nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2012‒09‒30
twenty papers chosen by
Giuseppe Marotta
University of Modena and Reggio Emilia

  1. How Do the Unemployed Search for a Job? Evidence from the EU Labour Force Survey By Bachmann, Ronald; Baumgarten, Daniel
  2. GINI DP 50: Child Poverty as a Government Priority: Child Benefit Packages for Working Families, 1992-2009 By Mechelen, N. (Natascha) van; Bradshaw, J. (Jonathan)
  3. GINI DP 46: Analysing Intergenerational Influences on Income Poverty and Economic Vulnerability with EU-SILC By Brian Nolan
  4. GINI DP 33: Income Inequality and Solidarity in Europe By Marii Paskov; Caroline Dewilde
  5. Does Emigration Benefit the Stayers? Evidence from EU Enlargement By Elsner, Benjamin
  6. GINI DP 53: The Redistributive Capacity of Services in the EU By Verbist, G. (Gerlinde); Matsaganis, M. (Manos)
  7. GINI DP 51: In-Work Poverty By Ive Marx; Brian Nolan
  8. Explaining variations in breast cancer screening across European countries By Wuebker, A.;
  9. Research Productivity and the Quality of Interregional Knowledge Networks By Tamás Sebestyén; Attila Varga
  10. Lost in Transition? Minimum Wage Effects on German Construction Workers By Bachmann, Ronald; König, Marion; Schaffner, Sandra
  11. WP 122 - Skill-based inequality in job quality By Haya Stier
  12. Assessing inequalities in preventive care use in Europe: A special case of health-care inequalities? By Carrieri, V.;; Wuebker, A.;
  13. Childcare Subsidies and Labor Supply: Evidence from a large Dutch Reform By L.J.H. Bettendorf; Egbert L.W. Jongen; Paul Muller
  14. The German Labor Market after the Great Recession: Successful Reforms and Future Challenges By Caliendo, Marco; Hogenacker, Jens
  15. GINI DP 32: Income Inequality and Access to Housing in Europe By Caroline Dewilde; Bram Lancee
  16. Competition and the railroads: A European perspective By Knieps, Günter
  17. GINI DP 44: Immigration and Inequality in Europe By Frattini, T. (Tommaso)
  18. Will Solvency II market risk requirements bite? The impact of Solvency II on insurers' asset allocation By Höring, Dirk
  19. The gendered nature of multidimensional poverty in the European Union By Fabrizio Botti; Marcella Corsi; Carlo D'Ippoliti
  20. With Strings Attached: Grandparent-Provided Child care, Fertility, and Female Labor Market Outcomes By Eva Garcia-Moran; Zoe Kuehn

  1. By: Bachmann, Ronald (RWI); Baumgarten, Daniel (Ruhr Graduate School in Economics)
    Abstract: Using harmonized micro data, this paper investigates the job search behaviour of the unemployed in Europe. The analysis focuses on the importance of individual and household characteristics in this context, as well as on cross-country differences in Europe. Our findings suggest that both individual and household characteristics play an important role, with the latter being more decisive for women. However, even when controlling for these factors, remarkable differences remain between countries, which are associated with institutional characteristics at the country level.
    Keywords: job search, search channels
    JEL: J20 J64 C38
    Date: 2012–07
  2. By: Mechelen, N. (Natascha) van; Bradshaw, J. (Jonathan)
    Abstract: In this paper the focus is on the child benefit package for working families and its contribution to tackling in-work child poverty. Tackling child poverty is high on the European Union’s political agenda. It was a priority in the March 2006 European Council, a focus of many of the National Reports on Social Protection and Social Inclusion 2006-2008, and the main work of the EU experts on the National Action Plans in 2007. An influential report by the Social Protection Committee (2008) reflected much of this effort and contained detailed comparative analysis of child poverty using the new European Statistics on Income and Living Conditions (EU-SILC) 2005. The report drew attention to the fact that in the majority of the EU member states, children are at a higher risk of poverty than the population as a whole. More recent analyses of the EU-SILC (Tarki, 2010; Atkinson and Marlier, 2010; Tarki, 2011) confirmed this finding. As a part of its 10-year economic plan, the June 2010 European Council set the target to reduce poverty and social exclusion in the EU by 20 million (European Council, 2010). If this objective is to be achieved, parents and their children will need to be a key focus of anti-poverty policies...
    Date: 2012–07
  3. By: Brian Nolan (School of Applied Social Science, University College Dublin)
    Abstract: The EU-SILC 2005 wave includes a special module on inter-generational transmission of poverty. In addition to the standard data relating to income and material deprivation, information relating to parental background and childhood circumstances was collected for all household members aged over 24 and less than 66 at the end of the income reference period. In principle, the module provides an unprecedented opportunity to apply a welfare regime perspective to a comparative European analysis of the relationship between poverty and social exclusion and parental characteristics and childhood economic circumstances. In this paper we seek to exploit such potential. In pursuing this objective, it is necessary to take into account some of the limitations of the data. We do by restricting our attention to a set of countries where data issues seem less extreme. Finally, we compare findings from one dimensional and multidimensional approaches to poverty and social exclusion in order to provide an assessment of the extent to which our analysis of welfare regime variation provides a coherent account of the intergenerational transmission of disadvantage.
    Keywords: Poverty, intergenerational transmission, welfare regimes, economic vulnerability.
    Date: 2012–05
  4. By: Marii Paskov (Amsterdam Institute of Social Science Research (AISSR), University of Amsterdam (UvA)); Caroline Dewilde (Department of Sociology and Anthropology , Universiteit van Amsterdam)
    Abstract: This paper studies the relationship between income inequality, a macro-level characteristic, and solidarity of Europeans. To this aim, solidarity is defined as the ‘willingness to contribute to the welfare of other people’. We rely on a theoretical idea according to which feelings of solidarity are derived from both affective and calculating considerations, and we test competing hypotheses relating the extent of income inequality to both motivations for solidarity. Using data from the 1999 European Values Study (EVS), we apply multilevel analysis for 26 European countries. Controlling for household income and for other relevant macro-level characteristics which possibly influence feelings of solidarity of Europeans in different countries, we find evidence that in more unequal countries people are less willing to take action to improve the living conditions of their fellow-countrymen. This is true for respondents living in both low- and high-income households. Following from our expectations derived from the literature, this finding furthermore suggests that, at least when measured in terms of ‘willingness to contribute to the welfare of other people’, feelings of solidarity seem to be influenced more strongly by affective, rather than by calculating considerations.
    Keywords: solidarity, income inequality, social distance, human motives, Europe.
    Date: 2012–03
  5. By: Elsner, Benjamin (IZA)
    Abstract: Around 9% of the Lithuanian workforce emigrated to Western Europe after the enlargement of the European Union in 2004. I exploit this emigration wave to study the effect of emigration on wages in the sending country. Using household data from Lithuania and work permit and census data from the UK and Ireland, I demonstrate that emigration had a significant positive effect on the wages of stayers. A one percentage-point increase in the emigration rate predicts a 0.67% increase in real wages. This effect, however, is only statistically significant for men.
    Keywords: emigration, labor mobility, EU enlargement
    JEL: F22 J61 R23
    Date: 2012–09
  6. By: Verbist, G. (Gerlinde); Matsaganis, M. (Manos)
    Abstract: Welfare states provide social benefits in cash and in kind. Cash benefits are income transfers, such as retirement pensions, family and unemployment benefits and social assistance. Benefits in kind are commodities directly transferred to recipients at zero or below-market prices (Barr 2012). In Europe, benefits in kind are usually services, such as health, education, child care and care for the elderly. For example, hospital care in most countries is provided either free of charge or at near-zero prices (at the point of use). User fees are even rarer in the case of primary and secondary education: enrolment is compulsory up to a certain age, while tuition is provided free of charge to all children attending publicly funded schools, irrespective of family income. Moreover, child care is often heavily subsidised; kindergartens are run by the state (most commonly local governments) or government-supervised private organisations, while user fees, where applicable, are usually income-related (in the sense that higher-income families pay higher fees, while lower-income ones pay less or are fully exempted). Elderly care may also be available on similar terms; besides, several countries have developed long-term care insurance schemes, to cater for the future needs of an ageing population. ...
    Date: 2012–07
  7. By: Ive Marx (Centre for Social Policy, University of Antwerp); Brian Nolan (School of Applied Social Science, University College Dublin)
    Abstract: While in-work poverty is not a new problem, the degree of attention it is receiving in Europe is more recent, reflecting at least two concurrent sources of concern (Andreβ and Lohmann 2008; OECD 2008; European Foundation 2010; Fraser et al. 2011; Crettaz 2011; European Commission 2011). Deindustrialisation, intensifying international trade and skill-biased technological change are said to be threatening if not effectively eroding the (potential) earnings and living standards of some workers in advanced economies. Yet at the same time, policy at EU level and in many countries has become focused on increasing the number of people relying on earnings, and particularly on drawing into the labour market those with the weakest education and work history profiles. The Europe 2020 target of boosting employment rates to 75 per cent of the population aged 20 to 64 shows this drive to be undiminished. Sharply increased unemployment in some countries following on from the onset of the economic crisis has only served to increase the emphasis on getting people into jobs. In light of these trends, there would appear to be legitimate concern that larger sections of the workforce are being expected to rely on jobs that do not generate sufficient income to escape poverty....
    Date: 2012–07
  8. By: Wuebker, A.;
    Abstract: This paper explores variations in the uptake of breast cancer screening and associated factors influencing utilisation of mammography screening among women aged 50 to 69 years in 13 European countries. We focus on the relative importance of individual (e.g. age, education, etc.) and institutional (e.g. public screening program) factors in explaining cross-country variation in the utilisation of mammograms. We take advantage of (a) newly available individual level data from the SHARE as well as (b) regional and country level data on institutional factors. We find that observed individual factors like age, education, health status, etc. are associated with screening uptake within countries but cannot statistically explain cross-country differences. In contrast, observed institutional factors like the availability of an organized screening program can statistically explain about 40 per cent of the between country differences in screening rates.
    Keywords: health economics, prevention, multilevel models, SHARE, cross country differences
    JEL: C I I
    Date: 2012–08
  9. By: Tamás Sebestyén (Department of Economics and Regional Studies, University of Pécs); Attila Varga (Department of Economics and Regional Studies, University of Pécs)
    Abstract: This paper estimates the impact of interregional knowledge flows on the productivity of research at the regional level. We develop the novel index of ’ego network quality’ in order to measure the value of knowledge that can be accessed from a particular region’s global knowledge network. Quality of interregional knowledge networks is related to the size of knowledge accumulated by the partners (‘knowledge potential’), the extent of collaboration among partners (‘local density’) and the position of partners in the entire knowledge network (‘global embeddedness’). Ego network quality impact on the productivity of research in scientific publications and patenting at the regional level is tested with co-patenting and EU Framework Program collaboration data for 189 European NUTS 2 regions.
    Keywords: patents, scientific publications, knowledge networks, R&D productivity, regional knowledge production function, European regions
    JEL: O33 R11 R58
    Date: 2012–06
  10. By: Bachmann, Ronald (RWI); König, Marion (Institute for Employment Research (IAB), Nuremberg); Schaffner, Sandra (RWI)
    Abstract: Using a linked employer-employee data set on the German construction industry, we analyse the effects of the introduction of minimum wages in this sector on labour market dynamics. In doing so, we focus on accessions and separations, as well as the underlying labour market flows, at the establishment level. The fact that minimum wages in Germany are sector-specific enables us to use other industries as control groups within a difference-in-differences framework. We find that both accessions and separations rise in East Germany as a result of the minimum wage introduction. The evidence on detailed worker flows suggests that this is mainly due to increased recalls. Furthermore, the minimum wage introduction lowered job-to-job transitions in East Germany, which can be explained by a more compressed wage distribution making on-the-job search less worthwhile. No clear effects on labour market dynamics in West Germany arise.
    Keywords: minimum wage, labour market flows, difference-in-differences, linked employer-employee
    JEL: J23 J38 J42 J63
    Date: 2012–07
  11. By: Haya Stier (Amsterdam Insitute for Advanced Labour Studies, Universiteit van Amsterdam)
    Abstract: This study focuses on skill-based inequality in job quality and the role of social institutions in structuring the relation of skills to job attributes. Four measures of job quality are examined: job security, job achievement, job content and flexibility, and their variation across workers with different level of skills and across countries. The study is based on the 2005 ISSP module on work orientations and encompasses 27 countries. Obtained through multilevel modeling, the findings show that low-skilled workers are disadvantaged in all aspects of job quality. However, skill inequality in the quality of employment depends on countries’ characteristics, with declining skill-based inequality in countries at higher levels of technological development and widening skill disparities in times of technological growth and when unemployment is high.
    Keywords: Job quality; job attributes; skill inequality; institutional arrangements; comparative framework
    Date: 2012–08
  12. By: Carrieri, V.;; Wuebker, A.;
    Abstract: This paper presents the first cross-country estimation of needs-adjusted income and education-related inequalities in the use of a whole set of preventive care treatments. Analysis is based on the last three waves of the Survey of Health, Ageing and Retirement (SHARE) for individuals aged 50 and over living in 13 European countries. We employ alternative concentration indices based on the CI-corrections for binary outcomes to compute inequalities in the use of breast cancer screening, of colorectal cancer screening, of influenza vaccination, and of routine prevention tests, such as blood pressure, cholesterol, and blood sugar tests. After controlling for needs, we find that in many European countries strong pro-rich and educational inequalities exist with respect to breast cancer screening, cholesterol and blood sugar tests. Furthermore, we find that poor and less educated people are more likely than the better off to use preventive care late, e.g. when health shocks occurred or health problems display already symptoms. Finally, results suggest that access to treatments within a specialist setting is generally less equal than access to treatments provided within a GP setting. Equity implications of the results are then discussed according to different possible theories of distributive justice in health care delivery.
    Keywords: Preventive care; socio-economic related inequalities; concentration indices
    JEL: I14 D63
    Date: 2012–08
  13. By: L.J.H. Bettendorf (CPB Netherlands Bureau for Economic Policy Analysis); Egbert L.W. Jongen (CPB Netherlands Bureau for Economic Policy Analysis); Paul Muller (VU University Amsterdam)
    Abstract: Over the period 2005-2009 the Dutch government increased childcare subsidies substantially, reducing the average effective parental fee by 50%, and extended subsidies to so-called guestparent care. We estimate the labour supply effect of this reform with a difference-in-differences strategy, using parents with older children as a control group. We find that the reform had a moderately sized impact on labour supply. Furthermore, the effects are an upper bound since there was also an increase in an earned income tax credit for the same treatment group over the same period. The joint reform increased the maternal employment rate by 2.3%-points (3.0%). Average hours worked by mothers increased by 1.1 hours per week (6.2%). Decomposing the hours effect we find that most of the increase in hours is due to the intensive margin response. A number of robustness checks confirm our results.
    Keywords: Childcare subsidies; labour participation; hours worked; difference-in-differences
    JEL: C21 H40 J13 J22
    Date: 2012–09–13
  14. By: Caliendo, Marco (University of Potsdam); Hogenacker, Jens (IZA)
    Abstract: The reaction of the German labor market to the Great Recession 2008/09 was relatively mild – especially compared to other countries. The reason lies not only in the specific type of the recession – which was favorable for the German economy structure – but also in a series of labor market reforms initiated between 2002 and 2005 altering, inter alia, labor supply incentives. However, irrespective of the mild response to the Great Recession, there are a number of substantial future challenges the German labor market will soon have to face. Female labor supply still lies well below that of other countries and a massive demographic change over the next 50 years will have substantial effects on labor supply as well as the pension system. In addition, due to a skill-biased technological change over the next decades, firms will face problems of finding employees with adequate skills. The aim of this paper is threefold. First, we outline why the German labor market reacted in such a mild fashion, describe current economic trends of the labor market in light of general trends in the European Union, and reveal some of the main associated challenges. Thereafter, the paper analyzes recent reforms of the main institutional settings of the labor market which influence labor supply. Finally, based on the status quo of these institutional settings, the paper gives a brief overview of strategies to combat adequately the challenges in terms of labor supply and to ensure economic growth in the future.
    Keywords: benefit systems, labor supply, labor force participation, unemployment, public policy
    JEL: J26 J38 J68
    Date: 2012–08
  15. By: Caroline Dewilde (Department of Sociology and Anthropology , Universiteit van Amsterdam); Bram Lancee (AIAS, Universiteit van Amsterdam)
    Abstract: This paper analyses the relation between income inequality and access to housing for low- income households. Three arguments are developed, explaining how inequality might affect housing affordability, quality and quantity. First, it is the absolute level of resources, not their relative distribution, which affects access to housing. Second, inequality affects access to housing in different ways, due to rising aspirations and status competition. Third, the effect of inequality is mediated by housing market pressures. Multilevel-models for 28 countries indicate that: 1) there is no relation between inequality and housing affordability – the level of resources matters, rather than their distribution; 2) there exists a positive relation between inequality and crowding for owners; 3) higher levels of income inequality are associated with lower housing quality for owners and renters. Although there is a relation between inequality and access to housing, it is complex and not mediated by our indicator of house price-changes. Key words: Income inequality, low incomes, housing conditions, comparative research, Europe.
    Date: 2012–03
  16. By: Knieps, Günter
    Abstract: The reform of European railroads is a time-consuming process strongly charac-terized by its path-dependency. Firstly, a short outline of the historical roots of the controversial debates on the role of the state and the markets, and the organi-zation of competition in European railroad industries is provided. Secondly, the opening of the market for train services in the context of the liberalization of European transport markets since 1985 is characterized and the regulatory pre-conditions for competition on the tracks are presented. Thirdly, the evolution of track access regulation in Europe during the last decades is analyzed, differenti-ating between the period of negotiated third party access since 1991, the intro-duction of ex ante regulation by the first railroad infrastructure package in 2001, and the danger of overregulation posed by the recent Draft Directive of July 2012 establishing a single European railway area. Fourthly, the role of competi-tion on the markets for rail services and the reform process of interoperability requirements are considered. Finally, competition on the markets for rail ser-vices and public subsidies for rail infrastructures as well as subsidies for train services are evaluated. --
    Date: 2012
  17. By: Frattini, T. (Tommaso)
    Abstract: This paper aims at assessing the effect of immigration on native income inequality in Western Europe. I use different regional indicators of income inequality, which allow distinguishing between dispersion at the top and at the bottom of the income distribution, and correlate them to regional annual inflows of immigrants over the period 2004-2008. Results indicate that immigration is associated with a decrease of income inequality at the bottom of the distribution. However, IV estimates do not show any causal effect of immigration on income dispersion.
    Date: 2012–01
  18. By: Höring, Dirk
    Abstract: The European insurance industry is among the largest institutional investors in Europe. Therefore, major reallocations in their investment portfolios due to the new risk-based economic capital requirements introduced by Solvency II would cause significant disruptions in European capital markets and corporate financing. This paper studies whether the new regulatory capital requirements for market risk are a binding constraint for European insurers by comparing the market risk capital requirements of the Solvency II standard model with the Standard & Poor's rating model for a fictitious, but representative, European-based life insurer. The results show that for a comparable level of confidence, the rating model requires 68% more capital than the standard model for the same market risks. Hence, Solvency II seems not to be a binding capital constraint for market risk and thus would not significantly influence the insurance companies' investment strategies. --
    Keywords: Solvency II,Rating,Market Risk,Capital Requirements
    Date: 2012
  19. By: Fabrizio Botti; Marcella Corsi; Carlo D'Ippoliti
    Abstract: Recent economic literature on poverty may be broadly divided into two strands. One strand investigates the multidimensional nature of poverty. The other strand, employing the large availability of household surveys, investigates the micro and macro determinants of monetary poverty, analyzing the role played by individual and household characteristics and macro socio-economic factors. In this framework, a gender approach has often been limited to the analysis of the coefficient “woman” in standard regression analyses of the determinants of poverty. By contrast, feminist research has consistently stressed the importance of a more holistic conceptual and empirical approach to encapsulate gender deprivation. This paper aims at building a bridge between the two mentioned streams, by analyzing the gendered nature of multidimensional of poverty. Although gender mainstreaming is specified in the European Union policy framework as a key element of active inclusion policies, this approach to policy design and monitoring is still underdeveloped.
    Keywords: multidimensional poverty; gender inequality; individual income; household economics; indicators
    JEL: B54 I32 J16
    Date: 2012–09–19
  20. By: Eva Garcia-Moran (The Center for Economic and Political Research on Aging , University of Lugano); Zoe Kuehn (Departmento de Economia Cuantitativa, Universidad Complutense de Madrid.)
    Abstract: Grandparents are regular providers of free child care. Similar to any other form of child care, availability of grandparent-provided child care affects fertility and labor market decisions of women positively. We find that women in Germany, residing close to parents or in-laws are more likely to have children and that as mothers they are more likely to hold a regular part-or fulltime job. However, different from any other type of child care, for individuals to enjoy grandparent-provided child care on a regular basis, residence choices must coincide with those of parents or in-laws. Thus while living close provides access to free child care, it imposes costly spatial restrictions. We find that hourly wages of mothers residing close to parents or in-laws are lower compared to those residing further away, and having relatives taking care of ones' children increases the probability of having to commute. We build a general equilibrium model of residence choice, fertility decisions, and female labor force participation that can account for the relationships between grandparent-provided child care, fertility and female labor market outcomes. We simulate our model to analyze how women's decisions on residence, fertility, and labor force participation change under distinct scenarios regarding availability of grandparent provided childcare and different family policies.
    Keywords: informal child care, fertility, labor force participation, spatial restrictions, regional labor markets
    JEL: J13 J61 H42 R23
    Date: 2012–09

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