers there against a detrimental impact on wages and unemployment. |
| Keywords: | EU Eastern enlargement, international migration, computable equilibrium model, wage-setting. |
| JEL: | F15 F22 C68 J61 J30 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:nor:wpaper:2012010&r=eur |
| By: | Giulia Arduino (Dipartimento di Economia e Metodi Quantitativi, Università degli Studi di Genova); David G. Carrillo Murillo (Institut für Wirtschaftspolitik und Wirtschaftsforschung, Karslruhe Institute of Technology (KIT)); David G. Claudio Ferrari (Dipartimento di Economia e Metodi Quantitativi, Università degli Studi di Genova) |
| Abstract: | The first cases of successful implementation of cold ironing can be found in Alaska about twenty years ago. In that case, the energy cost was lower than in Europe where cold ironing has been developed only in the latest years at few ports. The present paper investigates the innovative process of cold ironing at European level. Firstly, its recent development in Europe is documented as well as the main concern of its corresponding legislation. Then, the adoption of this initiative by the “green ports” concept is discussed. Secondly, the technical barriers, such as lack of standardization of electricity parameters are mentioned. And given that port electrical infrastructure needed onshore represents a huge investment that not all ports are financially able to do, the financial problematic is treated explicitly taking into account the cost of energy at ports (directly provided by electric centrals or converted) against the energy cost onboard. Finally, conclusions are drawn covering the main barriers confronted by this technology and the future premises of cold ironing at European ports considering the social and environmental benefits in terms of air and noise pollution. |
| Keywords: | cold ironing, energy cost, technology barrier, European ports, environmenta |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:sit:wpaper:11_15&r=eur |
| By: | Dwenger, Nadja; Rattenhuber, Pia; Steiner, Viktor |
| Abstract: | This study assesses the burden of capital income tax passed onto labor through wage bargaining over economic rents, using estimations based on a unique pseudo-panel data set from Germany for the period 1998 to 2006. Tax return data cover the universe of corporations subject to corporate income tax, and labor market variables reflect the full record of employees covered by Social Security. We find that wage bargaining after a reduction in tax rates does not increase the wage bill if employment effects neglected by previous empirical studies are taken into account. Any increase in the total wage bill by higher wage rates set is equally compensated for by lower levels of employment. If adjustments in employment due to the increased user cost of capital are taken into account, a cut in corporate income taxes by 1 euro increases the wage bill by 0.47 euro. The identification of these effects comes from variation in the firm-specific average corporate tax rate across firms and over time resulting from two substantial tax reforms. The endogeneity of the firmspecific tax rate is controlled for by an instrumental variable approach. The instrument for the observed average tax rate is the counterfactual tax rate that a corporation would have faced in a particular period, had there been no endogenous change of its tax base, constructed using a detailed microsimulation model. -- |
| Keywords: | tax incidence,wage determination,corporate income taxation,corporate tax return data |
| JEL: | H22 H25 J21 J31 H32 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:fubsbe:201119&r=eur |
| By: | Bojnec, Štefan |
| Abstract: | The paper provides an overview and a comparison of land markets covering the three candidate countries for European Union membership: Croatia, the Former Yugoslav Republic (FYR) of Macedonia and Turkey. We analyse and compare agricultural land structures and factors driving land markets. The analyses are based on the available cross-section and time-series evidence on agricultural land structures and land productivity (yields). The land productivity measured by production per hectare of agricultural land varies between the three countries. Agricultural land structures are the result of historical evolution in land markets and land-leasing developments with additional different institutional environments and agrarian and land reforms. |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:eps:fmwppr:96&r=eur |
| By: | Elena Verdolini (Fondazione Eni Enrico Mattei); Nick Johnstone (OECD Environment Directorate); Ivan Hašcic (OECD Environment Directorate) |
| Abstract: | This paper provides an empirical analysis of the determinants of energy efficiency in fossil fuel electricity generation across 28 OECD countries over the period 1981-2006, with particular attention to the role played by technological development and the availability of energy efficient technologies in the market. This contribution is novel in three respects: first, empirically assess the effects of different determinants of energy efficiency, which include the input mix in electricity generation, the capacity ratio at which power plants are run, as well as the characteristics of the production technology. Second, we focus on the role of technological availability: using patent data for carefully selected innovations in fossil-fuel technologies, we build an indicator which proxies for technological developments in fuel-efficient electricity generation. Third, by formalizing the relationship between fuel efficiency and carbon intensity, we assess the impact of changes in the input mix and in technological availability on CO2 emissions in the electricity sector. Results show that input mix, capacity utilization and new investment in capacity play a significant role in increasing energy efficiency. Increasing the stock of available technologies (or stock of knowledge) is also associated with higher efficiency levels. Given the link between increased efficiency and lower CO2 emissions, we conclude that technological change has a negative and significant effect on carbon intensity, while the changing input mix affects CO2 intensity both through an increase in efficiency as well as by lowering the input-weighted emission factor. |
| Keywords: | Fossil Fuel Electricity Generation, Energy Efficiency, Carbon Intensity, Technological Change, Patents |
| JEL: | Q40 O33 O13 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2011.92&r=eur |
| By: | Noël, P.; Findlater, S.; Chyong, C. K. |
| Abstract: | The Baltic States (Estonia, Latvia and Lithuania) are three amongst the smallest gas markets in Europe. They import all the gas they consume from Russia, with whom they have difficult political relationships. A disruption of their supply from Russia, whatever the cause, would have severe consequences as a large share of their peak winter consumption could not be replaced by alternative gas or other fuels. The three governments want to invest in improving gas supply security and the European Commission pushes in the same direction. But what should they do? We present an assessment of the cost of various national and regional options – dual-fuel for heat plants and CHPs; strategic gas storage; strategic LNG terminals – to increase gas supply security. The cost is calculated over thirty years for different scenarios of supply disruptions. Uncertainty in commodity prices and interest rates is taken into account through Monte Carlo simulations. We draw the policy conclusions, taking into account the regional political context. |
| JEL: | O13 P28 Q48 |
| Date: | 2012–01–23 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:1204&r=eur |
| By: | Boissin, Romain |
| Abstract: | Long run returns of IPO firms’ recommendations in Europe reveal possible conflicts of interest and pressures faced by financial analysts over the 1991-2005 period. Nevertheless, recent European legislations about investment research have led to better long run performance of IPO firms’ recommendations issued by affiliated analysts over the 2001-2005 period. Findings reveal that market participants do not fully incorporate the perceived value of recommendations. Indeed, difference between affiliated and unaffiliated analysts’ recommendations is statistically significant over one, three or five year horizon. The timing of recommendations specifies that investors pay more attention to affiliated analysts’ recommendations made later in the aftermarket. This result could suggest that the later is the recommendation made in the IPO aftermarket the weaker is the pressure faced by affiliated analysts. |
| Keywords: | Initial Public Offering; conflicts of interest; financial analysts; long run performance |
| JEL: | G14 G24 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:36057&r=eur |
| By: | Bach, Stefan; Corneo, Giacomo; Steiner, Viktor |
| Abstract: | This paper provides formulas for optimal top marginal tax rates when couples are taxed according to income splitting between spouses, consumption is taxed, and the skill distribution is unbounded. Optimal top marginal income tax rates are computed for Germany using a dataset that includes the tax returns of all German top taxpayers. We find that the optimal top marginal tax rate converges to about 2/3 and convergence obtains at income levels that are substantially higher than those currently subject to the actual top tax rate. -- |
| Keywords: | optimal income taxation,top incomes,German income tax |
| JEL: | D31 D72 H23 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:fubsbe:201121&r=eur |
| By: | Humburg Martin; Grip Andries de; Velden Rolf van der (ROA rm) |
| Abstract: | This paper explores the relationship between graduates’ skill levels and the risk ofovereducation and unemployment in 17 European countries. We distinguish betweenfield-specific and general skills and between two labour market segments, theoccupational domain of a particular field of study and the labour market segmentwhich requires general skills. In line with the predictions of the crowding out hypothesis,we find that the level of protection afforded by field-specific skills against the risk ofovereducation increases with the degree of excess labour supply in the occupationaldomain of the graduate’s field of study. Conversely, general skills offer more protectionagainst the risk of overeducation when excess labour supply in the labour marketsegment which requires general skills is higher. Field-specific skills also protect graduatesagainst the risk of unemployment, whereas graduates’ level of general skills appears tobe unrelated to the risk of becoming unemployed. |
| Keywords: | education, training and the labour market; |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:umaror:2012001&r=eur |
| By: | Ciaian, Pavel; Pokrivcak, Jan |
| Abstract: | In this paper we estimate the impact of subsidies from the EU’s common agricultural policy on farm bank loans. According to the theoretical results, if subsidies are paid at the beginning of the growing season they may reduce bank loans, whereas if they are paid at the end of the season they increase bank loans, but these results are conditional on whether farms are credit constrained and on the relative cost of internal and external financing. In the empirical analysis, we use farm-level panel data from the Farm Accountancy Data Network to test the theoretical predictions for the period 1995–2007. We employ fixed-effects and generalised method of moment models to estimate the impact of subsidies on farm loans. The results suggest that subsidies influence farm loans and the effects tend to be non-linear and indirect. The results also indicate that both coupled and decoupled subsidies stimulate long-term loans, but the long-term loans of large farms increase more than those of small farms, owing to decoupled subsidies. Furthermore, the results imply that short-term loans are affected only by decoupled subsidies, and they are altered by decoupled subsidies more for small farms than for large farms; however, when controlling for endogeneity, only the decoupled payments affect loans and the relationship is non-linear. |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:eps:fmwppr:100&r=eur |
| By: | Bartels, Charlotte |
| Abstract: | Welfare states redistribute both between individuals (inter-individual redistribution) reducing annual, cross-sectional inequality and over the lifecycle of an individual (intra-individual redistribution) insuring individuals against income risks in the long-term. But studies measuring redistribution often focus on a one-year period and the second aspect is neglected. To quantify both inter- and intra-individual redistribution in Germany this study uses SOEP data from 1984 to 2009 to construct long-term incomes over a 20-year period. Results show that annual, cross-sectional inequality is higher than inequality in the long-run, but the effect of redistribution is also larger annually than in the long-term. Depending on age the distributional focus of the German welfare state differs. When persons are young, state intervention reduces income differences between individuals mainly through the progressive tax system. Getting older and reaching retirement age income-smoothing redistribution via social security pensions becomes central. -- |
| Keywords: | long-term income inequality,income redistribution,social security |
| JEL: | D31 D63 H53 H55 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:fubsbe:201125&r=eur |
| By: | Michael Fritsch (School of Economics and Business Administration, Friedrich-Schiller-University Jena); Alexander Kritikos (German Institute for Economic Research (DIW Berlin), University of Potsdam, IZA Bonn, and o IAB, Nuremberg); Alina Rusakova (School of Economics and Business Administration, Friedrich-Schiller-University Jena) |
| Abstract: | Based on representative data, the German Micro-Census, we provide an overview of the development of self-employment and entrepreneurship in Germany between 1991 and 2011, the first two decades after reunification. We investigate the socio-economic background of these individuals, their education, previous employment status, and their income level. We observe a unique increase in self-employment in Germany by 40 percent which can partly be attributed to the transformation process of East Germany and to the shift to the service sector. We notice a yearly start-up rate of 1 percent among the working population (almost 20 percent of them being re-starters), a decision that pays for the majority of individuals in terms of income. Contrary to other countries, in Germany there is a positive relationship between educational levels and the probability of starting a business. |
| Keywords: | Entrepreneurship, Self-Employment, Start-ups, Germany |
| JEL: | L26 D22 |
| Date: | 2012–01–23 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2012-001&r=eur |
| By: | Sara Lemos |
| Abstract: | Using the underexplored, sizeable and long Lifetime Labour Market Database (LLMDB) we estimated the immigrant-native earnings gap across the entire earnings distribution, across continents of nationality and across cohorts of arrival in the UK between 1978 and 2006. We exploited the longitudinal nature of our data to separate the effect of observed and unobserved individual characteristics on earnings. This helped us to prevent selectivity biases such as cohort bias and survivor bias, which have been long standing unresolved identification issues in the literature. In keeping with the limited existing UK literature, we found a clear and wide dividing line between whites and non-whites in simple comparable models. However, in our more complete models we found a much narrower and subtler dividing line. This confirms the importance of accounting for unobservable individual characteristics, which is an important contribution of this paper. It also suggests that the labour market primarily rewards individual characteristics other than immigration status. We also found that the lowest paid immigrants, whom are disproportionately non-white, suffer an earnings penalty in the labour market, whereas higher paid immigrants, whom are disproportionately white, do not. Finally, we found less favourable earning gaps for cohorts that witnessed proportionately larger non-white and lower paid white immigration. |
| Keywords: | Immigration; wages; earnings; earnings-gap; UK |
| JEL: | J24 J31 J61 J71 J82 F22 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:lec:leecon:11/38&r=eur |
| By: | Tânia Cristina Simões de Matos dos Santos (Instituto Politécnico de Leiria); Inmaculada Domínguez Fabián (Universidad de Extremadura) |
| Abstract: | The Portuguese Pension System is submitted to two risks. Over the period 2005-2050, a decrease of the workforce and an increase of old-age persons are eminent, which provide a doubling of the dependency rate. So, the system is not financially sustainable in the medium and long terms and it is expected that the system will enter in a growing deficit in 2015, when expenditures will overcome the revenues. Hence, the system is subject to a demographic risk (associated with the reduction of the fertility rates, the augmentation of the life expectancy and the increase of the dependency rate) and to a financial insolvency risk (motivated by the lack of equatorial correspondence between expenditures and revenues). Immigration could be a solution to the unsustainability of the pension systems. This paper examines the role of the immigration on resolving these two risks. We investigate, based on the European Economy (2006) projections about the impact of ageing on the public expenditure for the period 2005-50, the required immigrant flows that maintain the old-age dependency rate observed in 2004, and we calculate also the number of immigrants required to promote a null financial result for the Portuguese Pension System. We conclude that the number of immigrants that guarantees a null financial result is much lower than one that eliminates the demographic risk. Compared with the European Economy forecasts (2006), the number of immigrants required to guarantee the solvency of the Portuguese pension system is substantially higher and show an upward trend during the period under review contrary to the expected trend announced by that European entity. |
| Keywords: | Portuguese Pension System, immigration, dependency rate, demographic risk, financial insolvency risk, ageing population |
| JEL: | M0 M1 |
| Date: | 2012–01–20 |
| URL: | http://d.repec.org/n?u=RePEc:pil:wpaper:84&r=eur |