nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2013‒07‒20
twenty papers chosen by
Giuseppe Marotta
University of Modena and Reggio Emilia

  1. Youth Unemployment in Old Europe: The Polar Cases of France and Germany By Cahuc, Pierre; Carcillo, Stéphane; Rinne, Ulf; Zimmermann, Klaus F.
  2. European Integration and Knowledge Flows across European Regions By Cappelli, Riccardo; Montobbio, Fabio
  3. Researchers’ mobility and its impact on scientific productivity" By Fernández-Zubieta, Ana; Geuna, Aldo; Lawson, Cornelia
  4. Migrant Networks and Job Search Outcomes: Evidence from Displaced Workers By Tommaso Colussi
  5. Network Formation: R&D Cooperation Propensity and Timing Among German Laser Source Manufacturers By Muhamed Kudic
  6. Quality of Government and the Returns of Investment: Examining the Impact of Cohesion Expenditure in European Regions By Andrés Rodriguez-Pose; Enrique Garcilazo
  7. Down and out in Italian towns: measuring the impact of economic downturns on crime By Guido de Blasio; Carlo Menon
  8. Economics of Small Wind Power Plants in Urban Settings: An Empirical Investigation for Germany By Grieser, Benno; Madlener, Reinhard; Sunak, Yasin
  9. House Prices, Wealth Effects and Labour Supply By Richard Disney; John Gathergood
  10. Migrant health in Italy: the right and access to healthcare as an opportunity for integration and inclusion By Sabina Nuti; Sara Barsanti
  11. Earnings and Labour Market Volatility in Britain By Cappellari, Lorenzo; Jenkins, Stephen P.
  12. The Role of the 'Equally Efficient Competitor' in the Assessment of Abuse of Dominance By Mandorff, Martin; Sahl, Johan
  13. Hidden power law patterns in the top European football leagues By Sergio, Da Silva; Raul, Matsushita; Eliza, Silveira
  14. The Legacy of Conflict: Regional Deprivation and School Performance in Northern Ireland By Neil T.N. Ferguson; Maren M. Michaelsen
  15. Reputation and Prices on the e-Market:Evidence from a Major French Platform By Jolivet, Grégory; Jullien, Bruno; Postel-Vinay, Fabien
  16. Subjective Life Expectancy and Private Pensions By Bucher-Koenen, Tabea; Kluth, Sebastian
  17. Skill upgrading and exports By Antonio Accetturo; Matteo Bugamelli; Andrea Lamorgese
  18. Reforms in French Public Universities. How does commitment to performance match with commitment to public values? By Stéphanie Chatelain-Ponroy; Christine Musselin; Stéphanie Mignot-Gérard; Samuel Sponem
  19. Men Vote in Mars, Women Vote in Venus: A Survey Experiment in the Field By Galasso, Vincenzo; Nannicini, Tommaso
  20. Marshallian labor market pooling: evidence from Italy By Monica Andini; Guido de Blasio; Gilles Duranton; William C. Strange

  1. By: Cahuc, Pierre (Ecole Polytechnique, Paris); Carcillo, Stéphane (OECD); Rinne, Ulf (IZA); Zimmermann, Klaus F. (IZA and University of Bonn)
    Abstract: France and Germany are two polar cases in the European debate about rising youth unemployment. Similar to what can be observed in Southern European countries, a "lost generation" may arise in France. In stark contrast, youth unemployment has been on continuous decline in Germany for many years, hardly affected by the Great Recession. This paper analyzes the diametrically opposed developments in the two countries to derive policy lessons. As the fundamental differences in youth unemployment are primarily resulting from structural differences in labor policy and in the (vocational) education system, any short-term oriented policies can only have temporary effects. Ultimately, the youth unemployment disease in France and in other European countries has to be cured with structural reforms.
    Keywords: labor policy, labor market institutions, Great Recession, youth unemployment, minimum wages, demographic trends, vocational education and training, employment protection
    JEL: J24 J38 J68
    Date: 2013–07
  2. By: Cappelli, Riccardo; Montobbio, Fabio (University of Turin)
    Abstract: Using data on inventor citations and inventor collaborations, this article analyses changes in geographical patterns of knowledge flows between European regions during the period 1981-2000. It shows that inventor collaborations become less geographically localized, while inventor citations become more localized. The European integration process has a significant effect on reducing barriers to knowledge flows between new and old EU members. For inventor citations, this effect relates only to the EU enlargement of 1995 and is confined to knowledge flows from Austria, Finland and Sweden to old EU members.
    Date: 2013–05
  3. By: Fernández-Zubieta, Ana; Geuna, Aldo; Lawson, Cornelia (University of Turin)
    Abstract: This article analyses the impact of mobility on researchers’ productivity. We address the relationship by developing a theoretical framework based on the job-matching approach for academics and the idea that productivity is driven by capital availability and peer effects. The empirical analysis is based on the entire careers of a sample of 171 UK academic researchers, spanning from 1957 to 2005. We analyse the impact of job changes on post mobility output in 3 and 6 year periods. Contrary to common wisdom, we do not find evidence that mobility per se increases academic performance. Mobility to better departments has a positive but weakly significant impact while downward mobility results in decreasing researchers’ productivity. Once we control for mobility associated with career progress, the results indicate significant strong positive impact for mobility to higher quality department. We estimated a set of alternative specifications of mobility finding evidence of an increase of productivity for mobility from industry to academia but only after an initial negative effect. In most cases mobility is associated with short-term decrease of productivity due to hypothesised adjustment costs.
    Date: 2013–05
  4. By: Tommaso Colussi (Queen Mary, University of London and fRDB)
    Abstract: This paper investigates how the job search outcomes of displaced migrants are affected by the labor market outcomes of past co-workers of the same nationality. For this exercise I use matched employer-employee micro data on the universe of private-sector employees in Italy between 1975 and 2001. The analysis shows that a 10 percentage point increase in the network employment rate raises the re-employment probability within 36 months after job loss by 5.7 percentage points. The paper also sheds light on the different mechanisms generating the social effect and it highlights the role of migrant networks in explaining immigrant segregation.
    Keywords: Migration, Job displacements, Networks
    JEL: J61 J63
    Date: 2013–07
  5. By: Muhamed Kudic
    Abstract: Empirical evidence on the evolution of innovation networks within high-tech industries is still scant. We investigate network formation processes by analyzing the timing of firms to enter R&D cooperations, using data on laser source manufacturers in Germany, 1990-2010. Network measures are constructed from a unique industry database that allows us to track both the formation and the termination of ties. Regression results reveal that a firm's knowledge endowment (and cooperation experience) shortens the duration to first (and consecutive) cooperation events. The previous occupation of strategic network positions is closely related to the establishment of further R&D cooperations at a swift pace. Geographic co-location produces mixed results in our analysis.
    JEL: O32 C41 D85
    Date: 2013–07
  6. By: Andrés Rodriguez-Pose; Enrique Garcilazo
    Abstract: This paper sets out to examine the impact of the quality of local and regional governments on the returns of investment, focusing on the returns of EU structural and cohesion funds. Despite the widespread belief that the quality of government affects the returns of public investments, whether this is effectively the case has seldom been proved. Using primary data on quality of government collected by the Quality of Government Institute, combined with World Bank Global Governance Indicators data, we conduct a two-way fixed effect panel regression model for a total of 169 in European regions during the period 1996 to 2007. The results of the analysis underline the importance of the quality of government both as a direct determinant of economic growth, as well as a moderator of the efficiency of structural and cohesion funds expenditure. Our analysis finds that both EU investments targeting regions and quality of government make a difference for regional economic growth, but that above a significant threshold level of expenditure, the quality of government is the key factor determining the returns of public investment. In many of the regions receiving the bulk of structural funds, greater levels of cohesion expenditure would, in the best case scenario, only lead to a marginal improvement in economic growth, unless the quality of government is significantly enhanced.
    Keywords: investment, European Union, regions, quality of government, regional development and growth
    JEL: O43 R11
    Date: 2013–07–02
  7. By: Guido de Blasio (Bank of Italy); Carlo Menon (OECD)
    Abstract: The paper investigates the effect of local economic conditions on crime. The study focuses on ItalyÂ’s local labor markets and analyzes the short-term response of crime to the severe slump of 2007-2009. It shows that the downturn led to a significant increase in economic-related offenses that do not require particular criminal skills or tools (namely, thefts); on the other hand, for offenses for which specific skills and criminal experience are essential (say, robberies) the impact of the crisis was negative. The results also suggest that: i) labor market institutions (i.e. wage supplementary schemes and pro-worker contractual arrangements) had a role in slowing down the effect of the economy on crime; ii) the link between the downturn and crime was weaker in areas where the presence of organized crime is relatively more intensive.
    Keywords: crime, economic crises, Italy
    JEL: K14 K42 E32
    Date: 2013–07
  8. By: Grieser, Benno (RWTH Aachen University); Madlener, Reinhard (E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN)); Sunak, Yasin (E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN))
    Abstract: In this paper we investigate the location-specific attractiveness of small wind turbines (SWT) for private households. In order to assess the economic viability of an investment in SWT, we analyze a set of scenarios that incorporate different types of SWT, various storage system options, support schemes, and specific urban surroundings for the case of Germany. As urban structures substantially influence local wind speeds, and hence the potential energy yield of a turbine, the potential location of the SWT in the urban area is crucial for the economic feasibility. We find that SWT today are only profitable under very favorable conditions, the most important parameters being prevailing wind speeds and the location’s degree of urbanization. In most cases, the coupling of the SWT to a storage system is crucial for cost-effectiveness. A feed-in tariff system specifically adapted to the SWT technology is found to be an important driver of diffusion. Further research needs are identified in the field of long-term performance and yield projections for SWT. Based on the findings from our study, significant SWT diffusion can be expected, if at all, only in coastal suburban and rural areas.
    Keywords: small wind turbine; energy storage; urban environment; feed-in tariffs
    JEL: O18 Q42 Q48
    Date: 2013–01
  9. By: Richard Disney; John Gathergood
    Abstract: We examine the impact of housing wealth on labour supply using exogenous local variations in house prices and household panel data for Britain. Our analysis controls for variations in local labour demand and income expectations which might co-determine house prices and labour supply. We find significant effects of house price variations on labour supply, consistent with leisure being a normal good. Labour supply is particularly sensitive to house prices among the young and older men. Our findings imply that housing wealth losses may have contributed to the unexpectedly high rates of labour market activity in Britain during the Great Recession.
    Keywords: Labour supply; Wealth effects; House prices JEL codes: E51, E52, F31, F33
    Date: 2013–02
  10. By: Sabina Nuti (Istituto di Management - Scuola Superiore Sant’Anna, Pisa); Sara Barsanti (Istituto di Management - Scuola Superiore Sant’Anna, Pisa)
    Abstract: This paper analyses migrant access to health care through the Italian legal framework and the use of health care services. In both analyses, an underlying gap and critical issues are demonstrated for migrants regarding their knowledge of the health care system as well as the accessibility and use of health services. In particular, immigrants have a lower hospitalisation rate than the native population. However, hospitalisation for some events (i.e., injuries, infectious disease) is higher for migrants than for natives. The results suggest that the health care system is unable to ensure an equitable use of the same services between populations with identical needs (horizontal equity) or accessibility for specific conditions prevalent in the migrant population (vertical equity).Moreover, the main entry point for migrants to the health care system(the maternal pathway and women’s health services)could be the first step for a more comprehensive process of integration and communication. In Italy, the immigrant population is growing and the differences in access to care are demonstrated. Consequently, it is necessary to rethink a possible model of integration and welfare for the migrant population, where access to the healthcare system is not only a desired result but also an opportunity for integration and inclusion.
    Keywords: healthcare performance; performance evaluation system; migrant; equity; integration
    JEL: I18
    Date: 2013–04–01
  11. By: Cappellari, Lorenzo (Università Cattolica del Sacro Cuore); Jenkins, Stephen P. (London School of Economics)
    Abstract: We provide new evidence about earnings and labour market volatility in Britain over the period 1992-2008, and for women as well as men. (Most research about volatility refers to earnings volatility for US men.) We show that earnings volatility declined slightly for both men and women over the period but the changes are not statistically significant. When we look at labour market volatility, i.e. including in the calculations individuals with zero earnings as well as employees with positive earnings, there is a marked and statistically significant decline for both women and men, with the fall greater for men. Using variance decompositions, we show that the fall in labour market volatility is largely accounted for by changes in employment attachment rates. Labour market volatility trends in Britain, and what contributes to them, differ from their US counterparts in several respects.
    Keywords: labour market volatility, earnings volatility, earnings instability, BHPS
    JEL: J31
    Date: 2013–07
  12. By: Mandorff, Martin (Swedish Competition Authority); Sahl, Johan (Swedish Competition Authority)
    Abstract: In a series of recent cases - most notably in TeliaSonera and Post Danmark - the equally efficient competitor principle has been explicitly recognised by the Court of Justice of the EU; more clearly so than by courts in the US, where the principle originates. However the exact scope of application of the principle in the EU remains to be defined. While its use in cases concerning predatory pricing and margin squeeze appears to be settled, it is still unclear to what extent the standard applies to other price-based forms of exclusion. And is the principle at all useful in the assessment of non-price-based exclusionary conduct? This article discusses the conceptual basis for the equally efficient competitor principle, and attempts to define its role in the assessment of exclusionary abuse in the EU.
    Keywords: equally efficient competitor; abuse of dominance; monopolization; exclusion; competition law; competition economics; antitrust
    JEL: K00 K21 L12 L40
    Date: 2013–05–15
  13. By: Sergio, Da Silva; Raul, Matsushita; Eliza, Silveira
    Abstract: Because sports are stylized combat, sports may follow power laws similar to those found for wars, individual clashes, and acts of terrorism. We show this fact for football (soccer) by adjusting power laws that show a close relationship between rank and points won by the clubs participating in the latest seasons of the top fifteen European football leagues. In addition, we use Shannon entropy for gauging league competitive balance. As a result, we are able to rank the leagues according to competitiveness.
    Keywords: Power laws; Wars; Sports; Terrorism; Football; Soccer
    JEL: C16 Y80
    Date: 2013
  14. By: Neil T.N. Ferguson (Stockholm International Peace Research Institute); Maren M. Michaelsen (Ruhr University Bochum)
    Abstract: The relationship between deprivation and educational outcomes has been the subject of a long-running and deep debate in the economic literature. Recent discussions have focused on causality, with experimental and quasi-experimental approaches taken, yet, predominantly, the literature continues to proxy deprivation with measures of wealth. This paper explores a much wider measure and identifies a causal relationship between regional deprivation and school performance in Northern Ireland. Combining panel data on Key Stage II results from each of Northern Ireland's primary schools with the 2005 Northern Ireland Multiple Deprivation Measure, we show the net negative impact of this wider measure, whilst an extension explores the impacts of each single domain. Using an error-component two-stage least squares model, we account for school and neighbourhood selection and the potential endogeneity of our deprivation measure, showing spatial variation in historical violence, which occurred during “The Troubles”, to be a valid instrument for deprivation. Our results confirm the negative impact of deprivation frequently found in the literature but also that, when the impacts of other deprivation domains are accounted for, education and crime deprivation, and not financial deprivation, play a significant role in determining outcomes. This confirms the limitations of using wealth as a proxy for neighbourhood deprivation, whilst suggesting that policies focusing only on income redistribution will be unsuccessful in improving education outcomes of those exposed to deprivation.
    Keywords: Violent Conflict, Regional Deprivation, Human Capital Accumulation, Northern Ireland
    JEL: I24 R23
    Date: 2013–07
  15. By: Jolivet, Grégory (University of Bristol); Jullien, Bruno (TSE,IDEI); Postel-Vinay, Fabien (University of Bristol and Sciences Po)
    Abstract: The broad aim of this paper is to gain some insight into the quantitative importance of reputation in e-commerce. We use an exhaustive data set from one of France’s largest e-commerce platforms,, to estimate a statistical causal effect of a seller’s reputation (and size) on transaction prices for a uniquely large range of product categories (books, CDs, video games or DVDs), product conditions (used or new) and seller types (individual or professional sellers). We go beyond the results currently available in the empirical literature by tackling the issue of seller unobserved heterogeneity and the weak exogeneity of reputation (and size) in price equations. Our results show large-scale empirical evidence of a significant, positive and strong effect of seller reputation on prices
    Date: 2013–07
  16. By: Bucher-Koenen, Tabea; Kluth, Sebastian (Munich Center for the Economics of Aging (MEA))
    Abstract: One important parameter in the decision process when buying a private annuity is individuals' subjective life expectancy, because it directly influences the expected rate of return. We examine the market for private annuities in Germany and evaluate potential selection effects based on subjective life expectancy. First individuals are pessimistic about their life span compared to the official life tables. Second we find a significant selection effect based on subjective life expectancy for women who invest in private annuity contracts - so-called Riester pensions. For men there seems to be no difference in subjective life expectancy by Riester ownership. Comparing the size of this selection effect with the underlying loading in life expectancy charged by the insurance industry shows that the latter appears to be in line for women but very high for men. Our findings have strong policy implications. On the one hand misperceptions about longevity risk might prevent individuals from providing sufficiently for retirement. On the other hand mandated unisex tariffs might especially discourage men from investing in Riester pensions, for them premiums in life expectancy are particularly high compared to subjective expectations.
    JEL: D12 D91 G11
    Date: 2013–05–23
  17. By: Antonio Accetturo (Bank of Italy); Matteo Bugamelli (Bank of Italy); Andrea Lamorgese (Bank of Italy)
    Abstract: This paper analyzes the effects of international trade on the relative demand for skilled workers in Italian local labor markets. We find that exports cause a sizable skill upgrading in the labor force by increasing the average level of education of the workforce and the share of white-collars workers.
    Keywords: international trade, labor demand, schooling, skill composition
    JEL: F12 J23 J24
    Date: 2013–07
  18. By: Stéphanie Chatelain-Ponroy (LIRSA-CRC - Laboratoire Interdisciplinaire de Recherche en Sciences de l'Action - Centre de recherche en comptabilité - Conservatoire National des Arts et Métiers (CNAM) : EA4603); Christine Musselin (CSO - Centre de sociologie des organisations - Sciences Po - CNRS : UMR7116); Stéphanie Mignot-Gérard (IRG - Institut de Recherche en Gestion - Université Paris-Est Créteil Val-de-Marne (UPEC) : EA2354 - Université Paris-Est Marne-la-Vallée (UPEMLV)); Samuel Sponem (HEC Montréal - HEC MONTRÉAL)
    Abstract: NPM reforms that have been led recently in the public sector in many countries strongly emphasize the notion of performance. If the effects of these reforms on the core micro-processes of organizations retained a great deal of attention, few studies examined how these changes transformed the identities of civil servants. By contrast a growing body of "Public Service Motivation" research demonstrates that individuals may have predispositions to work in public institutions or organizations. In other words, civil servants share specific " public values ". As a consequence the incorporation of a culture of performance raises questions about its effects on the identities of public servants within public organizations. It is therefore relevant to ask whether the dissemination of a culture of performance results in less commitment to public values or if they are compatible with one another. In the remainder of the paper, we will address this theoretical issue by exploring the following question: how far can civil servants committed to public values be simultaneously be committed to performance impact in public institutions?
    Keywords: University; Public Service Motivation; performance values; public values
    Date: 2013–07
  19. By: Galasso, Vincenzo (USI Università della Svizzera Italiana); Nannicini, Tommaso (Bocconi University)
    Abstract: This paper investigates the differential response of male and female voters to competitive persuasion in political campaigns. During the 2011 municipal elections in Milan, a sample of eligible voters was randomly divided into three groups. Two were exposed to the same incumbent's campaign but to different opponent's campaigns, with either a positive or a negative tone. The third – control – group received no electoral information. The campaigns were administered online and consisted of a bundle of advertising tools (videos, texts, slogans). Stark gender differences emerge. Negative advertising increases men's turnout, but has no effect on women. Females, however, vote more for the opponent and less for the incumbent when they are exposed to the opponent's positive campaign. Exactly the opposite occurs for males. Additional tests show that our results are not driven by gender identification with the candidate, ideology, or other voter's observable attributes. Effective strategies of persuasive communication should thus take gender into account. Our results may also help to reconcile the conflicting evidence on the effect of negative vs. positive advertising, as the average impact may wash out when aggregated across gender.
    Keywords: gender differences, political campaigns, competitive persuasion
    JEL: D72 J16 M37
    Date: 2013–07
  20. By: Monica Andini (Bank of Italy); Guido de Blasio (Bank of Italy); Gilles Duranton (Wharton School, University of Pennsylvania); William C. Strange (Rotman School of Management, University of Toronto)
    Abstract: This paper employs a unique Italian data source to take a comprehensive approach to labor market pooling. It jointly considers many different aspects of the agglomeration - labor market relationship, including turnover, learning, matching, and hold up. It also considers labor market pooling from the perspective of both workers and firms and across a range of industries. Overall, the paper finds some support for theories of labor market pooling, but the support is weak. Specifically, there is a general positive relationship of turnover to local population density, which is consistent with theories of agglomeration and uncertainty. There is also evidence of on-the-job learning that is consistent with theories of labor pooling, labor poaching, and hold up. In addition, the paper provides evidence consistent with agglomeration improving job matches. However, the labor market pooling gains that we measure are small in magnitude and seem unlikely to account for a substantial share of the agglomeration benefits accruing to Italian workers and firms.
    Keywords: local labor markets, matching, turnover, learning, hold-up, agglomeration
    JEL: R23 J60
    Date: 2013–07

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