|
on Microeconomic European Issues |
| By: | Ibrahim Ahamada (Centre d'Economie de la Sorbonne - Paris School of Economics); Djamel Kirat (Centre d'Economie de la Sorbonne - Paris School of Economics) |
| Abstract: | This paper addresses the economic impact of the European Union Emission Trading Scheme (EU ETS) for carbon on wholesale electricity prices in France and Germany during the Kyoto commitment period (2008-2012). Specifically, we use first identify a structural break occurred on the carbon spot price series on October 2008, which is mainly resulting from the financial and economic crisis. Then, we model the prices of day-ahead electricity contracts. We look at the volatilities around their fundamentals and simultaneously evaluate the correlation between electricity prices in both countries. We find that the price of carbon does not matter for electricity prices in either countries before October 2008. After October 2008, electricity producers in both countries were constrained to include the carbon price in their cost functions. During that period, French electricity producers were more constrained than their German counterparts. Comparing the results with those reported in Kirat and Ahamada (2011) reveals improvements in the response of electricity generation sector to carbon constraints. The impact of carbon constraint increased significantly by 300% and 150% in France and Germany, respectively, between the pilot phase and the second phase of the EU ETS. This is a consequence of the possibility of "banking" for subsequent periods and the reduction of allowance caps introduced in the second phase. We also find evidence of a trade off between gas and coal in electricity generation in Germany. Furthermore, the conditional correlation of electricity prices in both countries is highly significant and greater than during the pilot phase of the EU ETS. |
| Keywords: | Carbon emission trading, multivariate GARCH models, structural breaks, energy prices. |
| JEL: | C32 C51 Q49 Q58 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:mse:cesdoc:12007&r=eur |
| By: | Izabela Styczynska (Marcinkowska) |
| Abstract: | In recent years, population ageing has attracted the attention of research and policy advisors in all European countries. Several policy actions have been directed toward ensuring optimal long-term care (LTC) for elderly people while maintaining fiscal rationality. LTC systems are very different across all European countries. Their design is characterized by diverse arrangements for the provision of care/organization and financing. Despite general concerns, the Polish LTC system is still at the bottom of the pile in terms of the organization and provision of care. |
| Keywords: | LTC system,Labor market, social policy and social services, Europe, long-term care |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:sec:ebrief:1205&r=eur |
| By: | Berthoud, Richard |
| Abstract: | How should relative poverty be defined and measured in a European Union where there are substantial variations in income between countries, as well as within countries? This paper uses objective and subjective deprivation indicators to assess the appropriate balance between national and Europe-wide relativities in explaining social exclusion. The analysis suggests that Europe-wide comparisons are more important to the perception of poverty than the convention of national relative poverty lines would have led us to expect. Even relative poverty is more prevalent in the new low-income (eastern) countries than in the old high-income (western) countries. But this is as much a political as an empirical issue. |
| Date: | 2012–01–31 |
| URL: | http://d.repec.org/n?u=RePEc:ese:iserwp:2012-02&r=eur |
| By: | Ciaian, Pavel,; Kancs, d’Artis; Swinnen, Jo; Van Herck, Kristine; Vranken, Liesbet |
| Abstract: | In this paper, we describe recent developments in the rental market for agricultural land in selected EU member states and candidate countries. The analysis focuses on the importance of the rental market as well as on the evolution of rental prices. It appears that the share of rented land in the total utilised agricultural area varies considerably among member states. In the old member states, the share of rented land ranges between 18% in Ireland and 74% in France, while in the new member states (NMS) it ranges from 17% in Romania to 89% in Slovakia. For the former, different strategies to provide tenure security to tenants can explain differences in the importance of rental markets. Changes in the significance of land rental have also reflected changes in institutions and in economic and political conditions. In the NMS, diverse approaches to land reform have resulted in assorted ownership structures and hence in differences in the share of rented land. Regarding rental prices, governments impose price restrictions on agricultural land rents in some countries, such that large divergences are observed in rental prices between and within member states. |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:eps:fmwppr:115&r=eur |
| By: | Ernest Miguélez (Economics and Statistics Division, World Intellectual Property Organization and Faculty of Economics, University of Barcelona); Rorina Moreno (Faculty of Economics, University of Barcelona) |
| Abstract: | The aim of the present paper is to identify the determinants of the geographical mobility of skilled individuals, such as inventors, across European regions. Their mobility contributes to the geographical diffusion of knowledge and reshapes the geography of talent. We test whether geography, amenities, job opportunities and social proximity between inventors’ communities, and the so-called National System of Innovation, drive in- and out-flows of inventors between pairs of regions. We use a control function approach to address the endogenous nature of social proximity, and zero-inflated negative binomial models to accommodate our estimations to the count nature of the dependent variable and the high number of zeros it contains. Our results highlight the importance of physical proximity in driving the mobility patterns of inventors. However, job opportunities, social and institutional relations, and technological and cultural proximity also play key roles in mediating this phenomenon. |
| Keywords: | inventors’ mobility, gravity model, amenities, job opportunities, social and institutional proximities, zero-inflated negative binomial, European regions. JEL classification: C8, J61, O31, O33, R0 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:ira:wpaper:201204&r=eur |
| By: | Ciaian, Pavel,; Kancs, d’Artis; Swinnen, Jo; Van Herck, Kristine; Vranken, Liesbet |
| Abstract: | This paper describes recent developments in sales markets of agricultural land in selected member states of the European Union and its candidate countries. Analysis focuses on the importance of the sales market for agricultural land, the average size of transacted plots, and the evolution and magnitude of the land sales prices. The share of agricultural land sold on the market is relatively stable in most of the old member states, with the exception of Finland, the Netherlands and the UK, where a more dynamic market is observed. For the new member states, the sales market for agricultural land is strongly affected by public sales under the ongoing land privatisation programmes, while strong variation prevails in the private sales market. Substantial differences are also observed in both the average size of the transacted plots and the sales prices. For the latter, price regulations partially explain the heterogeneity in the evolution of sales prices. |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:eps:fmwppr:114&r=eur |
| By: | d'Artis Kancs; Pavel Ciaian |
| Abstract: | Recently, the EU Council adopted a new labour migration policy instrument - the EU Blue Cards (BC) - for attracting the highly skilled workers to the EU. The present paper examines the potential impacts, which BC may cause on less developed sending countries (LDC). Our results suggest that the EU BC will reduce human capital in LDC. In addition, BC will also have a negative impact on knowledge capital. These findings suggest that without appropriate policy responses, BC makes developing country growth prospects rather bleak than blue. Therefore, we propose and analyse alternative migration policy instruments for LDC. We find that policies implemented on the demand side of the skilled labour market are the most efficient. In contrast, policies that address the supply side of the skilled labour market are the least efficient, though they might be less costly to implement. |
| Keywords: | Knowledge capital, human capital, high-skill migration, innovative capital, economic growth. |
| JEL: | F02 F22 J24 J61 O15 |
| Date: | 2011–12–12 |
| URL: | http://d.repec.org/n?u=RePEc:eei:rpaper:eeri_rp_2011_21&r=eur |
| By: | Karl Aiginger (WIFO) |
| Abstract: | The European Union is a successful integration experiment, with an increasing number of member countries and an unexpected depth of integration. According to many indicators, it is the largest economic region in the world, leading in many "beyond GDP" indicators representing well being including non material goals. The EU has, however, lost economic dynamic in the last decades and has failed to catch up with the USA in technology and per-capita GDP. Europe has internal disequilibria, its population is ageing and it did not follow its own innovation strategy. Three questions arise in this context: 1. whether Europe should try to go back to the core (deepening integration for a smaller homogenous group), 2. whether it should go for a low road strategy of competitiveness (lowering wages and taxes, forfeiting high quality specialisation and sophisticated standards), and 3. whether it should actively try to develop its own "European Model" and offer this model to its neighbors. A European research project was tendered by the European Commission in order to analyse options for Europe in the globalised world. This 7th Framework Programme project, with the acronym "WWWforEurope", will provide evidence-based research in support of the Europe 2020 Strategy in its four-year in-depth research to be carried out by WIFO and 32 international partners. One important aspect of this strategy is a new "Systemic Industrial and Innovation Policy" (SIIP) which is pulled by the vision of a new growth path of social development and higher emphasis on sustainability. SIIP is further pushed by internal and external competition, openness as well as new technologies and capabilities. This working paper provides some first tentative answers to the three raised questions above. It furthermore sketches the broader research question, challenges and research areas to be answered in the WWWforEurope programme. |
| Keywords: | European socioeconomic model, EU 2020 Strategy, industrial policy, innovation strategy |
| Date: | 2012–02–22 |
| URL: | http://d.repec.org/n?u=RePEc:wfo:wpaper:y:2012:i:421&r=eur |
| By: | Iacovou, Maria; Kaminska, Olena; Levy, Horacio |
| Abstract: | The EUs Statistics on Income and Living Conditions (EU-SILC), launched in 2003, was the first micro-level data set to provide comprehensive data on incomes and other social and economic domains over the enlarged EU. This paper draws on two programmes of research to ask how well the EU-SILC has met the objectives with which it was designed. We focus on three areas: sampling and design, household dynamics, and incomes. In each domain the EU-SILC forms a unique and useful resource, but we also find problems and shortcomings, some of which could be rectified relatively easily, for the majority of countries. |
| Date: | 2012–02–17 |
| URL: | http://d.repec.org/n?u=RePEc:ese:iserwp:2012-03&r=eur |
| By: | Carlos Farinha Rodrigues |
| Abstract: | The aim of this paper is to estimate the impact on the distribution of household income and poverty of the 2010 reform of the law that establish the non-contributory social benefits entitlement conditions in Portugal, with particular incidence in the Social Integration Income (RSI). Carried out in a period of serious deepening economic and social crisis, the changes in the resources condition appear fundamentally as a way of limiting and reducing the resources earmarked for social policies usage, precisely at the time when increased social insecurity should lead to a significant increase in the importance of such social policies. Using micro-data from the European Union Statistics on Income and Living Conditions (EU-SILC), we simulate the impact of the reform and estimate its effects on the income distribution and on different dimensions of monetary poverty. The change in the size of government expenditure required to finance these programs will also be estimated. |
| Keywords: | Social Policy, Income Distribution, Inequality, Poverty Alleviation, Portugal |
| JEL: | D63 I32 I38 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:ise:isegwp:wp052012&r=eur |
| By: | Jaraite, Jurate (CERE, Centre for Environmental and Resource Economics); Kažukauskas, Andrius (CERE, Centre for Environmental and Resource Economics); Lundgren, Tommy (CERE, Centre for Environmental and Resource Economics) |
| Abstract: | This paper provides new evidence on the determinants of environmental expenditure and investment. Also, by employing the Heckman selection models, we study how environmental expenditure and investment by Swedish industrial firms responded to the national and international policies directed to mitigate air pollution during the period 1999 through 2008. We find that firms that use carbon intensive fuels such as oil and gas are more likely to spend to and invest in the environment. Larger, more profitable and more energy intensive firms are more likely to incur environmental expenditure/investment. Overall, an important finding of our econometric analysis is that environmental regulation both on the national and international levels are highly relevant motivations for environmental expenditure and investment. |
| Keywords: | environmental expenditure and investment; environmental policy; EU ETS; panel data |
| JEL: | C23 Q52 Q58 |
| Date: | 2012–02–17 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:slucer:2012_007&r=eur |
| By: | Brixiova, Zuzana (United Nations Development Programme (UNDP), Swaziland); Égert, Balázs (OECD) |
| Abstract: | The unemployment rate in Estonia rose sharply in 2010 to one of the highest levels in the EU, after the country entered a severe recession in 2008. While the rate declined relatively rapidly in 2011, it remained high especially for the less educated. In 2009, the Employment Contract Law relaxed employment protection legislation and sought to raise income protection of the unemployed to facilitate transition from less to more productive jobs while mitigating social costs. Utilizing a search model, this paper shows that increasing further labour market flexibility through reducing the tax wedge on labour would facilitate the structural transformation and reduce the long-term unemployment rate. Linking increases in unemployment benefits to participation in job search or training programmes would improve the unemployed workers' incentives to search for jobs or retrain and the medium term labour market outcomes. Social protection schemes for the unemployed should be also strengthened as initially intended to give the unemployed sufficient time to search for adequate jobs or retrain for new opportunities. |
| Keywords: | labour market reforms, search model, Estonia, OECD countries |
| JEL: | J08 J64 E24 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6336&r=eur |
| By: | Theobald, Hildegard (University of Vechta) |
| Abstract: | The establishment of Long-term Care Insurance (LTCI) in Germany in 1995/96 significantly restructured Germany's public long-term care support. Before, the responsibility for providing care to Germany's elderly population lay mainly with the family, while based on the principle of subsidiarity public support was only available after a means-test within a tax-based social assistance framework. The law on LTCI established a social-insurance and mandatory private insurance scheme to grant universal public support in strictly defined situations of care dependency. LTCI in Germany was created at the beginning of the 1990s in a situation of welfare state constraints characterised by criticism towards comprehensive public welfare spending and an increasing emphasis on individual responsibilities and market solutions (Landenberger, 1994; Meyer, 1996). Against this background the law was a compromise on the balance of private, family, public and market responsibilities between more economically - and more social-policy oriented politicians and social actors. The LTCI law aimed to combine several goals, namely the introduction of universal social rights, cost containment strategies, the promotion of ageing in place, with an emphasis on family care, and the expansion of a market-oriented care infrastructure (Theobald, 2011, forthcoming). The goals are reflected in the definition of social rights valid in the whole country, the construction of funding schemes and the regulation of family care-giving and professional care provision based on free choice for users between both types of care provision and care providers. Prevalent benefit use and care arrangement patterns emerging within the framework of LTCI still confirm a family-oriented strategy of long-term care provision mainly supported by cash payments. However, a more detailed analysis of current care arrangements reveals considerable differences in the interplay of family care, professional care provision and further paid care services depending on gender, socio-economic class and migration background. Furthermore, the development of a market-oriented care infrastructure based on price competition resulted in considerable regional differences, which run counter to the goal of the insurance to provide equal support in defined situations of care dependency throughout the country. Public long-term care support is embedded and simultaneously limited by mode and principles of funding; i.e. the introduction of a separated social- and private insurance scheme and cost containment strategies. The basic presumptions surrounding the two distinct schemes on the role of state respectively public, market or private responsibilities are the subject matter of continual discussions. The paper aims to give a broad overview of social rights, benefits, modes and principles of LTCI funding and an analysis of outcomes related to patterns of care provision and the financial development of this insurance. First, the interrelationship of LTCI with other valid policy schemes in the sector provide a background for the analysis and are outlined to reveal the position of LTCI and further available public support. Second, the basic features of LTCI are presented (sections 2 and 3). The paper goes on to describe and explain assessment procedures, benefit use, prevalent care arrangements patterns, and the situation of informal carers against the background of LTCI (sections 4 and 5). Funding schemes are presented and discussed with regard to their financial development and difficulties, alternative funding concepts and processes of policy-making with their political and social actors (section 6). Finally, LTCI features and their outcomes related to care provision and funding are summarised and discussed in the conclusion (section 7). |
| Keywords: | Long-term Care Insurance; LTCI; Germany; elderly population; family care; market-oriented care |
| JEL: | H53 |
| Date: | 2012–02–06 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ifswps:2011_013&r=eur |
| By: | Giuseppe Russo (University of Salerno and CSEF); Luigi Senatore (University of Salerno and University of Leicester) |
| Abstract: | According to the Lisbon Treaty the increasing cost of enforcing the European border against immigration shall be shared among the EU members. Nonetheless, the Treaty is rather vague with respect to the "appropriate measures" to adopt in order to distribute the financial burden. Members who do not share their borders with source countries have an incentive to free ride on the other countries. We study a contribution game where a border country and a central country minimize a loss function with respect to their national immigration target. We consider both sequential and simultaneous decisions and we show that joint contribution occurs only if the immigration targets are not too different. Total contribution is higher when decisions are simultaneous, but the sequential framework achieves joint contribution under a wider difference in the national targets. |
| Keywords: | Policy making, Government expenditures, Local government expenditures, Federalism. |
| JEL: | D78 H72 H77 |
| Date: | 2012–02–08 |
| URL: | http://d.repec.org/n?u=RePEc:sef:csefwp:306&r=eur |
| By: | Christian Pfeifer (Leuphana University Lueneburg, Germany); Joachim Wagner (Leuphana University Lüneburg, Germany) |
| Abstract: | This empirical paper documents the relationship between composition of a firm's workforce (with a special focus on age and gender) and its performance (productivity and profitability) for a large representative sample of enterprises from manufacturing industries in Germany. We use unique newly available data that for the first time combine information from the statistics of employees covered by social security that is aggregated at the enterprise level and information from enterprise level surveys performed by the Statistical Offices. Our microeconometric analysis confirms previous findings of concave age-productivity profiles, which are consistent with human capital theory, and adds a new finding of a rather negative effect of age on firms' profitability, which is consistent with deferred compensation considerations. Moreover, our analysis reveals for the first time that the ceteris paribus lower level of productivity in firms with a higher share of female employees does not go hand in hand with a lower level of profitability in these firms. If anything, profitability is (slightly) higher in firms with a larger share of female employees. This finding might indicate that lower productivity of women is (over)compensated by lower wage costs for women, which might be driven by general labor market discrimination against women. |
| Keywords: | Ageing, firm performance, gender, productivity, profitability, Germany |
| JEL: | D22 D24 J21 J24 L25 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:lue:wpaper:232&r=eur |
| By: | Zack Cooper; Stephen Gibbons; Simon Jones; Alistair McGuire |
| Abstract: | This paper uses a difference-in-difference style estimation strategy to test separately the impact of competition from public sector and private sector hospitals on the efficiency of public hospitals. Our identification strategy takes advantage of the phased introduction of a recent set of substantive reforms introduced in the English NHS from 2006 onwards. These reforms forced public sector health care providers to compete with other public hospitals and eventually to face competition from existing private sector providers for care delivered to publicly funded patients. In this study, we measure efficiency using hospitals' average length of stay (LOS) for patients undergoing elective surgery. For a more nuanced assessment of efficiency, we break LOS down into its two key components: the time from patients' admission to the hospital until their surgery and the time from their surgery until their discharge. Here, pre-surgery LOS serves as a proxy for hospitals' lean efficiency. Our results suggest that competition between public providers prompted public hospitals to improve their productivity by decreasing their pre-surgery, overall and post-surgery length of stay. In contrast, competition from private hospitals did not spur public providers to improve their performance and instead left incumbent public providers with a more costly case mix of patients and led to increases in post-surgical LOS. |
| Keywords: | Hospital competition, market structure, prospective payment, incentivestructure |
| JEL: | C21 I18 L1 R0 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1125&r=eur |
| By: | Jean-Daniel Rinaudo (BRGM - Bureau de recherches géologiques et minières - BRGM); Marielle Montginoul (UMR G-EAU - Gestion de l'Eau, Acteurs et Usages - CIRAD : UMR90 - IRD - CEMAGREF-UR IRMO - AgroParisTech); Marta Varanda (ICS - ICS - University of Lisbon); Sofia Bento (ISEG - ISEG - Technical University of Lisbon) |
| Abstract: | Groundwater management policies will need to be revised in many Mediterranean countries, in light of the impact of climate change and the increasing demand for water. In this paper, we analyze stakeholder perceptions of three groundwater policy scenarios which respectively assume a strengthening of state intervention, the introduction of market regulation mechanisms, and the transfer of regulation responsibility to farmers. The method consists of organizing scenario workshops with experts, institutional representatives, and farmers. It is applied in two case studies in France and Portugal. From a methodological viewpoint, the research demonstrates the farmers' ability to contribute to an exploratory assessment of possible future water management scenarios. From a policy viewpoint it clarifies expectations concerning State intervention and self-regulation by farmers. It also provides some insights regarding the acceptability of tradable groundwater permits in two European contexts. |
| Keywords: | Climate change; groundwater management; water markets; self-regulation; France; Portugal; scenario workshops. |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-00658994&r=eur |
| By: | Anne-Laure Le Nadant (CREM - Centre de Recherche en Economie et Management - CNRS : UMR6211 - Université de Rennes 1 - Université de Caen); Frédéric Perdreau (COACTIS - Université Lumière - Lyon II : EA4161 - Université Jean Monnet - Saint-Etienne) |
| Abstract: | A long-standing controversy is whether LBOs generate economic efficiencies through a superior governance framework, or whether LBO funds are driven by short-term profit motives and sacrifice long-term growth to boost short-term performance. Using a propensity score methodology, this paper provides an empirical analysis of the innovative efforts of a sample of 89 French manufacturing firms that underwent a buyout between 2001 and 2005. The matching estimates (average treatment on the treated, ATT) of the effect of LBOs on firm level of innovation expenditures in 2006 show no significant differences between LBO targets and comparable companies that did not go through an LBO. In contrast, we find significant effects of LBOs on both service innovation and marketing innovations in design and packaging and product promotion. |
| Keywords: | Buyouts, Innovation, Private Equity Firms. |
| Date: | 2011–11–19 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-00669910&r=eur |
| By: | Giuseppe Croce; Emanuela Ghignoni |
| Abstract: | According to a recent strand of literature this paper highlights the relevance of spatial mobility as an explanatory factor of the individual risk of being overeducated. To investigate the causal link between spatial mobility and overeducation we use individual information about daily home-to-work commuting time and choices to relocate in a different local area to get a job. In our model we also take into account relevant local labour markets features. We use a probit bivariate model to control for selective access to employment, and test the possibility of endogeneity of the decision to migrate. Separate estimations are run for upper-secondary and tertiary graduates. The results sustain the appropriateness of the estimation technique and show a significantly negative impact of the daily commuting time for the former group, as well as, negative impact of the decision to migrate and of the migration distance for the latter one. |
| Keywords: | Overeducation, Spatial flexibility, Local labour markets, Sample selection bias |
| JEL: | J21 J61 J62 |
| Date: | 2011–07 |
| URL: | http://d.repec.org/n?u=RePEc:sap:wpaper:wp145&r=eur |
| By: | Christophe Godlewski (LaRGE Research Center, Université de Strasbourg) |
| Abstract: | We investigate bank loans’ specialness with a particular focus on the recent boom and bust cycle. We perform an empirical analysis using event study methodology on a sample of 253 large loan announcements for French borrowers between January 2000 and December 2009. We find a significant and negative reaction to bank loan announcements which is mostly driven by loan provided during the crisis period. We also document significant changes in bank behavior over the boom and bust cycle, with important contractual and organizational modifications reflecting a potential “wake-up call” of banks during the crisis. |
| Keywords: | Bank loans, boom and bust, crisis, event study, Europe. |
| JEL: | G14 G20 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:lar:wpaper:2012-03&r=eur |