nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2012‒04‒10
fifteen papers chosen by
Giuseppe Marotta
University of Modena and Reggio Emilia

  1. Immigration to Norway 1969-2010. Effects of policies and EEA membership By Ådne Cappelen and Terje Skjerpen
  2. Labour Market Reforms and Outcomes in Estonia By Zuzana Brixiova; Balázs Égert
  3. What Drives the Urban Wage Premium? Evidence along the Wage Distribution By Alessia Matano; Paolo Naticchioni
  4. The Effect of Physician Fees and Density Differences on Regional Variation in Hospital Treatments By Rudy Douven; Remco Mocking
  5. WP 118 - Collective redress and workers’ rights in the EU By Jan Cremers; Martin Bulla
  6. The incidence of Cash for Clunkers: an analysis of the 2009 car scrappage scheme in Germany By Ashok Kaul; Gregor Pfeifer; Stefan Witte
  7. Obesity and Employment in Ireland: Moving Beyond BMI By Mosca, Irene
  8. Volunteering, Happiness and Public Policy By Martin Binder; Andreas Freytag
  9. A Comparison of Benefit Cost and Cost Utility Analysis in Practice: Divergent Policies in Sweden By Hultkrantz, Lars; Svensson, Mikael
  10. Public sector pay policy in East European countries By Lupu, Dan
  11. Taxes and the Choice of Organizational Form by Entrepreneurs in Sweden By Edmark, Karin; Gordon, Roger
  12. Heterogeneity in urban freight policy impact: own-account agents in Rome's LTZ By Edoardo Marcucci; Amanda Stathopoulos
  13. Competition Policy in Ireland: A Good Recession? By Gorecki, Paul K.
  14. Market integration of conventional and organic wheat in Germany By Würriehausen, Nadine; Lakner, Sebastian; Ihle, Rico
  15. Corporate balance sheet adjustment: stylized facts, causes and consequences By Eric Ruscher; Guntram Wolff

  1. By: Ådne Cappelen and Terje Skjerpen (Statistics Norway)
    Abstract: We examine how changes to regulations and the economic conditions have influenced gross immigration to Norway from, in principle, all countries in the world during 1969– 2010. In line with existing studies of immigration we find that economic factors were important for immigration to Norway. Income differences between Norway and other countries have the expected impact, as do changes in income distributions. The labour market situation has also been important in that lower unemployment in Norway has resulted in higher immigration and higher unemployment in the country of origin has led to higher emigration to Norway. We find that immigration policies have largely had the expected effects. One example is the 1975 ‘immigration halt’ that did have a strong and long lasting effect on total immigration to Norway. Further tightening of the immigration regulations that came in 1977 also reduced immigration, while the more liberal policies introduced in 1981 contributed to higher immigration. From 2000 to 2010 several changes linked to the enlargement of EU influenced immigration to Norway. Norway’s membership in the European Economic Area (EEA) in 1994, and in the Schengen-area in 2001 resulted in higher immigration while the 2004 and 2007 EU enlargements also increased labour immigration to Norway substantially.
    Keywords: Immigration; Immigration policies; Incentive variables
    JEL: J11 J15
    Date: 2012–03
  2. By: Zuzana Brixiova; Balázs Égert
    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
  3. By: Alessia Matano; Paolo Naticchioni (Sapienza University of Rome Italy.)
    Abstract: This paper aims at disentangling the role played by different theoretical explanations in accounting for the urban wage premium along the wage distribution. We analyze the wage dynamics of migrants from low-to-high-density areas in Italy, using quantile regression and individual panel data to control for the sorting of workers. The results show that skilled workers enjoy a higher wage premium when they migrate (wage level effect), in line with the agglomeration externalities explanation, while unskilled workers benefit more from a wage premium accruing over time (wage growth effect). Further, investigating the determinants of the wage growth effect in greater depth, we find that for unskilled workers the wage growth is mainly due to human capital accumulation over time, consistently with the “learning” hypothesis, while for skilled workers it is the “coordination” hypothesis that matters.
    Keywords: Urban Wage Premium, Human Capital, Spatial Sorting, Wage Distribution, Quantile Fixed Effects
    JEL: J31 J61 R23
    Date: 2012
  4. By: Rudy Douven; Remco Mocking
    Abstract: <p>We use a panel data set of about 1.7 million hospital records in 4,000 Dutch zip code regions for the years 2006-2009. We estimate the effect of physician fees and physician density on regional variation in hospital care for nine different treatments.</p><p>Our results show that a 1 percent increase in the total number of physicians, if these extra physicians are all paid according to an output-based reimbursement scheme, would increase the number of treatments on average by 0.40 percent. For salaried physicians we find a significantly lower average effect of 0.15 percent. We find no or weak effects for hip fractures, which is included in the analysis as a control treatment. Our data allows us to deal with reverse causality, excess demand, border crossing, and availability effects. Our findings lend support to the existence of supplier induced demand for the majority of the analyzed treatments.</p>
    Date: 2012–03
  5. By: Jan Cremers (AIAS, Universiteit van Amsterdam); Martin Bulla (Faculty of Law, Department of Labour Law and Social Security Law, Trnava University)
    Abstract: This Working Paper examines the issue of collective redress as a possible way to defend workers’ rights in the EU. Since the implementation of the internal market and the development of the Community acquis trade unions and the workers they represent in Europe are confronted with the question how to defend workers’ rights that can be derived from EU law, especially in a cross-border context. Although in theory it is often claimed that foreign workers have access to justice and can address to local courts like any other worker the practice is rather patchy. In the first exploratory contribution Jan Cremers describes the latest developments in the European Union related to the cross-border enforcement of workers’ rights. The notion of collective redress is introduced with a short explanation of the position of the trade unions. After an exploration of practical experiences the article ends with an overview of challenges and open questions that have led to further desktop research. Martin Bulla investigated whether collective redress can provide a possible way of improvement of judicial enforcement of posted workers’ rights vested in the Posting of Workers Directive (Directive 96/71/EC). The contribution starts with the most significant problems posted workers are facing, followed by an overview of basic types of collective redress procedures as well as differences in approaches to legal regulation in countries. EU initiatives dealing with the issue of collective redress mainly related to consumer law are examined and existing legal instruments are addressed with a view to a possible use for enhancement of posted workers’ rights. Finally an overview of ways of applying redress procedures under the existing legislation is followed by proposals concerning a better functioning of collective redress in respect to posted workers.
    Date: 2012–03
  6. By: Ashok Kaul; Gregor Pfeifer; Stefan Witte
    Abstract: Governments all over the world have invested tens of billions of dollars in car scrappage programs to fuel the economy in 2009. We investigate the German case using a unique micro transaction dataset covering the years 2007 to 2010. Our focus is on the incidence of the subsidy, i.e., we ask how much of the € 2,500 buyer subsidy is captured by the supply-side through an increase in selling prices. Using regression analysis, we find that average prices in fact decreased for subsidized buyers in comparison to non-subsidized ones, suggesting that eventually subsidized customers benefitted by more than the subsidy amount. However, the incidence was heterogeneous across price segments. Subsidized buyers of cheap cars paid more than comparable buyers who did not receive the subsidy, e.g. for cars of € 12,000 car dealers reaped about 8% of the scrappage prime. The opposite was true for more expensive cars, e.g. subsidized buyers of cars of € 32,000 were granted an extra discount of about € 1,100. For cars priced about € 18,000, we find no price discrimination, i.e., in this price segment consumers fully captured the transfer. Our results can be explained by optimizing behavior on the supply-side both in the lower and upper price segments. The results are extremely robust to extensive sensitivity checks.
    Keywords: Cash-for-Clunkers, scrappage scheme, incidence, subsidy, pricing
    JEL: H22 D12 L62
    Date: 2012–03
  7. By: Mosca, Irene
    Abstract: I use data from the first wave of the Irish Longitudinal Study on Ageing (TILDA) to investigate the impact of obesity on the labour market status of older Irish individuals. I employ an anthropometric indicator of body composition (waist circumference) along with body mass index. I include a wide array of subjective and objective health indicators in the empirical model. I find that obese women are less likely to be at work. However, both the magnitude and statistical significance of this correlation are sensitive to the definition of obesity. Factors other than socioeconomic characteristics and health are also found to play a role in explaining why obese older women are less likely to be employed. Much weaker evidence is found for men.
    Keywords: BMI/data/employment/Individuals/Ireland/labour market/older/Waist Circumference
    Date: 2012–03
  8. By: Martin Binder (Max Planck Institute of Economics, Jena, Germany); Andreas Freytag (School of Economics and Business Administration, Friedrich-Schiller-University Jena)
    Abstract: Is the activity of volunteering something that benefits the volunteer as well as the recipient of the volunteer's activities? We analyze this relationship and apply matching estimators to the large-scale British Household Panel Survey (BHPS) data set to estimate the causal impact of volunteering on happiness. We take into account personality traits that could jointly determine volunteering behaviour and happiness. We find that the causal impact of volunteering on happiness is positive and increasing over time if volunteering is sustained. In a quantile analysis, we find that this effect seems to be driven by reducing the unhappiness of the less happy quantiles of the well-being distribution. We test the robustness of our findings and discuss their relevance for public policy.
    Keywords: volunteering, happiness, altruism, generosity, public policy, BHPS
    JEL: D6 D64 Z1
    Date: 2012–03–30
  9. By: Hultkrantz, Lars (Department of Business, Economics, Statistics and Informatics); Svensson, Mikael (Department of Economics)
    Abstract: We compare state-of-the-art implementation of Benefit Cost Analysis (BCA) and Cost Utility Analysis (CUA) as tools for making priorities in allocation of national public funds in the transport sector and health sector, respectively, in Sweden. While the principal distinctions between these methods are well known, less notice has been given to a number of other differences that have emerged as national and international practices have evolved over time along separate lines. We compare cost and benefit components and economic parameter values and find some surprising disparities. There are inconsistencies, both across methods and within each method. Both can be improved by learning from the other. We also find that some current practices conflict with the underlying welfare theory and/or insights from recent empirical analysis.
    Keywords: Benefit Cost Analysis; Cost Utility Analysis
    JEL: D61 H51 I18
    Date: 2012–04–03
  10. By: Lupu, Dan
    Abstract: The public sector salaries in general, but especially in the civil administration has been and will be a topical issue, highly controversial, and with a permanent presence in the media. This article presents the developments that took place in wages of Eastern European public servants as a result of the international financial crisis.
    Keywords: wages; public sector; private sector
    JEL: J31 J38
    Date: 2012–03–29
  11. By: Edmark, Karin (Research Institute of Industrial Economics (IFN)); Gordon, Roger (Research Institute of Industrial Economics (IFN))
    Abstract: This paper makes use of individual data for 2004 to 2008 on owners of closely-held businesses in Sweden to estimate the role of both tax and non-tax determinants in the choice to be a closely-held corporation vs. a proprietorship. While lower-income individuals face relatively neutral incentives, higher income households face strong tax incentives to be corporate. The data suggest a strong response to these tax incentives. Many conventional non-tax determinants are confirmed in the data as well.
    Keywords: Self-employment; Entrepreneurship; Taxation of closely-held businesses; Business organizational form
    JEL: G32 G38 H25
    Date: 2012–03–26
  12. By: Edoardo Marcucci (DIPES/CREI, University of Roma Tre); Amanda Stathopoulos (EPFL, Lausanne/CREI, University of Roma Tre)
    Abstract: Urban freight policy-making aims to improve the efficiency of freight movement in cities. Importantly, contemplated policies impact on complex pre-existent relationships among various agents operating in the distribution chain. The most relevant operators to study are: retailers, transport providers and own-account. There is a lack of knowledge concerning the specificities of these agent-types behaviour that calls for a more detailed analysis at the agent-specific level. This paper focuses on Urban Freight Transport (UFT) where an agent-specific policy analysis is carried out with specific attention to own account agents. Own account is, in fact, among the least studied agent-types in this context. This lack of attention is mainly due to the difficulty in acquiring data concerning their preferences and also to the widely accepted presumption concerning their relative inefficiency often giving rise to highly penalizing policies specifically aimed at this group. The empirical results reported are derived from a study conducted in the limited traffic zone (LTZ) in Rome's city centre in 2009. The analysis is based on a highly detailed and representative data set. This include both general information on the specific respondent involved along with company characteristics as well as stated ranking exercises (SRE) where interviewees are presented with alternative policy scenarios and asked to rank them according to their preference structure. The paper reports on the specific preference structure for own account operators. The paper proposes a systematic comparison, via WTP/WTA measures, between the potentially inaccurate estimates deriving from a simplistic analysis of preferences and those originating from an advanced treatment of preference heterogeneity. These considerations are prodromal to potentially distorted policy forecasts that, in turn, would be fed into micro simulation models to evaluate policy impacts. Various forms of heterogeneity are explored. The data allow the analysis, among other socioeconomic characteristics, of the impact that belonging to specific macro-freight-sectors has on the attributes used in the SRE. Furthermore, adopting a latent class (LC) specification, we test for the presence of respondent clusters in evaluating the policy mix considered for implementation. The paper addresses methodologically innovative issues; uses a new, detailed and significant data set; discusses a policy relevant issue and produces useful information from a policy-making perspective. The quantification of WTP and WTA measures for possible policies to be implemented provides an important benchmark both for policy makers as well as for researchers in this sector.
    Keywords: freight operators; own-account; preference heterogeneity, limited traffic zone.
    Date: 2012
  13. By: Gorecki, Paul K.
    Abstract: This paper analyses the conduct of competition policy in Ireland between 2000 and 2011. Attention is paid to the policies and actions of those persons and institutions responsible for competition policy: the Minister for Jobs, Enterprise and Innovation; the Competition Authority; the Courts; and, since 2010, the European Union and the International Monetary Fund. Competition policy after some initial setbacks at the beginning of the recession, has enjoyed strong support since 2010.
    Keywords: competition/COMPETITION POLICY/Ireland/Policy/recession/European Union
    Date: 2012–03
  14. By: Würriehausen, Nadine; Lakner, Sebastian; Ihle, Rico
    Abstract: This paper ... is concerned with interdependencies between organic and conventional wheat prices at the producer level. The analysis is carried out by means of cointegration analysis, that is, the estimation of a vector error correction model considering the two price series. With such a model, empirical evidence on the integration of both markets and the speed of transmission of price signals between them can be obtained. With respect to the transformation in the organic and conventional sector, we want to check, if we find evidences for a structural changes. We assume that an increasing share of supermarkets and discounters in the organic sector play a considerable role and lead to a closer link between organic and conventional prices. First, we present the development of the organic market before we give a description of some theory of price transmission analysis. Then we present the data, the model and estimation results. Finally, we draw conclusions. --
    Date: 2012
  15. By: Eric Ruscher; Guntram Wolff
    Abstract: Using national account data, we define corporate balance sheet adjustment episodes as periods during which major increases in non-financial corporations' net lending/borrowing are experienced. An analysis of such episodes in Germany and Japan, and a more systematic exploration of a sample of 30 countries, show that corporate balance sheet adjustment tends to be long lasting and associated with significant effects on current accounts, wages and investment. The adjustment is generally achieved by reducing investment and increasing savings on the back of a falling wage share. A panel econometric exercise shows that balance sheet adjustment periods are triggered by macroeconomic downturns as well as balance sheet stress due to high debt, low liquidity and negative equity price shocks.
    JEL: E62 H20 H30
    Date: 2012–02

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