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on Microeconomic European Issues |
| By: | Aranki, Ted; Macchiarelli, Corrado |
| Abstract: | The decision to cease working is traditionally influenced by a wide set of socio-economic and environmental variables. In this paper, we study transitions out of work for 26 EU countries over the period 2004-2009 in order to investigate the determinants of retirement based on the Eurostat Survey on Income and Living Conditions (EU-SILC). Applying standard survivor analysis tools to describe exits into retirement, we do not find any significant differences in the patterns into retirement between the average euro area and EU non-euro area countries. Moreover, we find that shifts into retirement have increased during the onset of the 2009 economic and financial crisis. Income, together with flexible working arrangements, is found to be important as regards early retirement decisions, compared to retiring beyond the legal retirement age. Finally, we show that institutional measures (such as, state/health benefits, minimum retirement age) could not be sufficient alone if individuals withdraw earlier from the labour market due to a weakening of their health. Especially, these latter results are of importance for structural and macroeconomic policy, for instance, in increasing the employment of both people and hours worked against the background of population ageing. JEL Classification: J14, J26, C41 |
| Keywords: | ageing population, Cox regressions, duration analysis, EU countries, hazard model, Retirement |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20131517&r=eur |
| By: | Jan Hanousek (CERGE-EI); Evžen Kočenda |
| Abstract: | We analyze how a set of traditional as well as new determinants affect trade among European countries over the period 1992–2008. The factors encompass variables from the areas of geography, culture, institutions, infrastructure, and trade direction. Trade is analyzed for three types of goods: primary goods, parts and components, and capital goods. For each type of good we also distinguish its definiti on in terms of flows, intensive margin, and extensive margin. Methodologically we first derive country-pair fixed effects over all possible pairs of export-import partners, and in the second stage we relate fixed effects with a set of influential factors. We show (i) the intuitive and varying effects of geographical, cultural, and institutional factors, (ii) the beneficial effects of soft and hard infrastructure, and (iii) the key importance of the trade between old and new EU members. |
| Keywords: | bilateral trade, factors of trade, panel data, European Union |
| JEL: | F14 F16 L24 |
| Date: | 2013–08 |
| URL: | http://d.repec.org/n?u=RePEc:ost:wpaper:333&r=eur |
| By: | Huber, Martin; Lechner, Michael; Wunsch, Conny |
| Abstract: | In this paper, we assess the impact of firms introducing part-time work schemes for gradual labour market exit of elderly workers on their employees’ labour market outcomes. The analysis is based on unique linked employer-employee data that combine high-quality survey and administrative data. Our results suggest that partial or gradual retirement options offered by firms are an important tool to alleviate the negative effects of low labour market attachment of elderly workers in ageing societies. When combined with financial incentives to hire unemployed or young jobseekers as replacement, they seem to be particularly beneficial, especially when labour market conditions are difficult. Under such circumstances, they can even have positive spill-over effects on younger workers. Firms should thus be encouraged to offer such schemes. |
| Keywords: | part-time work, elderly employees, treatment effects, matching |
| JEL: | J14 J26 C21 |
| Date: | 2013–08 |
| URL: | http://d.repec.org/n?u=RePEc:usg:econwp:2013:16&r=eur |
| By: | Nowotny, Klaus (University of Salzburg) |
| Abstract: | The economic literature provides ample evidence that immigration of highly skilled workers is beneficial for the host economy. Yet, when compared to countries such as the USA or Canada, Europe receives a lower share of migrants with tertiary education, raising concerns that the EU does not attract enough highly skilled migrants. There is, however, considerable heterogeneity in the share of highly-skilled migrants across EU-15 countries which is even more pronounced at the regional level. This paper uses this heterogeneity to investigate the economic, labor market and institutional factors that make regions and countries attractive for highly skilled migrants vis-a-vis low-skill migrants. Controlling for a variety of regional characteristics, the regressions show both similarities and differences in the determinants of location choice between high- and low-skilled migrants and possible directions for migration policy. |
| Keywords: | highly-skilled migration; regional location decisions; institutions; migration policy |
| JEL: | C35 F22 R23 |
| Date: | 2013–08–09 |
| URL: | http://d.repec.org/n?u=RePEc:ris:sbgwpe:2013_003&r=eur |
| By: | Heindl, Peter |
| Abstract: | Fuel poverty may become an increasingly severe problem in developed countries in cases when real prices for fossil fuels increase at high rates or when real energy prices increase due to policies for greenhouse gas abatement. Fuel poverty measurement consists of two largely independent parts, firstly, the definition of an adequate fuel poverty line, and secondly, the application of techniques to measure fuel poverty given some poverty line. This paper reviews options for the definition of fuel poverty lines as well as techniques for fuel poverty measurement. Based on household data from Germany, figures that would result from different fuel poverty lines are derived. Different fuel poverty lines partly yield highly different results with respect to which households are identified as fuel poor. Thus, the choice of the fuel poverty line matters decisively for the resulting fuel poverty assessment. Options for fuel poverty measurement and subgroup comparison in order to identify most vulnerable types of households are discussed in the light of the literature and based on applications to German household data. -- |
| Keywords: | Fuel Poverty,Energy Poverty,Poverty Measurement,Energiearmut |
| JEL: | I32 Q28 Q48 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:13046&r=eur |
| By: | Richard Frensch; Jan Hanousek; Evžen Kočenda |
| Abstract: | Within a higher-dimensional incomplete specialization Heckscher-Ohlin framework, we first develop a gravity model that views bilateral gravity equations as statistical relationships constrained on countries’ multilateral specialization patterns. Second, we test our model empirically by using a uniquely detailed and large European data set. We show that trade in the parts and components of capital goods is driven by supply-side country differences relative to the rest of the world, compatible with models of incomplete specialization and trade. We take our results as evidence of the existence of international production networks in Europe, driven by trade-offs between wages and coordination costs. |
| Keywords: | International trade, gravity model, offshoring, panel data, European Union |
| JEL: | C23 F14 F23 |
| Date: | 2013–03–15 |
| URL: | http://d.repec.org/n?u=RePEc:wdi:papers:2013-1044&r=eur |
| By: | Corbo, Vesna; Osbat, Chiara |
| Abstract: | We estimate the elasticity of substitution of a country’s imports, and that of its exports on the world market, for EU countries using sector level trade data. We present a new empirical strategy based on the identification scheme by Feenstra (1994), which enables the estimation of elasticities from data on exports. Moreover, our use of bootstrap methods allows us to obtain better elasticity measures, and to better characterize their accuracy. Our results show much heterogeneity in the estimates of the elasticity of substitution across industrial sectors. This, in turn, points to heterogeneity across countries, due to different production and trade structures. We obtain aggregate elasticities for the EU27 countries, with a mean of 3.5 for imports and 4.0 for exports, bringing us closer to traditional estimates and bridging the gap between the newer micro data estimates and the more traditional estimates found in the macroeconomic literature. JEL Classification: C23, F14, F47 |
| Keywords: | Aggregation, calibration of macroeconomic models, Elasticity of Substitution, heterogeneity |
| Date: | 2013–04 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20131535&r=eur |
| By: | Daniel Kemptner |
| Abstract: | This paper proposes a dynamic life cycle model of health risks, employment, early retirement, and wealth accumulation in order to analyze the health-related risks of consumption and old age poverty. In particular, the model includes a health process, the interaction between health and employment risks, and an explicit modeling of the German public insurance schemes. I rely on a dynamic programming discrete choice framework and estimate the model using data from the German Socio-Economic Panel. I quantify the health-related life cycle risks by simulating scenarios where health shocks do or do not occur at different points in the life cycle for individuals with differing endowments. Moreover, a policy simulation investigates minimum pension benefits as an insurance against old age poverty. While such a reform raises a concern about an increase in abuse of the early retirement option, the simulations indicate that a means test mitigates the moral hazard problem substantially. |
| Keywords: | Dynamic programming, discrete choice, health, employment, early retirement, consumption, tax and transfer system |
| JEL: | C61 I14 J22 J26 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1320&r=eur |
| By: | Stracca, Livio |
| Abstract: | This paper uses Eurobarometer survey data from 26 EU countries to evaluate whether the general public cares about financial stability and imbalances over and above their effects on key macroeconomic variables such as unemployment and inflation. I confirm previous results in the literature that life satisfaction - a widely used measure of household welfare - negatively depends on the unemployment rate. In addition to previous results in the literature, I establish a strong empirical link between life satisfaction and consumer confidence as measured by the European Commission consumer survey. The main result of the paper is that life satisfaction generally does not systematically depend on a number of measures of financial imbalance based on credit and asset prices once the other macroeconomic controls are included. JEL Classification: E6 |
| Keywords: | Central Bank, Consumer Confidence, Eurobarometer, financial stability, life satisfaction |
| Date: | 2013–05 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20131543&r=eur |
| By: | Antošová, Veronika; Stávková, Jana; Birčiaková, Naďa |
| Abstract: | The paper deals with the relation between the income situation of households in the Czech Republic and economic growth. The monitoring covers a period of 2005–2010, i.e. a period of a relatively high economic growth and a beginning economic crisis. The period has been chosen based on the available dataset from a survey of the income situation of households and their living conditions - project EU-SILC (European Union Statistics on Income and Living Conditions) - using a unified EU methodology. The income situation of inhabitants has been evaluated from the perspectives of its level and its differentiation. The used indicators were the mean disposable income per a household member, a decile distribution of income, the Gini coefficient for the measurement of income disparities, the poverty threshold and the depth of poverty. The results show that in the years of economic growth, i.e. 2005, 2006, and 2007, indicators of income situation displayed a positive trend – the mean disposable income per a household member increased including the median income situation, the number of households at risk of poverty decreased – in 2008 the proportion of Czech households at risk of poverty achieved the lowest percentage of all EU countries, i.e. 5.56%. The beginning economic recession in 2008 can be observed in the values of macroeconomic indicators. The changes in the income situation of households started to be more markedly manifested as late as in 2010, besides the decrease in the final consumption of households, there was a change in the interannual growth of the mean income of households and an increase in the number of households at risk of poverty. The conclusions prove an up to two-year delay of the impacts of the economic development of the society on the living conditions of households. |
| Keywords: | income situation of households, income disparities, economic development, EU-SILC, risk of poverty |
| JEL: | I3 I32 O10 |
| Date: | 2013–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:48778&r=eur |
| By: | Nick, Sebastian (Energiewirtschaftliches Institut an der Universitaet zu Koeln) |
| Abstract: | In this study, the informational efficiency of the European natural gas market is analyzed by empirically investigating price formation and arbitrage efficiency between spot and futures markets. Econometric approaches are specified that explicitly account for nonlinearities and the low liquidity-framework of the considered gas hubs. The empirical results reveal that price discovery takes place on the futures market, while the spot price subsequently follows the futures market price. Furthermore, there is empirical evidence of significant market frictions hampering intertemporal arbitrage. UK’s NBP seems to be the hub at which arbitrage opportunities are exhausted most efficiently, although there is convergence in the degree of intertemporal arbitrage efficiency over time at the hubs investigated. |
| Keywords: | natural gas market; informational efficiency; liquidity; nonlinear causality; threshold error correction; Kalman filter |
| JEL: | C58 G14 Q40 Q41 |
| Date: | 2013–08–12 |
| URL: | http://d.repec.org/n?u=RePEc:ris:ewikln:2013_014&r=eur |
| By: | Neil Foster-McGregor (The Vienna Institute for International Economic Studies, wiiw); Robert Stehrer (The Vienna Institute for International Economic Studies, wiiw); Marcel Timmer |
| Abstract: | There has been an ongoing trend towards increasing internationalisation of production over the past two decades or so. This implies that countries become more dependent on demand from foreign countries but also that countries and industries are able to source intermediates from different countries, an activity referred to as ‘offshoring’. Whereas the former aspect means an increasing dependency on foreign markets, the second aspect implies that countries and industries source at lower costs making them more productive and competitive. Using the World Input-Output Database (WIOD) we first provide an overview of these trends over the period 1995-2011 for 40 advanced and emerging countries with a specific focus on the EU as a whole and the individual EU member states. In the second part of the paper we show results from an econometric analysis to explain growth performance, focusing on the impacts of the increasing internationalisation of production. |
| Keywords: | international fragmentation of production, growth, employment, trade |
| JEL: | E20 F15 F43 |
| Date: | 2013–05 |
| URL: | http://d.repec.org/n?u=RePEc:wii:rpaper:rr:387&r=eur |
| By: | Hasan, Iftekhar; De Renzis, Tania; Schmiedel, Heiko |
| Abstract: | This paper examines the fundamental relationship between retail payments and the real economy. Using data from across 27 European markets over the period 1995-2009, the results confirm that migration to efficient electronic retail payments stimulates the overall economy, consumption and trade. Among different payment instruments, this relationship is strongest for card payments, followed by credit transfers. Cheque payments are found to have a relatively low macroeconomic impact. Retail payment transaction technology itself is also associated positively to real economic aggregates. We also show that initiatives to integrate and harmonise retail payment markets foster trade and consumption and thereby have a beneficial effect for whole economy. Additionally, the findings reveal that the impact of retail payments on the real economy is more pronounced in euro area countries. Our findings are robust to different regression specifications. The study supports the adoption of policies promoting a swift migration to efficient and harmonised electronic payment instruments. JEL Classification: G20, G21 |
| Keywords: | Financial Development, Real economy, Retail payments |
| Date: | 2013–08 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20131572&r=eur |
| By: | Janger, Jürgen (Austrian Institute of Economic Research); Nowotny, Klaus (University of Salzburg) |
| Abstract: | Based on a unique survey, we conduct a stated choice experiment to examine the determinants of career choice in academia. Both early and later stage researchers value a balance between teaching and research, appropriate salaries, working with high-quality peers and good availability of external grants. Attractive academic jobs for early stage researchers feature in addition a combination of early independence and career (tenure) perspectives; later stage researchers favour jobs which make it easy to take up new lines of research, which pay according to a public scheme including a performance element and where research funding is provided by the university. Our findings have important implications for the structure of academic careers and for the organisational design of research universities. Furthermore, they shed light on the institutional determinants of the asymmetric mobility of highly talented scientists between the EU and the U. S. |
| Keywords: | academic careers; academic labour market; university organisation; brain drain |
| JEL: | I23 I25 I28 |
| Date: | 2013–08–14 |
| URL: | http://d.repec.org/n?u=RePEc:ris:sbgwpe:2013_004&r=eur |
| By: | Balazs Egert |
| Abstract: | Taxes and cash transfers reduce income inequality more in France than elsewhere in the OECD, because of the large size of the flows involved. But the system is complex overall. Its effectiveness could be enhanced in many ways, for example so as to achieve the same amount of redistribution at lower cost. The French tax code should be simplified and changed less frequently. High statutory rates are coupled with a wide range of effective tax rates resulting from a multitude of tax expenditures. There is a need for base broadening combined with lower rates throughout the system, including VAT. The tax wedge on labour is high, except at the bottom of the wage distribution, which can reduce worker participation and job offers. Greater neutrality both across different capital asset classes but also within specific taxes, and shifting taxes from labour and capital inputs to environmental and property taxes would improve economic outcomes. Likewise, the system of social and family benefits should be simplified to enhance transparency and consistency. Eliminating schemes that let people leave the labour market early, abolishing the pension privileges of specific occupational groups and internalising the costs of survivors’ pension benefits would increase fairness while at the same time generating savings. Better labour-market performance would result from increasing job-search incentives and shortening the parental leave allowance. This Working Paper relates to the 2013 OECD Economic Review of France (www.oecd.org/eco/surveys/France). |
| Keywords: | taxation; cash transfers; income inequality; redistribution |
| JEL: | D30 H20 H30 H50 H55 H70 J20 J30 |
| Date: | 2013–04–15 |
| URL: | http://d.repec.org/n?u=RePEc:wdi:papers:2013-1047&r=eur |
| By: | Angelini, Elena; Dieppe, Alistair; Pierluigi, Beatrice |
| Abstract: | In this paper we show that higher flexibility, measured by lower wage and price mark-ups leads to reduced inflationary pressures, increase in competitiveness, and higher output. A rational expectation and a learning version of the ECB’s New Multi-Country Model are used to understand plausible dynamics of labour cost and price adjustments. In the rational expectation version of the model gains are quicker but more short-lived than in a learning environment. We argue that a rational expectation model appears appropriate to describe the abrupt wage adjustment which took place in the Baltic States. By contrast, a learning model appears better suited to capture the gradual wage adjustment of Germany during the 2000s and the one that started in Spain and Italy after the 2008-09 crisis. In fact, in view of implementation lags and the need to change institutions, in the above countries the adjustment should be expected to deliver output gains less quickly than in the Baltic States. In this paper we use the linked version of the model to evaluate the aggregate impact of the imposed shocks as well as possible spillover effects within the euro area. All in all, spillover effects are relatively small. JEL Classification: E24, E27, E30, E37, J30 |
| Keywords: | competitiveness, nominal adjustment in a monetary union, price and wage mark-ups, rational and learning expectations, Unit labour costs |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20131512&r=eur |
| By: | Oliver Röhn; Rauf Gönenç; Christian Beer; Romina Boarini |
| Abstract: | Austria enjoys strong material well-being and high quality of life. Steady convergence with top GDP per capita levels translated into decisive improvements in household disposable incomes while significant redistribution has ensured low income inequality and poverty. This has been combined with gains in leisure time, especially time spent in retirement, low unemployment, high environmental standards, rising life expectancy, a well-functioning social support network and high subjective well-being. This performance was achieved with a unique combination of supportive conditions for a dynamic business sector, priority for family based care, a wide supply of public services, and a well-functioning social partnership. Particularly remarkable for a small open economy has been the degree of stability, which may have contributed to Austria’s high quality of life. However, a number of weaknesses also exist. Older, unskilled and in particular people with migrant background, have lower labour market attachments. Outcomes in education and health care are subject to inequalities. Family services are still mainly carried out by women, who have closed the gap in education attainment with men but face tensions between work and family responsibilities and a high wage gap. The gaps experienced by people with migrant background are in several dimensions larger than in the average OECD country. This Working Paper relates to the 2013 OECD Economic Survey of Austria (http://www.oecd.org/eco/surveys/austria-2013.htm).<P>En Autriche, le bien-être ne se limite pas au PIB<BR>En Autriche, le bien-être matériel et la qualité de vie sont élevés. Un mouvement constant de convergence vers un PIB par habitant élevé a permis une nette amélioration du revenu disponible des ménages. Parallèlement, une redistribution importante a permis que les inégalités de revenu et le taux de pauvreté soient faibles. À cela s’ajoutent une augmentation du temps disponible pour les loisirs, en particulier du temps passé à la retraite, un faible taux de chômage, une bonne qualité de l’environnement, un allongement de l’espérance de vie et un bien-être subjectif élevé. L’Autriche doit ces résultats à un modèle unique en son genre, qui associe des conditions favorables au dynamisme du secteur privé, une priorité accordée à la prise en charge familiale, une offre développée de services publics et un système de partenariat social efficace. Un certain nombre de faiblesses existent cependant. Ainsi, les travailleurs âgés et non qualifiés et, surtout, les personnes issues de l’immigration, sont plus éloignés du marché du travail. On observe des inégalités dans les résultats en matière d’éducation et de santé. Les services aux familles restent dans une large mesure l’apanage des femmes, qui, malgré la résorption de l’écart de niveau d’instruction avec les hommes, rencontrent des difficultés à concilier vie professionnelle et familiale et sont confrontées à un gros écart de rémunération. Pour plusieurs dimensions du bien-être, les différences entre les personnes issues de l’immigration et le reste de la population sont supérieures à celles observées dans le pays moyen de l’OCDE. Ce Document de travail se rapporte à l’Étude économique de l’OCDE de l’Autriche, 2013 (http://www.oecd.org/eco/surveys/austria -2013.htm). |
| Keywords: | productivity, Austria, well-being, quality of life, family, social partnership, productivité, Autriche, bien-être, qualité de vie, famille, partenariat social |
| JEL: | D31 D60 H40 I31 O52 |
| Date: | 2013–08–05 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:1079-en&r=eur |
| By: | Mario Holzner (The Vienna Institute for International Economic Studies, wiiw) |
| Abstract: | Summary This report aims to analyse the regional trade effects of Croatia’s accession to the EU and simultaneous exit from the CEFTA agreement on 1st July 2013. The Global Simulation Model (GSIM) as proposed by Francois and Hall (2003) is being applied. As the change in Croatian tariff protection is rather small, price and output changes for most CEFTA countries are expected to be mostly negligible. Only for Croatia the simulation suggests that overall consumer prices might fall by as much as 0.39% and real output by 0.41%, in the short run. However, it can be expected that EU support funds will offset that loss many times over. The share of Croatian exports to the EU is expected to increase by 2.2 percentage points, while the share of exports to the CEFTA countries and to the rest of the world is expected to drop by 0.7 and 1.5 percentage points, respectively. |
| Keywords: | trade policy simulation, Croatia, EU accession, CEFTA |
| JEL: | F15 F17 P33 |
| Date: | 2013–06 |
| URL: | http://d.repec.org/n?u=RePEc:wii:pnotes:pn:10&r=eur |
| By: | Saldías, Martín |
| Abstract: | In a panel data framework applied to Portfolio Distance-to-Default series of corporate sectors in the euro area, this paper evaluates systemic and idiosyncratic determinants of default risk and examines how distress is transferred in and between the financial and corporate sectors since the early days of the euro. This approach takes into account observed and unobserved common factors and the presence of different degrees of cross-section dependence in the form of economic proximity. This paper contributes to the financial stability literature with a contingent claims approach to a sector-based analysis with a less dominant macro focus while being compatible with existing stress-testing methodologies in the literature. A disaggregated analysis of the different corporate and financial sectors allows for a more detailed assessment of specificities in terms of risk pro file, i.e. heterogeneity of business models, risk exposures and interaction with the rest of the macro environment. JEL Classification: G01, G13, C31, C33 |
| Keywords: | common correlated effects, contingent claims analysis, macro-prudential analysis, Portfolio credit risk measurement |
| Date: | 2013–08 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20131574&r=eur |
| By: | Juillard, M.; Le Bihan, H.; Millard, S. |
| Abstract: | In many countries, wage changes tend to be clustered in the beginning of the year, with wages being set for fixed durations of typically one year. This has been, in particular, documented in recent years for European countries using microeconomic data. Motivated by this evidence we build a model of uneven wage staggering, embedded in a standard DSGE model of the euro area, and investigate the monetary policy consequences of non-synchronised wage-setting. The model has the potential to generate responses to monetary policy shocks that differ according to the timing of the shock. Using a realistic calibration of the seasonality in wage-setting, based on a wide survey of European firms, the quantitative difference across quarters turns out however to be moderate. Relatedly, we obtain that the optimal monetary policy rule does not vary much across quarters. |
| Keywords: | wage-setting, wage-staggering, wage synchronisation, monetary policy shocks, optimal simple monetary policy rules. |
| JEL: | E27 E52 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:bfr:banfra:442&r=eur |