nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2013‒04‒27
twenty papers chosen by
Giuseppe Marotta
University of Modena and Reggio Emilia

  1. Tax-benefit systems, income distribution and work incentives in the European Union By Jara Tamayo, Holguer Xavier; Tumino, Alberto
  2. Is institutional trust related to the attitudes towards immigrants in Europe? A study of majority and minority population By Vivika Halapuu; Tiiu Paas; Tiit Tammaru
  3. Diffusion of Pharmaceuticals: Cross-Country Evidence of Anti-TNF drugs By Brekke, Kurt R.; Dalen, Dag Morten; Holmås, Tor Helge
  4. Towards a European Union Child Basic Income? Within and between country effects By Levy, Horacio; Matsaganis, Manos; Sutherland, Holly
  5. The heterogeneous effects of workforce diversity on productivity, wages and profits By Andrea Garnero; François Rycx
  6. EUROMOD: The European Union Tax-Benefit Microsimulation Model By Sutherland, Holly; Figari, Francesco
  7. The Effect of Employee Workplace Representation on Firm Performance a Cross-Country Comparison within Europe By Annette van den Berg; Yolanda Grift; Arjen van Witteloostuijn; Christophe Boone; Olivier Van der Brempt
  8. The importance of choosing the data set for tax-benefit analysis By Ceriani, Lidia; Fiorio, Carlo V.; Gigliarano, Chiara
  9. Poverty and Well-Being: Panel Evidence from Germany By Andrew E. Clark; Conchita D'Ambrosio; Simone Ghislandi
  10. Do High-Income or Low-Income Immigrants Leave Faster? By Govert Bijwaard; Jackline Wahba
  11. Quo Vadis European Biofuel Policy: The Case of Rapeseed Biodiesel By Gernot Pehnelt; Christoph Vietze
  12. Migration factors among broadband services: Panel data analysis By Shinohar, Sobee; Akematsu, Yuji; Tsuji, Masatsugu
  13. Environmental Protection of Foreign Firms in Germany: Does the country of origin matter? By John P. Weche Geluebcke; Isabella Wedl
  14. Some insights in regulation and potential profitability off passive fiber infrastructure in Europe By Verbrugge, Sofie; Van der Wee, Marlies; Fernandez-Gallardo, Maria; Dobrajs, Kristaps; Pickavet, Mario
  15. Do pay-as-bid auctions favor collusion? - Evidence from Germany’s market for reserve power By Sven Heim; Georg Götz
  16. Tax attractiveness and the location of German-controlled subsidiaries By Keller, Sara; Schanz, Deborah
  17. Youth Vulnerability in Europe during the Great Recession By Arnstein Aassve; Elena Cottini; Agnese Vitali
  18. Working in family firms : less paid but more secure ? Evidence from French matched employer-employee data. By Rebérioux, Antoine; Caroli, Eve; Breda, Thomas; Bassanini, Andrea
  19. Over-indebted Youth: Unemployment and Deleveraging in the Euro Zone By Harald Sander
  20. Members of German Federal Parliament More Risk-Loving than General Population By Moritz Heß; Christian von Scheve; Jürgen Schupp; Gert G. Wagner

  1. By: Jara Tamayo, Holguer Xavier; Tumino, Alberto
    Abstract: In this paper we study the impact of tax-benefit systems on income inequality and work incentivesacross the 27 Member States of the European Union (EU). Using EUROMOD, the EU-wide taxbenefitmicrosimulation model, we disentangle the role of taxes, benefits and social insurancecontributions in influencing country specific Gini coefficients and Marginal Effective Tax Rates.The extent to which tax-benefit systems contribute to income redistribution and provide work incentives at the intensive margin is found to vary considerably across the 27 Member States of the EU. Our results further highlight the presence of a trade-off between income redistribution and work incentives across EU-27 countries.
    Date: 2013–03–28
  2. By: Vivika Halapuu (University of Tartu, Estonia); Tiiu Paas (University of Tartu, Estonia); Tiit Tammaru (University of Tartu, Estonia)
    Abstract: The paper examines the factors that are related to attitudes towards immigrants in Europe, with a particular focus on the role of institutional trust in shaping these attitudes. We go one step further compared to previous studies by investigating separately two different groups of people — members of the ethnic majority and ethnic minority populations in European countries. We use data from the European Social Survey fourth round database for 27 countries. The main finding is that social trust is important for both groups, while trust in institutions is more strongly related to the attitudes among ethnic majorities. Other biggest differences between members of the ethnic minority and majority population are related to type of area where one lives, human capital and economic factors. The first two are more strongly related to the attitudes towards immigrants for the majority populations, while economic factors (especially labour market status) are more important for the minority populations in European countries.
    Keywords: immigration, attitudes, trust in institutions, minority/majority populations
    JEL: J61 J15 C31 P51
    Date: 2013–04
  3. By: Brekke, Kurt R. (Dept. of Economics, Norwegian School of Economics and Business Administration); Dalen, Dag Morten (Department of Economics, Norwegian Business School,); Holmås, Tor Helge (UNI Rokkan Centre)
    Abstract: This paper studies the diffusion of biopharmaceuticals across European countries, focusing on anti-TNF drugs, which are used to treat autoimmune diseases (e.g., rheumatism, psoriasis). We use detailed sales information on the three brands Remicade, Enbrel and Humira for nine European countries covering the period from the fi…rst launch in 2000 until becoming blockbusters in 2009. Descriptive statistics reveal largevariations across countries in per-capita consumption and price levels both overall and at brand level. We explore potential sources for the cross-country consumption differences by estimating several multivariate regression models. Our results show that large parts of the cross-country variation are explained by time-invariant country-speci…c factors (e.g., disease prevalence, demographics, health care system). We also fi…nd that differences in income (GDP per capita) and health spending (share of GDP) explain the cross-country variation in consumption, while relative price differences seem to have limited impact.
    Keywords: Di¤usion; pharmaceuticals; cross-country analysis.
    JEL: I11 L13 O33
    Date: 2013–03–28
  4. By: Levy, Horacio; Matsaganis, Manos; Sutherland, Holly
    Abstract: This paper explores the within and between country distributional implications of an illustrative Child Basic Income (CBI) operated at EU level. Using EUROMOD, we establish that a universal payment of 50 per month per child aged under 6 could take 800,000 children in this age group out of poverty. It could be financed by an EU flat tax of 0.2% on all household income, assuming that it would also be taxed nationally as income. Most member states and virtually all families with children aged under 6 would be net gainers. We simulate two versions of EU CBI, with the benefit rate of 50 per month adjusted or not for differences in purchasing power between member states. In general, fiscal flows between member states, and also poverty reduction, would be smaller under the adjusted version. The political feasibility of such a scheme might be questioned, especially within the net contributor countries. Nevertheless, for those seeking ways to strengthen solidarity across national boundaries, a scheme supporting the incomes of families with young children, wherever in the EU they might reside could be a demonstration of the EUs commitment to children, to the future (EC 2012a: 62).
    Date: 2013–03–28
  5. By: Andrea Garnero; François Rycx
    Abstract: We estimate the impact of workforce diversity on productivity, wages and productivity-wage gaps (i.e. profits) using detailed Belgian linked employer-employee panel data. Findings, robust to a large set of covariates, specifications and econometric issues, show that educational (age) diversity is beneficial (harmful) for firm productivity and wages. The consequences of gender diversity are found to depend on the technological/knowledge environment of firms. While gender diversity generates significant gains in high-tech/knowledge intensive sectors, the opposite result is obtained in more traditional industries. Overall, findings do not point to sizeable productivity-wage gaps except for age diversity.
    Keywords: Labour diversity; productivity; wages; linked panel data;; GMM
    JEL: D24 J24 J31 M12
    Date: 2013–04–17
  6. By: Sutherland, Holly; Figari, Francesco
    Abstract: This paper aims to provide an introduction to the current state of the art of EUROMOD, the European Union tax-benefit microsimulation model. It explains the original motivations for building a multi-country EU-wide model and summarises its current organisation. It provides an overview of EUROMOD components, covering its policy scope, the input data, the validation process and some technical aspects such as the tax-benefit programming language and the user interface. The paper also reviews some recent applications of EUROMOD and, finally, considers future developments.
    Date: 2013–03–28
  7. By: Annette van den Berg; Yolanda Grift; Arjen van Witteloostuijn; Christophe Boone; Olivier Van der Brempt
    Abstract: In this paper, we contribute to the extant Industrial Relations literature, which is almost completely confined to estimating the effects of worker participation within a single country, by conducting a comparative multi-country study using unique data from the European Company Survey 2009. We compare representation regimes within the European Union. We categorize the EU Member States into five clusters with similar participation characteristics: the Germanic, French, Anglo-Saxon, Scandinavian and transition cluster. Across these clusters, we first estimate the effects of the presence of what we refer to as an information and consultation body on firm performance, measured by economic performance of the establishment as assessed by managers-respondents. Second, we estimate the effects of managerial attitudes on performance, as we assume - and find - that only taking into account the mere presence of a worker representation is insufficient, as mutual understandings between management and employee representatives affect the functioning of the employee representation body, and hence firm performance.
    Keywords: employee representation, works councils, firm performance, international comparison, Europe, ECS2009
    JEL: J53 M54
    Date: 2013–04
  8. By: Ceriani, Lidia; Fiorio, Carlo V.; Gigliarano, Chiara
    Abstract: Given the increased availability of survey income data, in this paper we analyse the pros and cons of alternative data sets for static tax-benefit microsimulation in Italy. We focus on all possible alternatives, namely using (a) SHIW or (b) IT-SILC data using a consistent net-to-gross microsimulation model, or IT-SILC data using the gross incomes provided since 2007. Our results suggest that IT-SILC improves in the regional representativeness of the Italian population and does not perform worse than SHIW as for most demographic characteristics, SHIW provides more information regarding building and real estate incomes. Gross income variables simulated by using the net-to-gross module included in the TABEITA microsimulation model and calibrating for tax evasion provide a very precise fit with external statistics, improving on results which could be obtained using the same TABEITA model on SHIW data. Simulated IT-SILC gross income data fit external aggregate data even better than gross income data provided in IT-SILC, which tend to largely overestimate self-employment income. Finally, we suggest to match IT-SILC with SHIW to include in the former the information on building and real estate incomes that are contained
    Date: 2013–03–28
  9. By: Andrew E. Clark (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - École des Hautes Études en Sciences Sociales [EHESS] - Ecole des Ponts ParisTech - Ecole normale supérieure de Paris - ENS Paris - Institut national de la recherche agronomique (INRA)); Conchita D'Ambrosio (Universita' di Milano-Bicocca - Universita' di Milano-Bicocca, DIW - Deutsches Institut für Wirtschaftsforschung - German Institute for Economic Research, Econpubblica - Università commerciale Luigi Bocconi); Simone Ghislandi (Econpubblica - Università commerciale Luigi Bocconi, Università commerciale Luigi Bocconi - Università commerciale Luigi Bocconi)
    Abstract: We consider the link between poverty and subjective well-being, and focus in particular on the role of time. We use panel data on 42,500 individuals living in Germany from 1992 to 2010 to uncover four empirical relationships. First, life satisfaction falls with both the incidence and intensity of contemporaneous poverty. There is no evidence of adaptation within a poverty spell: poverty starts bad and stays bad in terms of subjective well-being. Third, poverty scars: those who have been poor in the past report lower life satisfaction today, even when out of poverty. Last, the order of poverty spells matters: for a given number of poverty spells, satisfaction is lower when the spells are concatenated: poverty persistence reduces well-being. These effects differ by population subgroups.
    Keywords: Income ; Poverty ; Subjective well-being ; SOEP
    Date: 2013–04
  10. By: Govert Bijwaard (Netherlands Interdisciplinary Demographic Institute (NIDI) and IZA Bonn); Jackline Wahba (University of Southampton and IZA Bonn)
    Abstract: We estimate the impact of the income earned in the host country on return migration of labour migrants from developing countries. We use a three-state correlated competing risks model to account for the strong dependence of labour market status and the income earned. Our analysis is based on administrative panel data of recent labour immigrants from developing countries to the Netherlands. The empirical results show that intensities of return migration are U-shaped with respect to migrants’ income, implying a higher intensity in low- and high- income groups. Indeed, the lowest-income group has the highest probability of return. We also find that ignoring the interdependence of labour market status and the income earned leads to underestimating the impact of low income and overestimating the impact of high income.
    Keywords: migration dynamics; labour market transitions; competing risks; immigrant assimilation;
    JEL: F22 J61 C41
    Date: 2013–04
  11. By: Gernot Pehnelt (GlobEcon and Friedrich-Schiller-University of Jena); Christoph Vietze (School of Economics and Business Administration, Friedrich-Schiller-University Jena)
    Abstract: The European Union's (EU) Renewable Energy Directive (RED) continues to be the focus of much debate over the validity of biofuel sustainability. The debate is driven in part by ongoing concerns of transparency and regional variations of emissions from feedstock cultivation and processing. In a working paper, Pehnelt and Vietze (2012) undertook a general analysis of rapeseed biodiesel greenhouse gas (GHG) savings. In light of the recent effort to decentralize assessments to regional (i.e. Member State) authorities to assess the sustainability of biofuel feedstocks, we have done the same for three Member States, incorporating the comments and critique we received on our latest working paper (Pehnelt and Vietze 2012). Using publicly available cultivation and production figures from Germany (the largest producer and consumer of rapeseed biodiesel), Poland and Romania, we analyse the greenhouse gas (GHG) emissions savings of rapeseed biodiesel which we then compare to the values of GHG savings identified in the RED. Under average conditions and conservative assumptions on N2O emissions, German rapeseed biodiesel meets the GHG savings requirements of 35 percent in the RED. However, in years with unfavourable weather conditions and lower yields, German rapeseed biodiesel may fail to reach the 35 percent threshold even with efficient production technologies in the subsequent steps of the supply chain. Taking into account higher N2O emissions due to fertilizer input as suggested by some researchers, German rapeseed biodiesel clearly fails to fulfil the 35 percent criterion required by the RED. Meanwhile, in no instance Polish or Romanian rapeseed biodiesel meet the RED's 35% GHG savings threshold. The assessment of the sustainability of rapeseed biodiesel heavily depends on the very production conditions and assumptions regarding the N2O field emissions. As a matter of fact, not every liter of rapeseed biodiesel produced in the EU is 'sustainable' in the sense of RED. Therefore, the use of standard values (e.g. default values) in order to categorize rapeseed biodiesel - or any other biofuel - as sustainable or not is not justifiable. With renewable energy strategies proliferating throughout the world, the validity of technical criteria has become increasingly critical to the success of these strategies - particularly the fiercely debated RED. The application of technical criteria remains inconsistent, and in the case of the RED, resulting in unreliable assessments of biofuel feedstocks and heated debates over the authority of these assessments.
    Keywords: Biofuel, Rapeseed, Biodiesel, RED, Renewable Energy Directive, Default Values, Typical Values, GHG-emissions
    JEL: F14 F18 O13 Q01 Q15 Q27 Q56 Q57
    Date: 2013–04–19
  12. By: Shinohar, Sobee; Akematsu, Yuji; Tsuji, Masatsugu
    Abstract: Providing nationwide deployment of broadband services has become an important national agenda. The U.S. announced a National Broadband Plan and EU a Digital Agenda for Europe, both of which aim at providing access to 100 Mbps broadband services by 2020 to substantial numbers of households. The purpose of this paper is to analyze the migration factors among broadband services, namely CATV (BB), DSL and FTTx, in OECD 30 countries. In so doing, we focus especially on migration from CATV (BB) and DSL to FTTx in OECD 30 countries. Since FTTx is not independent of other two competing broadband services, not only FTTx but also CATV (BB) and DSL are analyzed. The results obtained by empirical panel data analysis, which covers the data from the year 2000 to 2010, revealed that (1) each three broadband services are substitutes, (2) faster connection speed promotes each broadband services adoption, (3) initial conditions of Cable TV in 2000 promote CATV (BB) diffusion, (4) unbundling of dry copper promotes DSL diffusion, (5) unbundling of fiber local loop restricts FTTx diffusion, and (6) investment decision on FTTx by carriers affects FTTx diffusion. This analysis will provide an important basis for national broadband policy in each country. --
    Date: 2012
  13. By: John P. Weche Geluebcke (Institute of Economics, Leuphana University Lueneburg, Germany); Isabella Wedl (Institute for Environmental Communication, Leuphana University Lueneburg, Germany)
    Abstract: Only recently have the aspects of pollution and environmental protection entered into the empirical literature about international firm activities. The present paper is the first firm-level study on the link between foreign ownership and environmental protection in Germany. We find that, ceteris paribus, foreign owned firms in Germany are more likely to invest in environmental protection. They also invest on a larger scale in terms of add-on measures as well as integrated measures. These results are robust against different measures, different time periods, different control groups, and selection issues arising from fractional response data. Once we control for productivity levels, the differences become less straightforward. However, the higher probability of foreign firms' making general as well as integrated environmental protection investments and the tilt of their composition towards integrated measures remain. We cannot find any support for differences among foreign firms by country of origin. This can be interpreted as support for the new institutionalist hypothesis of international convergence of management practices in the field of environmental management due to normative pressure and de facto standards at the global level.
    Keywords: Environmental protection; foreign ownership; country of origin; multinational enterprises; manufacturing; Germany
    JEL: F21 Q52 Q55 Q56
    Date: 2013–04
  14. By: Verbrugge, Sofie; Van der Wee, Marlies; Fernandez-Gallardo, Maria; Dobrajs, Kristaps; Pickavet, Mario
    Abstract: In 2010, the European Commission has formulated some clear objectives to come to one single European telecommunications market by 2020 in its Digital Agenda. These objectives require large investments in new infrastructure. Optical access networks can cope with the high bandwidth required by future applications, but their deployment to the end user involves high road and construction works and costs, which seem only affordable in densely populated areas. Therefore, other investment paths and possible regulatory interventions should be explored. This paper describes a cost-benefit model, developed within the European research project OASE, for the deployment of a dark fiber infrastructure. The model is applied to specific scenarios, which are constituted of the area type (dense urban/ urban/rural), demand uptake (conservative/ likely/ aggressive) and revenue scheme. The quantitative analysis performed indicates that the business case is in most cases not economically viable. Therefore, as a second step, the paper investigates possibilities and opportunities to improve the business case of the PIP, for instance by prolonging the planning horizon, ensuring revenue from the start of the project by performing demand aggregation or examining where public funds might help. --
    Keywords: Next-Generation Access Networks,Passive Infrastructure,European regulatory policy,cost-benefit analysis
    Date: 2012
  15. By: Sven Heim (ZEW, University of Giessen); Georg Götz (University of Giessen)
    Abstract: We analyze a drastic price increase in the German auction market for reserve power, which did not appear to be driven by increased costs. Studying the market structure and individual bidding strategies, we find evidence for collusive behavior in an environment with repeated auctions, pivotal suppliers and inelastic demand. The price increase can be traced back to an abuse of the auction’s pay-as-bid mechanism by the two largest firms. In contrast to theoretical findings, we show that pay-as-bid auctions do not necessarily reduce incentives for strategic capacity withholding and collusive behavior, but can even increase them.
    Keywords: Auctions, Collusion, Market Power, Energy Markets, Reserve Power, Balancing Power
    JEL: D43 D44 L11 L13
    Date: 2013
  16. By: Keller, Sara; Schanz, Deborah
    Abstract: This paper analyzes whether taxation has an influence on the location decisions of multinational enterprises. As a tax measure, we employ the Tax Attractiveness Index (see Keller and Schanz 2013). This index covers 18 different tax factors, such as the taxation of dividends and capital gains, withholding taxes, the existence of a group taxation regime, and thin capitalization rules. Our count data regression analysis is based on a novel hand-collected data set consisting of the subsidiaries of German DAX30 companies. Controlling for non-tax effects, we find that a country's tax environment as measured by the Tax Attractiveness Index has a significantly positive effect on the number of Germancontrolled subsidiaries located there. Hence, our study implies that location decisions depend on a bundle of tax factors as captured by the index. In a second step, we show that the location decisions of German DAX30 companies cannot be explained by the statutory tax rate alone. In contrast, withholding taxes, double treaty networks, and special holding regimes seem to play a decisive role in location decisions. Previous studies examining only the influence of statutory tax rates may thus have underestimated the effects of taxation on the activities of multinational companies. --
    Keywords: tax attractiveness,location decision,multinational enterprise,count data model
    Date: 2013
  17. By: Arnstein Aassve; Elena Cottini; Agnese Vitali
    Abstract: The paper gives an update to earlier analysis considering youth poverty and transition to adulthood, which is timely given the economic crisis engulfing many countries in Europe. Whereas, the crisis is affecting young people in particular, there is also huge variation across Europe. We document the short-term consequences of the current recession on the transition to adulthood of young Europeans, focusing on two main cornerstones in the transition to adulthood: economic independence and residential autonomy. We show an almost universal increase in financial hardship experienced by young adults during the recession, which is starting to translate into higher rates of co-residence with parents, hence delaying the process of leaving home and gaining economic independence. The economic recession will have a huge impact on young people and their the transition to adulthood. Economic deprivation and uncertainty will most likely delay the key markers of transition to adulthood.
    Keywords: transition to adulthood, poverty, deprivation, crisis
    Date: 2013–03
  18. By: Rebérioux, Antoine; Caroli, Eve; Breda, Thomas; Bassanini, Andrea
    Abstract: Nous étudions les systèmes de rémunérations en vigueur dans les entreprises familiales. Sur la base de données employeurs-salariés appariées portant sur un échantillon d'établissements français dans les années 2000, nous montrons dans un premier temps que les entreprises familiales versent des salaires plus faibles que les entreprises non familiales. Cet écart de salaires est robuste à l'introduction d'une série de contrôles portant sur les caractéristiques des établissements et des salariés. De plus, il n'apparaît pas dû à l'écart de productivité existant entre entreprises familiales et non familiales, ni à une éventuelle hétérogénéité inobservée entre établissements ou salariés. Par ailleurs, l'écart de salaires entre entreprises familiales et non familiales est relativement homogène entre hommes et femmes et entre salariés ayant des niveaux d'éducation différents. En revanche, il est plus important pour les CSP inférieures (ouvriers et employés) que pour les CSP supérieures (techniciens, contremaîtres et cadres) pour lesquelles il n'est par ailleurs pas significatif. Dans un second temps, nous nous interrogeons sur les raisons pour lesquelles les salariés restent dans les entreprises familiales si les salaires y sont plus faibles. Nous montrons que la sécurité de l'emploi y est plus élevée. Le taux de licenciement apparaît ainsi plus faible dans les entreprises familiales que dans les non familiales. Nous montrons également que les entreprises familiales ont moins recours aux licenciements et plus aux réductions d'emploi quand elles font face à un choc négatif sur leur niveau d'emploi. Ces résultats sont confirmés par ceux que l'on obtient sur données subjectives : le risque de licenciement perçu par les salariés est plus faible dans les entreprises familiales que dans les non familiales. Nous conjecturons que nos résultats sont compatibles avec deux types d'explications : un modèle de différences compensatrices de salaires et un modèle dans lequel les salariés s'auto-sélectionnent dans les entreprises familiales ou non sur la base de leurs préférences.
    Abstract: We study the compensation package offered by family firms. Using matched employer-employee data for a sample of French establishments in the 2000s, we first show that family firms pay on average lower wages to their workers. This family/non-family wage gap is robust to controlling for several establishment and individual characteristics and does not appear to be due either to the differential of productivity between family and non-family firms or to unobserved establishment and individual heterogeneity. Moreover, it is relatively homogeneous across workers with different gender, educational attainment and age. By contrast, the family/non-family wage gap is found to be larger for clerks and blue-collar workers than for managers, supervisors and technicians, for whom we find no significant wage gap. As a second step, we investigate why workers stay in family firms while being paid less. We show that these firms offer greater job security. We find evidence that the rate of dismissal is lower in family than in non-family firms. We also show that family firms rely less on dismissals and more on hiring reductions when they downsize. These results are confirmed by subjective data : the perceived risk of dismissal is significantly lower in family firms than in non-family ones. We speculate that our results can be explained either by a compensating wage differential story or by a model in which workers sort in different firms according to their preferences.
    Keywords: Family firms; wages; job security; linked employer-employee data;
    JEL: G34 J31 J33 J63 L26
    Date: 2013–04
  19. By: Harald Sander (Maastricht School of Management & Institute of Global Business & Society, Cologne University of Applied Sciences)
    Abstract: This paper looks at the Euro-zone crisis from the point of view of the Euro-zone youth. Young people in many Euro-zone countries are today confronted with high and persistent unemployment with potentially long-lasting “scarring effects” compromising their present and future well-being. While lower and sustainable public debts are desirable from the point of view of inter-generational justice, it is argued that this objective cannot be achieved by means of front-loaded austerity policies. With long-term negative consequences of short-term austerity it is shown that not only social consideration but also the underlying public debt dynamics in the presence of scarring and other hysteresis effects make a strong case for a gradual growth-oriented approach to deleveraging that carefully aims at balancing short- and long-term costs and benefits while protecting vulnerable young people.
    Keywords: Youth unemployment, scarring effects, hysteresis, debt deleveraging, European Monetary Union, financial crisis
    JEL: E6 F4 H63 J4
    Date: 2012–09
  20. By: Moritz Heß; Christian von Scheve; Jürgen Schupp; Gert G. Wagner
    Abstract: The article analyzes the question of whether career politicians differ systematically from the general population in terms of their attitudes toward risk. A written survey of members of the 17th German Bundestag in late 2011 identified their risk attitudes, and the survey data was set in relation to respondents to the German Socio-Economic Panel Study (SOEP) for the survey year 2009 (2002 through 2012). Compared with the population surveyed in the SOEP, members of the German parliament display a considerably higher general risk appe-tite, which is highly significant. For different areas of risk, last surveyed in the SOEP in 2009, the members of parliament had significantly stronger risk-loving attitudes across vir-tually all indicators and risk categories surveyed than the comparison groups of SOEP re-spondents.
    Keywords: political decision-making, risk aversion, German parliament, SOEP
    JEL: D71 D78 H11 H70 P16 Z13
    Date: 2013

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