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on Microeconomic European Issues |
| By: | Ernest Miguélez (Economics and Statistics Division, WIPO and AQR-IREA); Rosina Moreno (Faculty of Economics, University of Barcelona) |
| Abstract: | The goal of this paper is twofold: first, we aim to assess the role played by inventors’ cross-regional mobility and collaborations in fostering knowledge diffusion across regions and subsequent innovation. Second, we intend to evaluate the feasibility of using mobility and co-patenting information to build cross-regional interaction matrices to be used within the spatial econometrics toolbox. To do so, we depart from a knowledge production function where regional innovation intensity is a function not only of the own regional innovation inputs but also external accessible knowledge stocks gained through interregional interactions. Differently from much of the previous literature, cross-section gravity models of mobility and co-patents are estimated to use the fitted values to build our ‘spatial’ weights matrices, which characterize the intensity of knowledge interactions across a panel of 269 regions covering most European countries over 6 years. |
| Keywords: | inventors’ spatial mobility, co-patenting, gravity models, weights matrix, knowledge production function. JEL classification: C8, J61, O31, O33, R0. |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:aqr:wpaper:201306&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: | elderly employees; matching; part-time work; treatment effects |
| JEL: | C21 J14 J26 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:9574&r=eur |
| By: | Terry Ward; Erhan Ozdemir |
| Abstract: | This paper is a critical assessment of the indicator which has been developed to measure the relative number of people living in households with low, or very low, work intensity which is part of the Europe 2020 target set to reduce poverty and social exclusion in the European Union. It considers the way the indicator is defined and calculated, in particular, the age group taken to be of working-age, the treatment of students, the threshold defined to denote low work intensity and the extent of missing cases. It also examines how far the source of data used – the EU-SILC – correctly distinguishes those of working age who were not employed, or at least very little, over the year to which the indicator applies. It assesses, in addition, whether it is possible to use the Labour Force Survey (LFS) to estimate low household work intensity in advance of the EU-SILC data becoming available, given that that there is a lengthy delay between the year to which the EU-SILC relates and the publication of the data. It considers as well whether it is possible to estimate a measure of persistently low work intensity from the EU-SILC longitudinal data to complement the indicator and add a further level of detail relevant for policy. Finally, it assesses the reliability of the indicator from a statistical perspective by estimating the confidence intervals surrounding the point-estimates both for low work intensity in a particular year and for persistently low work intensity over a 4-year period. |
| Keywords: | Work intensity, workless households, poverty, social exclusion, Europe 2020, employment |
| JEL: | O52 I32 |
| Date: | 2013–08 |
| URL: | http://d.repec.org/n?u=RePEc:hdl:improv:1309&r=eur |
| By: | Petrick, Martin; Kloss, Mathias |
| Abstract: | The classical problem of agricultural productivity measurement has regained interest due to recent price hikes in world food markets. At the same time, there is a new methodological debate on the appropriate identification strategies for addressing endogeneity and collinearity problems in production function estimation. We examine the plausibility of alternative identification strategies for the case of agriculture and test two related, innovative estimators using farm-level panel datasets from seven EU countries. The control function and dynamic panel approaches provide attractive conceptual improvements over the received ‘within’ and duality models. Even so, empirical implementation of the conceptual sophistications built in these estimators does not always live up to expectations. This is particularly true for the dynamic panel estimator, which mostly failed to identify reasonable elasticities for the (quasi-) fixed factors. Less demanding proxy approaches represent an interesting alternative for agricultural applications. In our EU sample, we find very low shadow prices for labour, land and fixed capital across countries.The production elasticity of materials is high, so that improving the availability of working capital is the most promising way to increase agricultural productivity. |
| Keywords: | Agricultural factor productivity, production function estimation, EU, Farm Accountancy Data Network, Production Economics, Productivity Analysis, |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:ags:gewi13:156104&r=eur |
| By: | Garnero, Andrea; Kampelmann, Stephan; Rycx, François |
| 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 show that educational (age) diversity is beneficial (harmful) for firm productivity and wages. While gender diversity is found to generate significant gains in high-tech/knowledge intensive sectors, the opposite result is obtained in more traditional industries. Estimates neither vary substantially with firm size nor 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: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:cpm:docweb:1304&r=eur |
| By: | Wolfgang Dauth; Sebastian Findeisen; Jens Suedekum |
| Abstract: | We analyze the effects of the unprecedented rise in trade between Germany and “the East” – China and Eastern Europe – in the period 1988 – 2008 on German local labor markets. Using detailed administrative data, we exploit the cross-regional variation in initial industry structures and use trade flows of other high-income countries as instruments for regional import and export exposure. We find that the rise of “the East” in the world economy caused substantial job losses in German regions specialized in import-competing industries, both in manufacturing and beyond. Regions specialized in export-oriented industries, however, experienced even stronger employment gains and lower unemployment. In the aggregate, we estimate that this trade integration has caused some 493,000 additional jobs in the economy and contributed to retaining the manufacturing sector in Germany. We also conduct our analysis at the individual worker level, and find that trade had a stabilizing overall effect on employment relationships. |
| Keywords: | International trade, import competition, export opportunities, local labor markets, employment, China, Eastern Europe, Germany |
| JEL: | F16 J31 R11 |
| Date: | 2013–08 |
| URL: | http://d.repec.org/n?u=RePEc:zur:uceswp:003&r=eur |
| By: | Almosova, Anna |
| Abstract: | Integration processes in Europe resulted in intensification of migration flows. Immigrants account now for a large share of population in many European countries. A point of view that immigrants take jobs form natives is quite widespread. The European Monitoring Centre on Racism and Xenophobia published a special analysis of the attitudes towards minorities in EU countries Eurobarometer 2000. They found that one in two EU citizens worry about competing with immigrants for the same vacancies and afraid of losing their jobs because of presence of foreign workers. Different measures and institutions which protect native workers have nevertheless an ambiguous effect. On the one hand labor protective institutions such as minimal wage, replacement rate or firing restrictions will protect existing workers and reduce a firing rate. On the other hand, firms will take into consideration these additional costs of firing and will be less likely to employ new workers. At the same time, it is argued that immigrants are probably less likely to be covered by these institutions. These facts imply that protective institutions cover mostly natives and therefore make immigration labor force comparatively less costly. Labor market protection may therefore amplify a negative effect of immigrants on native employment if it exists.This paper attempts to evaluate the effect of immigration in flow on employment level of natives and reveal whether this effect changes in different institutional environments using EU-countries data. In addition to static specification it uses a dynamic specification to draw conclusions about long-term and short-term effects separately. The results show no long-run effect of immigration inflow. Short-term effect of is found to be positive. Protective labor market institutions fulfill their function of protecting existing workers.The results are also different for men and women. |
| Keywords: | Immigration, Labor Market Institutions, Displacement Effect |
| JEL: | J30 J61 J65 |
| Date: | 2013–03–29 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:49785&r=eur |
| By: | Michael Lechner; Patrycja Scioch; Conny Wunsch (University of Basel) |
| Abstract: | This paper investigates the link between variation in the supply of workers who participate in specific types of active labour market policies (ALMPs) and firm performance using a new exceptionally informative German employer-employee data base. For identification we exploit that German local employment agencies (LEAs) have a high degree of autonomy in determining their own mix of ALMPs and that firms' hiring regions overlap only imperfectly with the areas of responsibility of the LEAs. Our results indicate that in general firms do not benefit from ALMPs and in some cases may even be harmed by certain programs, in particular by subsidized employment and longer training programs. These findings complement the negative assessment of the cost-effectiveness of ALMPs from the empirical literature on the effects for participants. |
| Keywords: | Subsidized employment programs, training programs, regional variation, program evaluation. |
| JEL: | J68 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:bsl:wpaper:2013/11&r=eur |
| By: | Giuseppina Malerba (DISCE, Università Cattolica); Marta Spreafico (DISCE, Università Cattolica) |
| Abstract: | Understanding the reasons underlying income inequality has generated considerable interest in the last years and various theoretical analyses have been developed to explain international differences in income distribution between groups of countries at different stages of economic development. However, structural investigations of the contemporary effects of the forces shaping the evolution of income inequality are difficult to find. Moreover, little attention has been given to the increasing inequality merely among advanced economies. For these reasons, we develop a theoretical framework to provide a comprehensive analysis of the factors affecting income distribution in a particular set of advanced economies, the European Union countries, and utilize a fifteen year panel of 25 countries to identify the short term effects of several considerable determinants of household income inequality. On the basis of the main findings, we conclude providing some policy indications. |
| Keywords: | Household disposable income distribution, European Union, structural determinants, panel models |
| JEL: | C33 D31 I31 I32 I38 |
| Date: | 2013–04 |
| URL: | http://d.repec.org/n?u=RePEc:ctc:serie5:ispe0065&r=eur |
| By: | Friedrich Dornbusch (Fraunhofer Institute for Systems and Innovation Research ISI, Competence Center Policy and Regions); Thomas Brenner (Economic Geography and Location Research, Philipps-Universität Marburg) |
| Abstract: | It is often claimed that universities act as local knowledge factories. Although this function is largely analyzed in previous research, there still is a knowledge gap regarding the role of a technological match between the profiles of partners in university-industry interactions. In addition, the effects of different knowledge dynamics in technological regimes remain under-researched. In this paper, we thus draw special attention to the question how geographical distance and the specific role of a technological fit between the knowledge provided by the university and the technological needs of the local industry affects interactions between universities and firms. Thereby, we differentiate between six technological regimes constituted by different knowledge dynamics. Our analyses are based on a unique dataset containing all German universities’ academic patenting and publication activities. As these are further enriched by secondary data, they enable us to show that the technological fit between a university and its surrounding region (in terms of local industry needs) indeed has a significant influence on a university’s innovation-related research interactions, especially with small firms. We further show that this effect additionally depends on the underlying knowledge base in heterogeneous technological regimes. |
| Keywords: | university-industry interaction, technological fit, knowledge base, academic patenting, technology regime, local knowledge hub |
| JEL: | O31 R12 L14 |
| Date: | 2013–10–09 |
| URL: | http://d.repec.org/n?u=RePEc:pum:wpaper:2013-10&r=eur |
| By: | Grüner, Hans Peter; Müller, Daniel |
| Abstract: | This paper develops a method to estimate information rents of losers of a reform who receive a monetary compensation. Our method explicitly accounts for survey respondents' reluctance to reveal a willingness to accept which is smaller than the actual compensation. We apply our approach to the case of the 2005 European agricultural reform using uniquely gathered survey data from farmers in Lower Saxony, Germany. We find empirical indications for strategic misreporting. Correcting for these effects with a structural model, we find that information rents are in the order of up to 15 per cent of total compensation paid. Moreover, we show that the reform could not have been implemented distinctly cheaper by conditioning compensation schemes on observable factors. |
| Keywords: | European agricultural reform; information rents |
| JEL: | D70 D78 H20 |
| Date: | 2013–04 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:9452&r=eur |
| By: | Giuseppe Espa; Danila Filipponi; Diego Giuliani; Davide Piacentino |
| Abstract: | This paper looks at spatial and sectoral effects on firm entry and exit in Italian NUTS-3 regions, over the period 2004-2009. We use a new version of spatial shift-share decomposition which looks more effectively at the neighbourhood influence, beyond traditionally looking at national, industrial mix and regional-shift components. We separately analyse the sub-periods 2004-2007 and 2007-2009, in order to take into account the 2007 crisis. Results seem to be substantially divergent between the Southern regions, i.e. the poorest areas, and the rest of Italy. The firm demography seems to manifest higher instability over time, i.e. more entries but also more exits, in the Southern regions and this is associated with the presence of industrial mix disadvantage. On other hand, the firm demography is more stable, i.e. less entries but also less exits, in the rest of Italy and this reflects an industrial mix advantage. Such results seems to be widespread within the two macro-areas as the analysis of neighbourhood influence points out. externalities. |
| Keywords: | firm demography, crisis, spatial shift-share, Italian regions |
| JEL: | C21 L26 R12 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:trn:utwpem:2013/07&r=eur |
| By: | Stephen Lecourt |
| Abstract: | In its third Phase (2013-20), the European Union Emissions Trading Scheme allocation methodology is shifting from grandfathering to a combination of auctioning and benchmarking. Free allocation is now be devoted to non-electricity generators only (save exemption), and is linearly decreasing throughout the Phase with a view of no free allocation in 2027. Benchmark-based free allocation is meant to reward lowest CO2-intensive installations as opposed to grandfathering, which allocated allowances based on historical emissions levels. This policy note describes the concrete implications involved by this shift in allocation methodology, and addresses the potential flaws of benchmarking-based allocation, using data from French nstallations’ Phase 3 provisional free allocation. |
| Keywords: | EU ETS, Benchmarks, Preliminary amounts, Carbon leakage, Historical Activity Level |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:cec:wpaper:1305&r=eur |
| By: | Stefania Aceto (MENON Network); Spiros Borotis (MENON Network); Jim Devine (DEVINE Policy|Projects|Innovation (and former President, IADT)); Thomas Fischer (MENON Network) |
| Abstract: | EU policies call for the strengthening of Europe’s innovative capacity and it is considered that the modernisation of Education and Training systems and technologies for learning will be a key enabler of educational innovation and change. This report brings evidence to the debate about the technologies that are expected to play a decisive role in shaping future learning strategies in the short to medium term (5-10 years from now) in three main learning domains: formal education and training; work-place and work-related learning; re-skilling and up-skilling strategies in a lifelong-learning continuum. This is the final report of the study ‘Mapping and analysing prospective technologies for learning (MATEL)' carried out by the MENON Network EEIG on behalf of the European Commission, Joint Research Centre, Institute for Prospective Technological Studies. The report synthesises the main messages gathered from the three phases of the study: online consultation, state-of-the-art analysis and a roadmapping workshop. Eight technology clusters and a set of related key technologies that can enable learning innovation and educational change were identified. A number of these technologies were analysed to highlight their current and potential use in education, the relevant market trends and ongoing policy initiatives. Three roadmaps, one for each learning domain, were developed. These identified long-term goals and specific objectives for educational change, which in turn led to recommendations on the immediate strategies and actions to be undertaken by policy and decision makers. |
| Keywords: | Prospective technologies for learning, Formal education and training, work-place and work-related learning, Re-skilling and up-skilling strategies in lifelong-learning continuum, Europe 2020 Strategy, educational change, Innovation & Creativity in Education and Training, ICT-enabled innovation for learning, roadmapping |
| JEL: | I20 I21 I28 I29 |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc81935&r=eur |
| By: | Gabin Langevin (CREM UMR CNRS 6211, University of Rennes 1, France); David Masclet (CREM UMR CNRS 6211, University of Rennes 1 and CIRANO, France); Fabien Moizeau (CREM UMR CNRS 6211, University of Rennes 1 and IUF, France); Emmanuel Peterle (CREM UMR CNRS 6211, University of Rennes 1, France) |
| Abstract: | We use data from the Trajectoires et Origines survey to analyze the labor-market outcomes of both second-generation immigrants and their French native counterparts. Second-generation immigrants have on average a lower probability of employment and lower wages than French natives. We find however considerable differences between second-generation immigrants depending on their origin: while those originating from Northern Africa, Sub-Saharan Africa and Turkey are less likely to be employed and receive lower wages than French natives, second-generation immigrants with Asian or Southern- and Eastern-European origins do not differ significantly from their French native counterparts. The employment gap between French natives and second-generation immigrants is mainly explained by differences in their education; education is also an important determinant of the ethnic wage gap. Finally we show that these differences in educational attainment are mainly explained by family background. Although the role of discrimination cannot be denied, our findings do point out the importance of family background in explaining lifelong ethnic inequalities. |
| Keywords: | labor-market discrimination, second-generation immigrants, educational attainment, family background, decomposition methods |
| JEL: | I2 J15 J24 J41 |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:tut:cremwp:201327&r=eur |
| By: | Raquel Fonseca; Yuhui Zheng |
| Abstract: | This paper uses comparable micro-data from over 15 OECD countries to study the causal relationship between education and health outcomes. We combine three surveys (SHARE, HRS and ELSA) that include nationally representative samples of people aged 50 and over in these countries. We use variation in the timing of educational reforms across these countries as an instrument for the effect of education on health. Using instrumental variables Probit models (IV-Probit), we find causal evidence that more years of education lead to better health for a limited number of health markers. We find lower probabilities of reporting poor health, of having limitations in functional status (ADLs and iADLs) and of having been diagnosed with diabetes. These effects are larger than those from a Probit that does not control for the endogeneity of education. We cannot find evidence of a causal effect of education on other health conditions. Interestingly, the relationship between education and cancer is positive in both Probit and IV-Probit models, which we interpret as evidence that education fosters early detection. |
| Keywords: | Education, health, causality, compulsory schooling laws |
| JEL: | I1 I14 I2 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:lvl:lacicr:1325&r=eur |
| By: | Francisca Bremberger; Carlo Cambini; Klaus Gugler and Laura Rondi |
| Abstract: | We study the impact of different regulatory and ownership regimes on the dividend policy of regulated firms. Using a panel of 106 publicly traded European electric utilities in the period 1986-2010, we link payout and smoothing decisions to the implementation of different regulatory mechanisms (cost plus vs. incentive regulation) and to firm ownership (state vs. private). After controlling for the potential endogeneity of the regulatory mechanism, our results show that utilities subject to incentive regulation smooth their dividends less than firms subject to cost-based regulation and present higher impact effects and target payout ratios. This suggests that when managers are more sensitive to competition-like efficiency pressures following the adoption of incentive regulation, they adopt a dividend policy more responsive to earnings variability and more consistent with optimal cash management. These results, however, apply only to private utilities. If the state still has ultimate control, smoothing of dividends remains irrespective of the regulatory mechanism. It seems that corporate governance (i.e. state control) trumps regulation when it comes to dividend payout policy. |
| Keywords: | Dividends, Lintner model, incentive regulation, electricity |
| JEL: | G35 G38 L51 L94 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:rsc:rsceui:2013/53&r=eur |
| By: | Dennis Guignet (National Center for Environmental Economics US Environmental Protection Agency); Anna Alberini (Department of Agricultural and Resource Economics University of Maryland, and Fondazione Eni Enrico Mattei, Venice) |
| Abstract: | Hedonic property value models are often used to place a value on localized amenities and disamenities. In practice, however, results may be affected by (i) omitted variable bias and (ii) whether homebuyers and sellers are aware of, and respond to, the assumed environmental measure. In this paper we undertake an alternative stated preference (SP) approach that eliminates the potential for unobserved confounders and where the measure of environmental quality is explicitly presented to respondents. We examine how homeowners in the United Kingdom and Italy value mortality risk reductions by asking them to choose among hypothetical variants of their home that differ in terms of mortality risks from air pollution and price. To our knowledge this is the first stated preference study examining respondents’ willingness to pay for properties using a quantitative and clearly specified measure of health risks. We find that Italian homeowners hold a value of a statistical life (VSL) of about €6.4 million, but UK homeowners tend to hold a much lower VSL (€2.1 million). This may be due to the fact that respondents in the UK do not perceive air pollution where they live to be as threatening, and actually live in cities with relatively low air pollution levels. Exploiting part of our experimental design, we find that Italian homeowners value a reduction in the risk of dying from cancer more than from other causes, but UK respondents do not hold such a premium. We also find that those who face higher baseline risks, due to higher air pollution levels where they live, hold a higher VSL, especially in the UK. In both countries, the VSL is twice as large among individuals who perceive air pollution where they live as relatively high. |
| Keywords: | Home Values, Air Pollution, Stated Preference, Vsl, Value of Statistical Life, Value of a Prevented Fatality, Health Risks, Cancer Premium |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2013.67&r=eur |
| By: | Giuseppe Croce; Edoardo Di Porto; Emanuela Ghignoni; Andrea Ricci |
| Abstract: | This paper analyzes the role of the employer in workplace training, a novelty with respect to the literature on this topic. Taking advantage of a unique dataset on Italy, we study how individual employer profile and the agglomeration of employers influence firms’ propensity to invest in training. Our findings show that highly educated employers have a greater propensity to invest in workplace training. Moreover, we are able to capture the effect of employers’ human capital agglomeration on the training decision. We assert that such agglomeration leads to two different alternative scenarios: 1) a poaching effect may prevail, therefore competition among employers induces less propensity to train workers; 2) a positive knowledge spillover effect may prevail leading to a greater propensity to engage in training. We test these two options discovering that in the Italian case, where small businesses are prominent, the first effect is stronger. Several econometrics issues are considered in our empirical strategy: the skewed and bounded nature of the training decision indicator, the endogeneity issues derived from the agglomeration effect as well as the cross section dependence problems affecting standard errors. |
| Keywords: | workplace training; poaching; knowledge spillovers; entrepreneurship cluster, employer’s education, social capital, proximity. |
| JEL: | J24 O15 O18 R23 |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:sap:wpaper:wp162&r=eur |
| By: | Hoekman, Bernard; Mavroidis, Petros C |
| Abstract: | This paper discusses the Fedon case law of the European Court of Justice (ECJ), which involved a claim for compensation by Fedon (an Italian producer of eye glass cases) from the EU for the imposition of WTO-authorized retaliatory trade barriers by the United States following the failure by the EU to comply with an adverse ruling by the WTO regarding its import-regime for bananas. As a result of the EU non-compliance, European banana distributors and some bananas producers benefitted from WTO-illegal protection, at the expense of a set of EU exporters, including Fedon, that were hit by US countermeasures. By not complying with its international (WTO) obligations, the EU redistributed income across producers in different sectors as well as between suppliers and consumers of bananas. Fedon contested the non-compliance by the EU before the ECJ and sought compensation. This paper assesses the ECJ ruling against Fedon and argues that the ECJ got it wrong, both in terms of legal principle and as a matter of legal technicalities. An alternative approach is proposed that would better balance individual rights to property against the ‘general’ EU interest whether or not to comply with adverse WTO rulings. |
| Keywords: | dispute settlement; EU law; trade agreements; trade retaliation; WTO |
| JEL: | F13 K41 K42 |
| Date: | 2013–06 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:9496&r=eur |