nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2013‒08‒31
twenty papers chosen by
Giuseppe Marotta
University of Modena and Reggio Emilia

  1. Has the Quality of Work Improved in the EU-15 between 1995 and 2005? By Nathalie Greenan; Ekaterina Kalugina; Emmanuelle Walkowiak
  2. What active labour market programmes work for immigrants in Europe? A meta-analysis of the evaluation literature By Butschek, Sebastian; Walter, Thomas
  3. Decomposing patterns of emission intensity in the EU and China: how much does trade matter? By di Cosmo, Valeria; Hyland, Marie
  4. Technological Dynamics and Social Capability: US States and European Nations By Jan Fagerberg; Maryann P. Feldman; Martin Srholec
  5. European Capitals of Culture and Life Satisfaction By Lasse Steiner; Bruno S. Frey; Simone Hotz
  6. Immigrants, Household Production and Women's Retirement By Peri, Giovanni; Romiti, Agnese; Rossi, Mariacristina
  7. 1 Open borders, transport links and local labor markets By Åslund, Olof; Engdahl, Mattias
  8. The distributional effects of taxes and transfers under alternative income concepts: the importance of three ‘I’s By Figari, Francesco; Paulus, Alari
  9. Trends in Hours Worked across Countries: Evidence using Micro Data By Nicola Fuchs-Schuendeln; Bettina Brueggemann; Alexander Bick
  10. Poverty and transitions in health By Adena, Maja; Myck, Michal
  11. Distributional Implications of the Crisis in Greece in 2009-2012 By Matsaganis, Manos; Leventi, Chrysa
  12. Determinants to Leave Agriculture and Change Occupational Sector: Evidence from an Enlarged EU By Tocco,Barbara; Bailey, Alastair; Davidova, Sophia
  13. Do first mover advantages for producers of energy efficient appliances exist? The case of refrigerators By Cleff, Thomas; Rennings, Klaus
  14. Survival of Spinoffs and Other Startups: First Evidence for the Private Sector in Germany, 1976-2008 By Fackler, Daniel; Schnabel, Claus
  15. The Research Data Centre of the Centre for European Economic Research (ZEW-FDZ) By Gottschalk, Sandra
  16. Beyond the Labour Income Tax Wedge: The Unemployment-Reducing Effect of Tax Progressivity By Etienne LEHMANN; Claudio LUCIFORA; Simone MORICONI; Bruno VAN DER LINDEN
  17. Information technologies and subjective well-being: Does the internet raise material aspirations? By Lohmann, Steffen
  18. Related Variety and Regional Economic Growth in a Cross-Section of European Urban Regions By Frank Van Oort; Stefan de Geus; Teodora Dogaru
  19. The effect of regulatory scrutiny asymmetric cost pass-through in power wholesale and its end By Mokinski, Frieder; Wölfing, Nikolas
  20. Mismatch unemployment : evidence from Germany 2000-2010 By Bauer, Anja

  1. By: Nathalie Greenan (CEE - Centre d'études de l'emploi - Ministère de l'Enseignement supérieur et Recherche - Ministère du Travail, de l'Emploi et de la Santé, TEPP - Travail, Emploi et Politiques Publiques - CNRS : FR3435 - Université Paris-Est Marne-la-Vallée (UPEMLV)); Ekaterina Kalugina (CEE - Centre d'études de l'emploi - Ministère de l'Enseignement supérieur et Recherche - Ministère du Travail, de l'Emploi et de la Santé, TEPP - Travail, Emploi et Politiques Publiques - CNRS : FR3435 - Université Paris-Est Marne-la-Vallée (UPEMLV), EPEE - Centre d'Etudes des Politiques Economiques - Université d'Evry-Val d'Essonne); Emmanuelle Walkowiak (CEE - Centre d'études de l'emploi - Ministère de l'Enseignement supérieur et Recherche - Ministère du Travail, de l'Emploi et de la Santé, TEPP - Travail, Emploi et Politiques Publiques - CNRS : FR3435 - Université Paris-Est Marne-la-Vallée (UPEMLV), ERUDITE - Equipe de Recherche sur l'Utilisation des Données Individuelles Temporelles en Economie - Université Paris-Est Créteil Val-de-Marne (UPEC) : EA437 - Université Paris-Est Marne-la-Vallée (UPEMLV))
    Abstract: This paper provides a mapping of quality of work and measures its evolution between 1995 and 2005 by using European Working Conditions Surveys. With a multilevel modelling, we assess the sensitivity of observed trends to "composition effects" and "country effects". Results suggest a decreasing trend in the quality of work: working conditions have deteriorated, while work has become more intense and less complex. In Germany and Italy all indicators have worsened while other European countries have more mixed results.
    Keywords: quality of work, quality of working life, working conditions, work intensity, work complexity, European comparison, multilevel modelling
    Date: 2013
  2. By: Butschek, Sebastian; Walter, Thomas
    Abstract: A growing body of programme evaluation literature recognises immigrants as a disadvantaged group on European labour markets and investigates the employment effects of Active Labour Market Pro-grammes (ALMPs) on this subgroup. Using a meta-analysis, we condense 93 estimates from 33 empir-ical studies of the effectiveness of four types of ALMPs employed across Europe to combat immigrant unemployment: training, job search assistance, and subsidised public and private sector employment. We find that only wage subsidies in the private sector can be confidently recommended to European policy-makers. --
    Keywords: immigrants,unemployment,labour market integration,ALMP,evaluation,meta-analysis
    JEL: J15 J61 J68 I38
    Date: 2013
  3. By: di Cosmo, Valeria; Hyland, Marie
    Abstract: This paper uses data from the World Input Output Database (WIOD) to examine channels through which CO2 emissions are embodied within and imported into the European production process. We apply a metric to calculate sectoral emission intensity and thus rank countries and sectors in the EU in terms of their emission intensity, and look at the evolution of patterns of emission intensity in 2005 and in 2009. We use an input-output price model to simulate the effect that a rise in the price of EU-ETS allowances, from $17 to $25 /tonne, would have on the final price of goods in each EU country and sector. We find that all countries in the EU reduced the emission-intensity of their production processes from 2005 to 2009, and we find that the reduction was greatest in those sectors regulated under the ETS. Comparisons of emission intensity between countries show that industries in Central and Eastern Europe are more emission intensive than those of Northern Europe, where industries import emission-intensive goods rather than producing them domestically. Finally we examine the trade in intermediate goods from China into the EU to examine possible increases in carbon leakage from 2005 to 2009. Results show that while emissions embodied in imported intermediate goods have increased from 2005 to 2009, this increase is not limited to, nor particularly notable in, the sectors regulated by the ETS.
    Keywords: CO2 emissions/data/europe/Trade
    Date: 2013–07
  4. By: Jan Fagerberg (Centre for Technology, Innovation and Culture, University of Oslo); Maryann P. Feldman (Department of Public Policy, University of North Carolina); Martin Srholec (CERGE-EI, Economics Institute, Academy of Sciences of the Czech Republic)
    Abstract: This paper analyzes factors shaping technological capabilities in United States and European countries, and shows that the differences between the two continents in this respect are much smaller than commonly assumed. The analysis demonstrates a tendency towards convergence in technological capabilities for the sample as a whole between 1998 and 2008. The results indicate that social capabilities, such as well-developed public knowledge infrastructure, an egalitarian distribution of income, a participatory democracy and prevalence of public safety condition the growth of technological capabilities. Possible effects of other factors, such as agglomeration, urbanization, industrial specialization, migration and knowledge spillovers are also considered. The paper is a revised, updated and shortened version of working paper 20111114 in this series.
    Keywords: innovation, technological capability, social capability, Europe, United States
    Date: 2013–08
  5. By: Lasse Steiner; Bruno S. Frey; Simone Hotz
    Abstract: This paper analyzes whether hosting the most prestigious European cultural event, the European Capital of Culture, has an impact on regional economic development or the life satisfaction of the local population. Concerning the economic impact, we show that European Capitals are hosted in regions with above average GDP per capita, but do not causally affect the economic development in a significant way. Even a positive impact on GDP per capita would not imply a positive impact on individual utility or social welfare of the regional population. Surprisingly, using difference-in-difference estimations, a negative effect on the well-being of the regional population is found during the event. Since no effect is found before the event, reverse causality and positive anticipation can be ruled out. The negative effect during the event might result from dissatisfaction with the high levels of public expenditure, transport disruptions, general overcrowding or an increase in housing prices.
    Keywords: Life Satisfaction; Mega-Events; Culture; European Capital of Culture
    JEL: Z11
    Date: 2013–04
  6. By: Peri, Giovanni (University of California, Davis); Romiti, Agnese (Institute for Employment Research (IAB), Nuremberg); Rossi, Mariacristina (University of Turin)
    Abstract: Women contribute disproportionately to household production, especially in Southern European countries. As a consequence of population aging assistance to elderly parents, rather than child care, has become a prevalent activity in home-production services. Immigrant labor has increasingly become a substitute for women labor in those services. Their presence, therefore, may allow women over 55 to work more outside of the house and retire later. We use a unique database of Italian households to identify the effect of local availability of foreign workers on planned retirement age and labor supply of Italian women. We find that an exogenous increase by one point in the immigrant percentage of the local population increased the planned retirement age of women over 55 by two months relative to similar men. For women with old parents the increase was four months and if they were in low-wealth households the increase was one full year. The same inflow of immigrants also increased the probability that women over 55 work outside the home by nine percentage points, relative to men.
    Keywords: international migration, retirement, labor supply, home production, elderly care
    JEL: J22 J26 F22
    Date: 2013–08
  7. By: Åslund, Olof (Uppsala Center for Labor Studies); Engdahl, Mattias (Uppsala Center for Labor Studies)
    Abstract: We study the labor market impact of opening borders to low-wage countries. The analysis exploits time and regional variation provided by the 2004 EU enlargement in combination with transport links to Sweden from the new member states. The results suggest an adverse impact on earnings of present workers in the order of 1 percent in areas close to pre-existing ferry lines. The effects are present in most segments of the labor market but tend to be greater in groups with weaker positions. The impact is also clearer in industries which have received more workers from the new member states, and for which across-the-border work is likely to be more common. There is no robust evidence on an impact on employment or wages. At least part of the effects is likely due to channels other than the ones typically considered in the literature.
    Keywords: migration policy; immigration; labor market outcomes
    JEL: J16 J31 J61
    Date: 2013–04–24
  8. By: Figari, Francesco; Paulus, Alari
    Abstract: This paper investigates how the distribution of income changes when the standard definition of disposable income is replaced by an extended income concept which takes into account the three Is: indirect taxes, imputed rent, and in-kind benefits. Second, it assesses how sensitive the distributional effects of each tax-benefit instrument are to the choice of income concept. The analysis covers three European countries (Belgium, Greece and the UK) characterised by substantially different tax-benefit systems, giving a stronger base for generalising the results. The main findings are that the overall redistributive effect of the tax-benefit systems depends heavily on the income concept considered and the differences across countries are smaller when considering the extended income distribution. Moreover, the common use of a narrower income concept, such as the disposable income, can lead to the overestimation of the redistributive effect of the cash tax-benefit instruments (in relative terms), the extent of this varying across countries, due to the size and distribution of three Is and the adoption of the needs-adjusted equivalence scale.
    Date: 2013–08–22
  9. By: Nicola Fuchs-Schuendeln (Goethe University Frankfurt); Bettina Brueggemann (Goethe University Frankfurt); Alexander Bick (Arizona State University)
    Abstract: We use three different micro data sets, the European Labor Force Survey, the Current Population Survey, and the German Microcensus, to obtain annual hours worked for various demographic subgroups in the US and 18 European countries. One major difficulty in constructing annual hours from micro data sets is the fact that hours are only reported for selected reference weeks, which are not distributed evenly over the year. As a consequence, hours lost due to public holidays or annual leave are mis-measured. Consequently, we use external data sources to account for these hours. We compare the generated time series of aggregate annual hours worked to the data series provided by the OECD and the Conference Board. In 29 out of 38 cases, average deviations amount to less than 10 percent, in 20 out of 38 cases to less than 5 percent. It is worthwhile pointing out that there are also non-negligible differences between the OECD and the Conference Board. We also decompose hours worked in an intensive and an extensive margin, and compare both to OECD and Conference Board data, as well as checking internal consistency of different possible extensive margin definitions. Finally, we document a set of stylized facts on hours worked (conditional on working and unconditional) over time and across countries for different demographic subgroups distinguished by marital status, gender, and age.
    Date: 2013
  10. By: Adena, Maja; Myck, Michal
    Abstract: Using a sample of Europeans aged 50+ from twelve countries in the Survey of Health, Ageing and Retirement in Europe (SHARE) we analyse the role of poor material conditions as a determinant of changes in health over a four-year period. We find that poverty defined with respect to relative incomes has no effect on changes in health. However, broader measures of poor material conditions such as subjective poverty or low relative value of wealth significantly increase the probability of transition to poor health among the healthy and reduce the chance of recovery from poor health over the time interval analysed. In addition to this the subjective measure of poverty has a significant effect on mortality, increasing it by 40.3% among men and by 58.3% among those aged 50-64. Material conditions matter for health among older people. We suggest that if monitoring of poverty in old age and corresponding policy targets are to focus on the relevant measures, they should take into account broader definitions of poverty than those based only on relative incomes. -- Wir untersuchen den Einfluss materieller Umstände auf die Gesundheit der Bevölkerung 50+ in Europa. Dafür analysieren wir die Ergebnisse des Survey of Health, Ageing and Retirement in Europe (SHARE), einer repräsentativen Befragung von Personen im Alter 50+ aus 12 europäischen Ländern über einen Zeitraum von vier Jahren. Unsere Ergebnisse zeigen, dass das Leben in Armut, definiert über das relative Einkommen, keinen Einfluss auf die Gesundheit ausübt. Bei weiter gefassten Definitionen von Armut, wie der subjektiven Armut oder einem niedrigen relativen Vermögen, erhöht sich hingegen die Wahrscheinlichkeit, einen schlechteren Gesundheitszustand zu erreichen, die Genesungswahrscheinlichkeit im analysierten Zeitraum reduziert sich. Des Weiteren ergeben unsere Untersuchungen, dass das subjektive Armutsempfinden die Sterblichkeitsrate signifikant erhöht. Diese Wahrscheinlichkeit ist für Männer um 40,3 Prozent höher, bei den 50- bis 64-Jährigen sogar 58,3 Prozent höher. Solche Ergebnisse weisen darauf hin, dass die materiellen Lebensumstände entscheidend für die Gesundheit der älteren Generation sind. Wir empfehlen, dass sich die Messung von Armut innerhalb der älteren Generation sowie die Zielsetzung in der Politik auf weiter gefasste Armutsdefinitionen stützen sollte als lediglich über das Einkommen definierte.
    Keywords: health transitions,material conditions,poverty,mortality
    JEL: I14 I32 J14
    Date: 2013
  11. By: Matsaganis, Manos; Leventi, Chrysa
    Abstract: The severe economic crisis affecting Greece since 2009 is having an unprecedented impact in terms of job and income losses, and is widely perceived to have a comparably significant effect in terms of greater inequality and increased poverty. We provide an assessment of whether (and to what extent) the latter is the case. More specifically, we use the European tax-benefit microsimulation model EUROMOD in order to quantify the impact of the austerity (i.e. fiscal consolidation policies) and the recession (i.e. negative developments in the wider economy) on the distribution of incomes in 2009-2012, and estimate how the burden of the crisis has been shared across income groups. We conclude by discussing the policy implications of our research.
    Date: 2013–08–22
  12. By: Tocco,Barbara; Bailey, Alastair; Davidova, Sophia
    Abstract: The objective of this paper is to explore the determinants to leave agriculture and change occupational sector. We adopt a 3-step multivariate probit where we control for selection bias at two stages in the decisions to work and, at a later stage, exit agriculture. The analysis is based on the European Union Labour Force Survey data expanded with additional regional indicators. The main results suggest that younger individuals are more likely to leave farming activities, although the largest outflows of agricultural labour are mainly associated with the retirement of people. Self-employed and family workers are generally less likely to leave agriculture and those with low levels of educations are found to be significantly constrained in entering the non-farm economy. Moreover, labour market conditions at the regional level do matter for switching occupational sector. Differences in the results among the selected NMS and the EU-15 can be explained by the diverse production structures, suggesting different capacities to release and absorb labour.
    Date: 2013–06
  13. By: Cleff, Thomas; Rennings, Klaus
    Abstract: Energy efficiency regulation is an important driver for innovations in environmental technologies. Improvements of energy efficiency do not only contribute to reach envi-ronmental policy targets, they can be furthermore economically profitable. E.g. private households can reduce their costs in the long term by using efficient household appli-ances. But how can the specific competitive position on this market be assessed for German producers, and how strong is the competitiveness from firms coming from emerging economies? We analyse - as an example - the global refrigerator market, using the lead market approach for environmental innovations. As our results show, Germany has the most lead market potentials for energy-efficient refrigerators, followed by Korea und Italy. First mover advantages for high-tech energy efficient appliances can be realised on the German market. This is backed by high en-ergy efficiency standards in Europe which diffuse after some years to other countries. Since the pay-off time for energy efficient household appliances is with 7 to 10 years quite long, also a cost strategy with low prices can be successful. Especially in the case when the price of electricity and the national income are low. Markets for such products are for example in Asia and Russia. Producers use the existence of both strategy options to operate with different brands and product lines in different market niches at the same time. For firms in countries that do not have sufficient lead market potentials, innovations in energy efficiency must be targeted to fit the preferences of users in the lead market. The screening of the lead market can take on varying degrees of intensity. A good way for a company to estab-lish ties with a lead market is via producers with long experience on the Lead Market. It can be realised through a simple sales cooperation with local producers or a merger with a local producer of the lead market. --
    Keywords: Household appliances,energy efficiency,refrigerators,lead market,first mover
    JEL: Q55 O33 Q01 Q58
    Date: 2013
  14. By: Fackler, Daniel (University of Erlangen-Nuremberg); Schnabel, Claus (University of Erlangen-Nuremberg)
    Abstract: Using a 50 percent sample of all establishments in the German private sector, we report that spinoffs are larger and initially employ more skilled and more experienced workers than other startups. Controlling for these and other differences, we find that spinoffs are less likely to exit than other startups. We show that in West and East Germany and in all sectors investigated pulled spinoffs (where the parent company continues after they are founded) generally have the lowest exit hazards, followed by pushed spinoffs (where the parent company stops operations). The difference between both types of spinoffs is particularly pronounced in the first three years. Contrary to expectations, intra-industry spinoffs are not found to have lower exit hazards in our sample.
    Keywords: spinoffs, startups, firm exits, Germany
    JEL: L2 D22 M13 C41
    Date: 2013–08
  15. By: Gottschalk, Sandra
    Abstract: --
    Keywords: research data centre,provision of research data,Scientific-Use-Files
    JEL: C81
    Date: 2013
  16. By: Etienne LEHMANN (CRED (TEPP) University Panth eon-Assas Paris 2 and CREST, UCL-IRES, IDEP, IZA and CESifo); Claudio LUCIFORA (Università Cattolica del Sacro Cuore, Milano and IZA); Simone MORICONI (Università Cattolica del Sacro Cuore, Milano and Univerity of Luxembourg, CREA); Bruno VAN DER LINDEN (FNRS and UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES))
    Abstract: This paper argues that, for a given overall level of labour income taxation, a more progressive tax schedule reduces the unemployment rate and increases the employment rate. From a theoretical point of view, higher progressivity induces a wage-moderation effect and increases overall employment since employment of low-paid workers is more responsive. We test these theoretical predictions on a panel of 21 OECD countries over 1998-2008. Controlling for the burden of taxation at the average wage, we show that a more progressive taxation reduces the unemployment rate and increases the employment rate. These findings are confirmed when we account for the potential endogeneity of both average taxation and progressivity. Overall our results suggest that policy-makers should not only focus on the detrimental effects of tax progressivity on in-work effort.
    Keywords: Wage moderation, Employment, Taxation
    JEL: E24 H22 J68
    Date: 2013–07–15
  17. By: Lohmann, Steffen
    Abstract: This paper examines whether access to modern information technologies, in particular the internet, has an impact on invididual positionality - meaning the degree to which subjective well-being is affected by income relative to others rather than absolute income. We provide empirical evidence that positionality and internet access are intertwined. Exploiting variation over time in a panel of European households, we find stated material aspirations to be significantly positively related to computer access in areas with advanced internet infrastructure. Furthermore, we report cross-sectional evidence from the World Values Survey suggesting an indirect negative effect of internet access on subjective well-being since people who regularly use the internet as a source of information derive less satisfaction from income. Together, the empirical findings highlight the importance of information sets for how individuals evaluate own living conditions relative to others and suggests a vital role for informational globalisation to affect positionality. --
    Keywords: subjective well-being,positionality,relative income,informational globalisation
    JEL: D03 I31
    Date: 2013
  18. By: Frank Van Oort; Stefan de Geus; Teodora Dogaru
    Abstract: This paper introduces indicators of regional related variety and unrelated variety to conceptually overcome the current impasse in the specialisation-diversity debate in agglomeration economics. Although various country-level studies have been published on this conceptualisation in recent years, a pan-European test has until now been missing from the literature. A pan-European test is more interesting than country-level tests, as newly defined cohesion policies, smart-specialisation policies, place-based development strategies and competitiveness policies may be especially served by related and unrelated variety conceptualisations. We test empirically for the significance of variables based on these concepts, using a cross-sectional dataset for 205 European regions during the period 2000- 2010. The results confirming our hypotheses are that related variety is significantly related to employment growth and that specialisation is significantly related to productivity growth. We do not find robust relationships that are hypothesised between unrelated variety and unemployment growth. Our analyses show that evolutionary economic geography and institutional and policy-based regional development may be integrated fruitfully at the European level.
    Date: 2013–08
  19. By: Mokinski, Frieder; Wölfing, Nikolas
    Abstract: We find an asymmetric pass-through of European Emission Allowance (EUA) prices to wholesale electricity prices in Germany and show that this asymmetry has disappeared in response to a report on investigations by the competition authority. The asymmetric pricing pattern, however, was not detected at the time of the report, nor had it been part of the investigations. Our results therefore provide evidence of the deterring effect of regulatory monitoring on firms which exhibit non-competitive pricing behavior. We do not find any asymmetric pass-through of EUA prices in recent years. Several robustness checks support our results. --
    Keywords: asymmetric price adjustment,regulatory monitoring,wholesale electricity markets,emission trading
    JEL: L4 L94 Q41 Q52
    Date: 2013
  20. By: Bauer, Anja (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])
    Abstract: "This paper provides detailed empirical evidence on the scope of mismatch in Germany in the past decade, using a comprehensive administrative data set that allows for disaggregation at the levels of industry, occupation and region. The findings suggest that regional mismatch did not play an important role in explaining movements of aggregate unemployment. Across industries and occupations, there was a decrease in mismatch unemployment from over 5 percent to below 4 percent (on the highest disaggregation level), whereas the share of mismatch unemployment (across industries and occupations) within total unemployment remains almost unchanged between 2000 and 2010. The results provide no evidence that the Hartz reforms have substantially reduced mismatch, in line with the fact that reallocation across occupations appears not to have been eased." (Author's abstract, IAB-Doku) ((en))
    JEL: E24 J6
    Date: 2013–08–19

This nep-eur issue is ©2013 by Giuseppe Marotta. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.