nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2013‒11‒16
twenty papers chosen by
Giuseppe Marotta
University of Modena and Reggio Emilia

  1. Is caring for elderly parents detrimental for women’s mental health? The influence of the European North-South gradient By Cinzia Di Novi; Elenka Brenna
  2. An overview of CO2 cost pass-through to electricity prices in Europe By Jouvet, Pierre-André; Solier, Boris
  3. The cohort size-wage relationship in Europe By John Moffat; Duncan Roth
  4. The gap between public and private wages: new evidence for the EU By Francisco de Castro; Matteo Salto; Hugo Steiner
  5. Gaining weight through retirement ? Results from the SHARE survey By Godard, Mathilde
  6. Inequalities of Opportunities in Health and Natural Reward: a European Perspective By Tubeuf, Sandy; Trannoy, Alain; Jusot, Florence; Bricard, Damien
  7. Day-Care Expansion and Parental Subjective Well-Being: Evidence from Germany By Pia S. Schober; Christian Schmitt
  8. Technology Platforms in Europe: an empirical investigation By Lisa De Propris; Carlo Corradini
  9. Costs and Benefits of Labour Mobility between the EU and the Eastern Partnership Countries: Country Study on Germany By Biavaschi, Costanza; Zimmermann, Klaus F.
  10. The European Crisis and Migration to Germany: Expectations and the Diversion of Migration Flows By Simone BERTOLI; Jes�s FERN�NDEZ-HUERTAS MORAGA; Herbert BR�CKER
  11. Women Labor Market Participation in Europe: Novel Evidence on Trends and Shaping Factors By Cipollone, Angela; Patacchini, Eleonora; Vallanti, Giovanna
  12. Corporate Taxation and Productivity Catch-Up: Evidence from European Firms By Norman Gemmel; Richard Kneller; Danny McGowan; Ismael Sanz
  13. Governance of CO2 markets: lessons from the EU ETS By Trotignon, Raphaël; De Perthuis, Christian
  14. The Fiscal Effects of Immigration to the UK By Christian Dustmann; Tommaso Frattini
  15. Who participates in tax avoidance? By Alstadsæter, Annette; Jacob, Martin
  16. The contribution of Business services to the export performances of manufacturing industries. An empirical study on 5 European countries By Rinaldo Evangelista; Matteo Lucchese; Valentina Meliciani
  17. Tracking in the Tracks Understanding Inequality Patterns in the Italian Public Schooling System By Luigi Benfratello; Giuseppe Sorrenti; Gilberto Turati
  18. Retirement patterns of couples in Europe By Laura Hospido; Gema Zamarro
  19. ICT-enabled innovation for learning in Europe and Asia. Exploring conditions for sustainability, scalability and impact at system level. By Panagiotis Kampylis; Nancy Law; Yves Punie; Stefania Bocconi; Barbara Bre?ko; Seungyeon Han; Chee-Kit Looi; Naomi Miyake
  20. Life Satisfaction and Unemployment: The Role of Voluntariness and Job Prospects By André Hajek

  1. By: Cinzia Di Novi (Department of Economics, University Of Venice Cà Foscari); Elenka Brenna (Cattolica del Sacro Cuore, Dipartimento di Economia e Finanza)
    Abstract: In the last decades, both the lengthening of life expectancy and an accentuated decline in birth rates have reduced the consistency of the younger generational cohorts. Due to ageing population, the burdens of caregiving are projected to intensify in the next quarter of the century in Europe, especially for mature women. This paper investigates the impact of the provision of constant care for elderly parents on the mental health of adult daughters, between the ages of 50 and 65, living in different European countries. Data is collected from the Survey of Health, Ageing and Retirement in Europe (SHARE). Information on mental health status is provided by Euro-D depression scale, a standardized measure of depression employed across European countries. We focus on differences in the effects according to a North–South gradient: we test whether the relationship between informal caregiving and mental health differs across European macro- regions. Our results reveal the presence of a North-South gradient in the effect of caring on women’s mental health.
    Keywords: caregiver burden, depression, parent care, LTC systems, mature women.
    JEL: I10 I12 D10
    Date: 2013
  2. By: Jouvet, Pierre-André; Solier, Boris
    Abstract: This paper investigates the link between wholesale electricity prices in Europe and the CO2 cost, i.e. the price of European Union Allowances (EUAs), over the two first phases of the European Union Emissions Trading Scheme (EU ETS). We set up a theoretical framework and an empirical model to estimate to what extent daily fluctuations of CO2 costs may have impacted electricity prices. Regarding estimation results for the first phase of the EU ETS, about 42% of estimated pass-through rates appear to be statistically significant, while only one third of them are statistically different from zero in the second phase. We try to improve those results by proposing alternative estimates based on the EU ETS compliance periods.
    Keywords: European Union Emissions Trading Scheme; EU ETS; spot markets;
    JEL: L94 G1 C58 C22
    Date: 2013–10
  3. By: John Moffat (Durham University); Duncan Roth (University of Marburg)
    Abstract: The demographic and education composition of European countries is changing: the population share of young individuals is declining while that of the highly educated is rising. This paper estimates the impact of cohort size on wages using data on 21 European countries covering 2007-2010 to cast light on the economic consequences of changes in the profile of the labour force. The effect of cohort size on wages is identified through an instrumental variables strategy which, in contrast to previous analyses of European data, addresses self-selection into geographical areas as well as into educational groups. The results support the hypothesis that cohort size has a negative effect on male wages, particularly for the highly educated. However, these negative cohort size effects are not persistent.
    Keywords: Cohort size; wages; causal effect; instrumental variables; EU-SILC
    JEL: J10 J21 J31
    Date: 2013
  4. By: Francisco de Castro; Matteo Salto; Hugo Steiner
    Abstract: This paper aims to assess the size of the wage gap between the public and private sectors within all European Union countries by using the European Structure of Earnings Survey (SES henceforth), compiled by Eurostat for the years 2006 and 2010. Public sector employees are found to enjoy on average higher wages than comparable workers in the private sector in 2010, even after controlling for the level of educational attainment. Regarding gender, contrary to other empirical papers, for the countries with full public sector coverage, we do not find evidence of a higher positive wage gap for women. On average the public wage premium is higher for older workers and workers with lower levels of education. Finally, negative public wage premia are found for workers at higher positions, whereas the positive and sometimes large overall public wage gaps are mainly explained by the sizeable gaps observed at lower job positions.
    JEL: J31 J45 O52
    Date: 2013–11
  5. By: Godard, Mathilde
    Abstract: In this paper, we use IV-techniques to identify the causal e ect of retirement among the 50-69 year-old on Body Mass Index (BMI) and related weight measures. Based on the 2004 and 2006 waves of the Survey of Health, Ageing and Retirement in Europe (SHARE), the identi cation strategy exploits the European variation in retirement schemes to produce an exogeneous shock in retirement behaviour. Our results show that retirement induced by discontinuous incentives in social security systems causes a 0.20 point increase in the probability of being overweight or obese.
    Keywords: Body Mass Index; Obesity; Retirement; Instrumental Variables;
    JEL: I10 J26 C23
    Date: 2013–01
  6. By: Tubeuf, Sandy; Trannoy, Alain; Jusot, Florence; Bricard, Damien
    Abstract: Purpose: This paper aims to quantify inequalities of opportunities in health in Europe and to assess whether the way the correlation between effort towards health and circumstances empirically matters for the magnitude of inequalities of opportunities. Methodology: This paper considers two alternative normative ways of treating the correlation between effort and circumstances championed by Barry and Roemer, and combine regression analysis with inequality measures to compare inequality of opportunities in health within Europe. This paper uses the Retrospective Survey of SHARELIFE focusing on life histories of European people aged 50 and over. Findings: Our results show considerable inequalities of opportunity in health in Germany, Spain, Italy, Denmark, Greece and Belgium whereas Sweden and Switzerland show low inequalities of opportunities in health. The normative principle considered makes little difference in Austria, France, Czech Republic, Sweden and Switzerland whereas it appears to matter in the Netherlands, Poland, Germany, Spain, Italy, Denmark, Greece and Belgium. Research implications: Our results suggest a strong social and family determinism of lifestyles in the Netherlands, Poland, Germany, Denmark, Belgium and the Mediterranean which emphasized the importance of inequalities of opportunities in health within those countries. In terms of public health and social policies, it appears that reducing social and unhealthy lifestyles reproduction across generations would provide important benefits on health. On the other hand Austria, France, and Czech Republic show high inequalities of opportunities in health mainly driven by social and family background affecting adult health directly, and so would require policies compensating for poorer initial conditions.
    Keywords: Equality of opportunity; Europe; health; inequality decomposition; efforts; circumstances;
    JEL: I18 I11
    Date: 2013–06
  7. By: Pia S. Schober; Christian Schmitt
    Abstract: This study investigates whether the expansion of day-care places for under-three-year-old children in East and West Germany from 2007 to 2011 has improved the subjective wellbeing for mothers and fathers with a youngest child in this age group. We extend existing cross-sectional country comparisons and single country policy evaluations by comparing regional variations over time in two different contexts in terms of work-care ideals, labour market, and child care policies. The empirical analysis links administrative records on daycare use at youth welfare office district level from 2007 to 2011 to regionally aggregated data from the Socio-Economic Panel (SOEP) for 2007 to 2011 and from the ‘Families in Germany‘-Study (Familien in Deutschland, FID) for 2010 and 2011. We apply fixed-effects models at the county level. We find that in regions with larger day-care growth mothers and fathers expressed greater satisfaction with the available child care. In West Germany, the daycare expansion was positively associated with an increase in maternal satisfaction with family life, health, personal income, and life overall, whereas fathers’ subjective well-being was less affected. In East Germany, for mothers the associations with some domains were similarly positive but reached statistical significance only for maternal satisfaction with family life. The results suggest that the excess demand before the expansion in West and East Germany restricted maternal choice and well-being more than fathers’.
    Keywords: Well-being, satisfaction, parenthood, early childhood education and care, child care
    Date: 2013
  8. By: Lisa De Propris; Carlo Corradini
    Abstract: In the last decades, innovation activity has been defined by an increasing complexity and a faster pace of the underlying technological change. Accordingly, several studies have shown that competitive systems of innovation benefit from being able to build upon a wide but integrated spectrum of technological capabilities characterised by a sustained dynamism in the level of inter-sectoral technology flows. In this context, technological platforms – defined as knowledge and scientific launching pads that spin out of key enabling technologies - may create the opportunity for technological externalities to take place across a set of related sectors through a swarm of increasingly applied and incremental innovations. In this report, we look at the presence and determinants of these technological platforms across EU Countries and explore the mechanisms through which these influence inter sectoral technology spillovers, thus fostering technological shifts and technological synthesis within the broader economy. Using data on patents and patent citations obtained from the PATSTAT-CRIOS database, covering all patent applications made to the European Patent Office (EPO), we try to model the systemic nature of technology platforms. In particular, our aim is to provide empirical evidence that the presence of key enabling technologies at the base of the platform may lead to a more sustained interaction across second tier innovations characterised by a “distant” knowledge base. Then, we endeavour to investigate the relationship that may take place between this process and the role played by the national dimension.
    Keywords: Clusters, ecological innovation, industrial innovation, innovation, innovation policy, new technologies, patents, socio-ecological transition, sustainable growth
    JEL: O3 O31 O32 O33 O38
    Date: 2013–11
  9. By: Biavaschi, Costanza (IZA); Zimmermann, Klaus F. (IZA and University of Bonn)
    Abstract: Despite the ongoing dialogue on facilitating mobility between the European Union and the Eastern Partnership (EaP) countries, very little is known about the magnitude and characteristics of migrants from these countries. This study aims to fill this gap by studying the size and assimilation patterns of EaP migrants in Germany. Most EaP migrants in Germany come from Ukraine but EaP migrants are a relatively small share of total migrants. EaP migrants experience worse labor market outcomes than other migrant groups, but current and potential migrants hold qualifications in those areas were skill shortages are expected.
    Keywords: migration, labour market, assimilation
    JEL: J15 J26 J61 J62
    Date: 2013–10
    Abstract: The European crisis has diverted migration flows away from countries affected by the recession towards Germany. The diversion process creates a challenge for traditional discrete-choice models that assume that only bilateral factors account for dyadic migration rates. This paper shows how taking into account the sequential nature of migration decisions leads to write the bilateral migration rate as a function of expectations about the evolution of economic conditions in alternative destinations. Empirically, we incorporate 10-year bond yields as an explanatory variable capturing forward-looking expectations and apply our model to an empirical analysis of migration from the countries of the European Economic Association to Germany in the period 2006-2012. We show that disregarding alternative destinations leads to substantial biases in the estimation of the determinants of migration rates.
    JEL: J61 O15 F22
    Date: 2013
  11. By: Cipollone, Angela (LUISS Guido Carli University); Patacchini, Eleonora (Sapienza University of Rome); Vallanti, Giovanna (LUISS Guido Carli University)
    Abstract: We investigate the changes in women's participation patterns across 15 EU countries over the last 20 years using individual data from ECHP and EUSILC databases. Our findings reveal a role of social policies and institutional factors that is stronger than what has so far been assessed. Labor market reforms explain almost 25% of the actual increase in labor force participation for young women, and more than 30% for highly educated women. The effects of labor market reforms on the participation of low skilled women in the labor force are instead surprisingly small. We also find that reforms of the institutional framework towards a model of flexicure labor market are effective in enhancing women labor supply only when deregulation is accompanied by sufficient social compensation.
    Keywords: employment gender gap, labor market institutions, child-rearing, elderly care, flexicurity
    JEL: J11 J21 J2
    Date: 2013–10
  12. By: Norman Gemmel (Victoria University of Wellington, New Zealand); Richard Kneller (University of Nottingham, UK); Danny McGowan (Bangor University, UK); Ismael Sanz (Universidad Rey Juan Carlos, Spain)
    Abstract: Firms that lay far behind the technological frontier have the most to gain from imitating the technology or management practices of others. That some firms converge relatively slowly to the productivity frontier suggests the existence of factors that cause them to under-invest in their productivity. In this paper we explore whether higher rates of corporate taxation affect firm productivity convergence because they reduce the after tax returns to productivity enhancing investments for small firms. Using data for 11 European countries we find evidence for such an effect; productivity growth in small firms is slower the higher are high corporate tax rates. Our results are robust to the use of instrumental variable and panel data techniques with quantitatively similar effects found from a natural experiment following the German tax reforms in 2001.
    Keywords: Productivity, taxation, convergence
    JEL: D24 H25 L11 O31
    Date: 2013–03
  13. By: Trotignon, Raphaël; De Perthuis, Christian
    Keywords: European Union Emission Trading Scheme; Energy policy;
    JEL: Q56 Q48
    Date: 2013
  14. By: Christian Dustmann (UCL); Tommaso Frattini (University of Milan)
    Abstract: In this paper, we investigate the fiscal impact of immigration on the UK economy, with a focus on the period since 1995. We provide estimates for the overall immigrant population for the period between 1995 and 2012, and for more recent immigrants who arrived since 2000, distinguishing between immigrants from European versus non-European countries. Overall, our findings indicate that EEA immigrants have made a positive fiscal contribution, even during periods when the UK was running budget deficits. This positive contribution is particularly noticeable for more recent immigrants that arrived since 2000 in particular from EEA countries.
    Keywords: Immigration, Fiscal Impact, Welfare State
    JEL: J61 J68 H20
    Date: 2013–11
  15. By: Alstadsæter, Annette; Jacob, Martin
    Abstract: This paper analyzes the sources of heterogeneity in legal tax avoidance strategies across individuals. Three conditions are required for a taxpayer to participate in tax avoidance: incentive, access, and awareness. Using rich Swedish administrative panel data with a unique link between corporate and individual tax returns, we analyze individual participation in legal tax planning around the 2006 Swedish tax reform. Our results suggest that closely held corporations are utilized to facilitate income shifting across tax bases to reduce the individual's overall tax burden. We find that both tax incentives and awareness of tax incentives impact the decision to access income-shifting opportunities. Our results show that factors explaining participation in legal tax avoidance substantially differ from those explaining participation in illegal tax evasion. --
    Keywords: Tax avoidance,Income shifting,Income taxation,Dividend taxation
    Date: 2013
  16. By: Rinaldo Evangelista (University of Camerino); Matteo Lucchese (Istat (Italian Statistical Office) and University of Urbino); Valentina Meliciani (University of Teramo)
    Date: 2013–11
  17. By: Luigi Benfratello; Giuseppe Sorrenti; Gilberto Turati
    Abstract: We study whether – beyond an EU-style tracking separating students in general versus vocational curricula – the Italian highly centralized public schooling is characterized by an implicit US-style tracking system separating students by ability within the same track. We pursue this aim by using administrative data on a standardized admission test at the School of Economics in Turin. We proxy students’ ability with the test score and check whether students across schools within the same track are stratified by ability and household income. Our findings strongly suggest that the inequality patterns common in Italian schooling are affected by both types of tracking.
    Keywords: public schools, educational inequalities, school stratification, school tracking
    JEL: I24 I28
    Date: 2013
  18. By: Laura Hospido (Banco de España and IZA); Gema Zamarro (Dornsife Center for Economic and Social Research. University of Southern California)
    Abstract: In this paper we study the retirement patterns of couples in a multi-country setting using data from the Survey of Health, Aging and Retirement in Europe. In particular, we test whether women’s (men’s) transitions out of the labor force are causally related to the actual realization of their husbands’ (wives’) transition, using the institutional variation in country-specific early and full statutory retirement ages to instrument the latter. Exploiting the discontinuities in retirement behavior across countries, we find a significant joint retirement effect, especially for women, of around 16 to 18 percentage points. For men, we find a similar but less precise effect. Our empirical strategy allows us to give a causal interpretation to the effect we estimate. In addition, this effect has important implications for policy analysis.
    Keywords: Joint retirement, Social security incentives
    JEL: J26 D10 C21
    Date: 2013–11
  19. By: Panagiotis Kampylis (JRC/IPTS); Nancy Law (University of Hong Kong, Hong Kong); Yves Punie (JRC/IPTS); Stefania Bocconi (Italian National Research Council, The Institute for Educational Technology); Barbara Bre?ko (JRC/IPTS); Seungyeon Han (Hanyang Cyber University, South Korea); Chee-Kit Looi (National Institute of Education, Singapore); Naomi Miyake (The University of Tokyo, Japan)
    Abstract: This report presents three cases of ICT-enabled innovation for learning from Europe (eTwinning, 1:1 Learning in Europe and Hellerup School in Denmark) and four cases from Asia (e-Learning Pilot Scheme in Hong Kong SAR, Knowledge Construction with Technology (CoREF) in Japan, Third Masterplan for ICT in Education (mp3) in Singapore and Digital Textbook project in South Korea), covering aspects such as the context, scale and nature of innovation, the intended learning outcomes, the role of technology, and implementation strategies. Based on desk research, case reports, consultation with education stakeholders from Europe and Asia, and in-depth expert interviews, the necessary conditions for sustainability, scalability and impact at system level are analysed. Thus, the report brings evidence to the debate about the mainstreaming of ICT-enabled innovation for learning in Europe and beyond, contributing to the Europe 2020 Strategy to modernize Education and Training across Europe.
    Keywords: ICT-enabled innovation for learning, Creative Classrooms, conditions for sustainability and scalability of educational innovation, ecological framework for mainstreaming educational innovation,
    JEL: I20 I21 I28 I29
    Date: 2013–10
  20. By: André Hajek
    Abstract: By using longitudinal data the relation between satisfaction with life and unemployment is analyzed in this study. Data used in this publication were made available by the German Socio Economic Panel Study (SOEP) at the German Institute for Economic Research (DIW Berlin), Berlin. A period from 1998-2009 is evaluated. This publication has two goals. (1) To estimate the effects of voluntary and involuntary unemployment on life satisfaction. (2) Moreover, the intent is to answer the question of whether job prospects influence life satisfaction. This study has yielded the following results: In contrast to voluntary job leavings involuntary job leavings noticeable reduce satisfaction. Furthermore, a lack of job prospects before leaving the last position decreases life satisfaction as well. Additionally, an exogenous stimulus (plant shutdown) diminishes satisfaction, especially those of men. The implications are discussed.
    Keywords: Life satisfaction, unemployment, SOEP, fixed-effects, job prospects, voluntariness
    JEL: J64 I31
    Date: 2013

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