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on Microeconomic European Issues |
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Issue of 2014‒03‒01
twenty-one papers chosen by Giuseppe Marotta University of Modena and Reggio Emilia |
| By: | Bargain, Olivier; Callan, Tim; Doorley, Karina; Keane, Claire |
| Abstract: | This paper examines the impact on inequality and poverty of the economic crisis in four European countries, namely France, Germany, the UK and Ireland, and the contribution of tax and benefit policy changes. The period examined, 2008 to 2010, was one of great economic turmoil, yet it is unclear whether changes in inequality and poverty rates over this time period were mainly driven by changes in market income distributions or by tax- benefit policy reforms. We disentangle these effects by producing counterfactual ("no reform") scenarios using tax-benefit microsimulation and representative household surveys of each country. For the period under study, we find that the policy reaction has contributed to stabilizing or even decreasing inequality and relative poverty in the UK, France and especially in Ireland, a country where rising unemployment would have otherwise increased poverty. Market income inequality has nonetheless pushed up inequality and relative poverty in France. Relative poverty and, notably, child poverty, have increased in Germany due to policy responses combined with the increasing inequality of market income. |
| Keywords: | Tax-benefit policy; Inequality; Poverty; Decomposition; Microsimulation; Crisis. |
| Date: | 2014–01 |
| URL: | http://d.repec.org/n?u=RePEc:esr:wpaper:wp474&r=eur |
| By: | Susanne Prantl; Alexandra Spitz-Oener; ; |
| Abstract: | Does interacting product and labor market regulation alter the impact of immigration on wages of competing native workers? Focusing on the large, sudden and unanticipated wave of migration from East to West Germany after German reunification and allowing for endogenous immigration, we compare native wage reactions across dierent segments of the West German labor market: one segment without product and labor market regulation, to which standard immigration models best apply, one segment in which product and labor market regulation interact, and one segment covering intermediate groups of workers. We nd that the wages of competing native West Germans respond negatively to the large influx of similar East German workers in the segment with almost free firm entry into product markets and weak worker influence on the decision-making of firms. Competing native workers are insulated from such pressure if firm entry regulation interacts with labor market institutions, implying a strong influence of workers on the decision-making of profit-making firms. |
| Keywords: | Immigration, Product Market Regulation, Labor Market Regulation |
| JEL: | J61 L50 J3 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:hum:wpaper:sfb649dp2014-018&r=eur |
| By: | Georg Licht; Bettina Peters |
| Abstract: | This paper studies the impact of environmental innovation on employment growth in the period 2006-2008 using firm-level data for German manufacturing and services. It extends the model by Harrison et al (2008) in order to distinguish between employment effects of environmental and non-environmental product as well as process innovation. As a robustness check patent data on green technologies are employed. The results demonstrate that both environmental and non-environmental product innovations stimulate employment growth. We find a similar gross employment effect of both types of product innovations. That is, one-percent increases in sales stemming from new environmental and non-environmental products increase gross employment by one percent each. Thus, we do not find evidence that that new products with environmental benefits for consumers are produced with higher or lower efficiency than old products. Yet, the net employment contribution of non-green product innovations is 4 to 5 times larger than the net contribution of green product innovations. This is the result of differences in the average innovation engagement and innovation success of both types of new products. In contrast, environmental and non-environmental process innovation plays only a little role for employment growth. In particular, we do not identify a significant trade-off between more environmental-friendly production technologies and employment growth. This holds for both cleaner production technologies and end-of pipe technologies. |
| Keywords: | Employment growth, environmental innovation, green patents |
| JEL: | O33 J23 L80 C21 C23 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:feu:wfewop:y:2014:m:2:d:0:i:53&r=eur |
| By: | Tangerås, Thomas (Research Institute of Industrial Economics (IFN)); Tåg, Joacim (Research Institute of Industrial Economics (IFN)) |
| Abstract: | We analyse network competition in a market with international calls. National regulatory agencies (NRAs) have incentives to set regulated termination rates above marginal cost to extract rent from international call termination. International network ownership and deregulation are alternatives to combat the incentives of NRAs to distort termination rates. We provide conditions under which each of these policies increase efficiency and aggregate welfare. Our findings provide theoretical support for recent policy initiatives by the European Commission. |
| Keywords: | Cross-border ownership; Decentralized regulation; International markets; Network |
| JEL: | L51 L96 |
| Date: | 2014–02–12 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:1005&r=eur |
| By: | Rohlf, Alexander; Römer, Daniel; von Graevenitz, Kathrine |
| Abstract: | In this paper, we study the effect of the release of emission information on housing prices. The main event under study is the release of the first wave of data from the European Pollutant Release and Transfer Register (E-PRTR) publishing emission quantities for the reporting year 2007. We base our analysis on quarterly house prices at the German postal code level for the years 2004-2011 and provide, to the best of our knowledge, the first analysis outside the US on this research question. We estimate a differences-in-differences model and find no significant effect of the release of emission information on the value of houses in affected postal code areas when controlling for observable differences in land use, prevalence of housing types, tax revenues and other postal code area characteristics by means of propensity score matching. This result survives several robustness checks. We conclude that disclosing the first wave of E-PRTR emissions had no robust impact on housing prices. |
| Date: | 2014–02–19 |
| URL: | http://d.repec.org/n?u=RePEc:awi:wpaper:0554&r=eur |
| By: | Christina Boll; Julian Sebastian Leppin |
| Abstract: | Germany’s occupational and sectoral change towards a knowledge-based economy calls for high returns to education. Nevertheless, female graduates are paid much less than their male counterparts. We wonder whether overeducation affects sexes differently and whether this might answer for part of the gender pay gap. We decompose total year of schooling in years of over- (O), required (R), and undereducation (U). As ORU earnings estimations based on German SOEP cross-section and panel data indicate, overeducation pays off less than required education in the current job even when unobserved heterogeneity is taken into account. Moreover, analyses of job satisfaction and self-assessed overeducation point to some real mismatch. However, overeducation does not matter for the gender pay gap. By contrast, women’s fewer years of required education reasonably do, answering for 7.61 pp. of the East German (18.79 %) and 2.22 pp. of the West German (32.98 %) approximate gap. Moreover, job biography and the household context affect the gap more seriously in the old Bundesländer than in the new ones. Overall, the West German pay gap almost doubles the East German one, and different endowments answer for roughly three quarters of the approximate gap in the Western but only for two thirds in the Eastern part. We conclude that the gendered earnings gap among German graduates is rather shaped by an employment behaviour suiting traditional gender roles and assigned gender stereotypes than being subject to gendered educational inadequacy. |
| JEL: | J31 J24 J16 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp627&r=eur |
| By: | Pilar García-Gómez; Sergi Jiménez-Martín; Judit Vall Castelló |
| Abstract: | In this work we combine wage data from Social Security working histories and health information available in the Survey of Health and Retirement in Europe to explore the link between health, financial incentives and retirement in Spain. Our results show that individuals in worse health quintiles are, indeed, the more responsive to financial incentives as they prove to be less likely to retire when incentives to continue working increase. |
| JEL: | H55 I18 J11 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:19913&r=eur |
| By: | Alena Bicakova; Stepan Jurajda |
| Abstract: | It is well known that highly 'female' fields of study in tertiary education are characterized by higher fertility. However, existing work does not disentangle the selection- causality nexus. We use variation in gender composition of fields of study implied by the recent expansion of tertiary education in 19 European countries and a difference- in-differences research design, to show that the share of women on study peer groups affects early fertility levels only little. Early fertility by endogamous couples, i.e., by tertiary graduates from the same field of study, declines for women and increases for men with the share of women in the group, but non-endogamous fertility almost fully compensates for these effects, consistent with higher early fertility in highly 'female' fields of study being driven by selection of family-oriented students into these fields. We also show that the EU-wide level of gender segregation across fields of study has not changed since 2000. |
| Keywords: | field-of-study gender segregation; tertiary graduates; fertility; |
| JEL: | I23 J13 J16 |
| Date: | 2014–01 |
| URL: | http://d.repec.org/n?u=RePEc:cer:papers:wp504&r=eur |
| By: | Aiello, Francesco |
| Abstract: | In this study several matching procedures have been used to evaluate the impact of public R&D support received by Italian manufacturing firms over the three-year period 2004-2006. Data are from the Capitalia-UniCredit survey and estimations refer to a sample of 605 treated firms untreated are 2414). The evidence is mixed and depends on the objective-variable under consideration. As far as the total amount of R&D investments is concerned, the role of public support to innovation is positive and significant, while no impact has been found when considering the R&D intensity and the share of sales due to innovative-products. These differences in results are quite regular, whatever the matching method applied in the evaluation. |
| Keywords: | Policy Evaluation; R&D Investments; Innovative Sales; Matching estimators |
| JEL: | C2 H2 H7 L1 L2 L6 O32 O38 |
| Date: | 2013–12–02 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:53848&r=eur |
| By: | Walid Oueslati (Granem - Groupe de Recherche ANgevin en Economie et Management - Agrocampus Ouest - Institut national de la recherche agronomique (INRA) : UMR49); Seraphim Alvanides (Geography and Built Environment - University of Northumbira); Guy Garrod (CRE - Centre for Rural Economy - University of Newcastle, Newcastle upon Tyne, UK) |
| Abstract: | This paper provides empirical evidence that helps to answer several key questions relating to the extent and causes of urban sprawl in Europe. Building on the monocentric city model, this study uses existing data sources to derive a set of panel data for 282 European cities at three time points (1990, 2000 and 2006). Two indices of urban sprawl are calculated and respectively reflect changes in artificial area and the levels of urban fragementation for each city. These are supplemented by a set of data on various economic and geographical variables that might explain the variation of these indices. Estimating using a Hausman Taylor and random regressors to control the possible correlation between explanatory variables and unobservable city-level effects, we find that the fundamental conclusions of the standard monocentric model are valid in the European context for both indices. Although the variables generated by the monocentric model explain a large part of variation of artificial area, their explanatory power for the fragmentation is relatively low. |
| Keywords: | Urban sprawl, European cities, spatial scale, monocentric city model, urban scattering. |
| Date: | 2014–01–06 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-00943319&r=eur |
| By: | Todd Honeycutt; Lorenzo Moreno |
| Keywords: | Germany, Netherlands, Transition Age Youth, Disability, International |
| JEL: | I J F Z |
| Date: | 2014–02–28 |
| URL: | http://d.repec.org/n?u=RePEc:mpr:mprres:8026&r=eur |
| By: | Roslyn Layton |
| Abstract: | Although it is often idealized as a technologically connected continent, Europe’s broadband system is actually highly fragmented and in great need of overall improvement. The European Union should simplify and reduce regulation of broadband providers, remove barriers to consolidation, and embrace a market-led, technology-neutral approach to broadband. |
| Keywords: | tech policy,internet regulation,European Union,CICT-feed,broadband |
| JEL: | A O |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:aei:rpaper:40279&r=eur |
| By: | Lanot, Gauthier (Department of Economics, Umeå School of Business and Economics); Sousounis , Panos (Keele Management School, Economics) |
| Abstract: | We study the effect of the National Minimum Wage (NMW) on the workforce composition, in terms of distinct age groups with similar qualifcations, within the low paying sectors of the economy. Our interest is in the degree of substitutability between labour inputs (young and old employees) in the production process. We find evidence that both the introduction and regu- lar uprating of the NMW have a signifcant effect on determining observed changes in average wages for age groups older than 16-17 years of age. However, our results show that the effects of the NMW and its uprating on the sectoral cost of labour are rather weak and we conclude that, if any, the influence of the NMW has to be small and limited to the very young (16-17 year olds) or the 18-20 year olds. We estimate the elasticity of substitution, between 18-20 year olds and old workers, to be around 0.2-0.5, which would imply signifcant complementarity (or at least argue against perfect substitution) between younger and old employees. |
| Keywords: | labour substitution; minimum wage |
| JEL: | J21 J31 |
| Date: | 2014–02–20 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:umnees:0877&r=eur |
| By: | Sebastian Königs |
| Abstract: | In this article, we study state dependence in social assistance receipt in Germany using annual survey data from the German Socio-Economic Panel (SOEP) for the years 1995-2011. We show that there is considerable observed state dependence, with an average persistence rate in benefits of 68% compared to an average entry rate of below 4%. To identify a possible structural component in state dependence, we estimate a series of dynamic random-effects probit models that control for unobserved heterogeneity and endogeneity of initial condition. We find evidence of substantial state dependence in benefit receipt. Our estimates suggest that benefit receipt one year ago raises the likelihood of benefit receipt today by a factor of 3.7. This corresponds to an average partial effect of over 14 percentage points. Average predicted entry and persistence rates are much higher in Eastern Germany than in Western Germany, absolute levels of structural state dependence however are comparable. We do not find evidence for much time variation in state dependence. This holds true also for the time around the Hartz reforms. |
| Keywords: | Social assistance, welfare benefits, state dependence, Hartz reforms |
| JEL: | I38 J60 J64 C23 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp628&r=eur |
| By: | Tindara Abbate; Fabrizio Cesaroni |
| Abstract: | Purpose: Academic spin-off firms are considered an important mechanism to transfer technological knowledge from university to industry, although they often show a low growth rate. One possible cause is the lack of proper marketing capabilities, since spin-off managers tend to reduce the role of marketing to the implementation of mere tactical activities. This study analyses whether spin-off firms adopt a market orientation and the effect it produces on firms' economic and innovation performance. Design/methodology/approach: The empirical analysis is based on both quantitative survey data and in-depth interviews, referring to a unique sample including Italian and Spanish spin-off companies. Findings: Results highlight that MKTOR and MARKOR measurement scales show different abilities to capture the implementation of market orientation by sampled firms. We find that the generation and dissemination of information on customers and competitors directly affect firms' ability to develop technological innovations and gain profits. Nevertheless, market orientation also constitutes a challenge to spin-offs, and may eventually generate inefficiencies when external technological conditions require firms to respond quickly to environmental stimuli. Practical implications: The findings of this study are relevant to academic spin-off managers who are responsible for adopting, implementing and maintaining market orientation strategies under different environmental conditions. Limitations: The characteristics of sample used for the quantitative analysis may limit the generalization of results. Originality/value: Even though the market orientation concept has been largely analyzed, no previous study has examined its application by academic spin-offs. By employing qualitative and quantitative analyses we provide novel insights in this respect. |
| Keywords: | Academic spin-off firms; market orientation; company performance , Market orientation , Company performance |
| Date: | 2014–01 |
| URL: | http://d.repec.org/n?u=RePEc:cte:idrepe:id-14-01&r=eur |
| By: | Vivien Procher (Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Jackstädt Center of Entrepreneurship and Innovation Research, University of Wuppertal); Nolan Ritter (Rheinisch-Westfälisches Institut für Wirtschaftsforschung); Colin Vance (Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Jacobs University Bremen) |
| Abstract: | Drawing on German household data from 1992 to 2011, this paper analyzes how couples allocate housework against the backdrop of three questions: (1) Does an individual’s contribution to household income - both in absolute and relative terms - influence his or her contribution to housework? (2) If so, does the magnitude of this influence differ by gender? and (3) How important are traditional gender roles on housework allocation? We address these issues by applying a panel quantile regression model and find that as both the share and absolute level of income increase, the amount of housework undertaken decreases, with the latter effect being roughly equal across genders. Nevertheless, traditional gender roles also appear to dictate housework allocation, which is evidenced by women increasing their housework if they earn more than their partner. |
| Keywords: | housework, income, gender, longitudinal study, quantile panel regression |
| JEL: | D13 J16 J22 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:bwu:schdps:sdp14004&r=eur |
| By: | Muravyev, Alexander (St. Petersburg University GSOM and IZA); Talavera, Oleksandr (University of Sheffield); Weir, Charlie (Robert Gordon University) |
| Abstract: | This paper studies the effect on company performance of appointing non-executive directors that are also executive directors in other firms. The analysis is based on a new panel dataset of UK companies over 2002-2008. Our findings suggest a positive relationship between the presence of these non-executive directors and the accounting performance of the appointing companies. The effect is stronger if these directors are executive directors in firms that are performing well. We also find a positive effect when these non-executive directors are members of the audit committee. Overall, our results are broadly consistent with the view that non-executive directors that are executives in other firms contribute to both the monitoring and advisory functions of corporate boards. |
| Keywords: | executive directors, non-executive directors, company performance |
| JEL: | G34 G39 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7962&r=eur |
| By: | Schäffler, Johannes (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Hecht, Veronika (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Moritz, Michael (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]) |
| Abstract: | The attractiveness for the location of multinational firms is seen as a crucial issue for the development and prosperity of regions. This article focuses on a two-country relationship and deals with the regional distribution of German multinational firms and their affiliates in the Czech Republic. A new dataset established by the IAB covers information on the basic population of cross-border foreign direct investment (FDI) projects, thereby exceeding the number of observations in previously used databases by far. On the basis of 3,894 FDI projects the regional determinants of German cross-border investments in the Czech Republic are analysed for both the home and the host country. Alternative specifications of the gravity model are used in order to investigate the regional distribution of common investment projects that are calculated as a combination of a headquarters in a German spatial planning region and an affiliate in a Czech NUTS 3 region. Concerning the explanatory variables a distinction is made between three groups of factors: first, market size and agglomeration features of the regions; second, attributes representing the distance between the headquarters in Germany and the affiliates in the Czech Republic; and third, regional labour market characteristics. While the findings are generally in line with theoretical expectations, differences emerge between manufacturing FDI and services FDI. |
| JEL: | F23 R12 F15 |
| Date: | 2014–02–24 |
| URL: | http://d.repec.org/n?u=RePEc:iab:iabdpa:201403&r=eur |
| By: | Arnberg, Søren; Barslund, Mikkel |
| Abstract: | This paper aims to estimate the crowding-out effect of the Danish mandatory labour market pension reforms begun in 1993 on the level of total household savings for renters. The effect is identified via a large panel of individual administrative records utilising the differences in speed, timing and sectoral coverage of the implementation of the reform in the period 1997 to 2005. Little substitutability was found between current mandatory labour market pension savings and private voluntary savings. Each euro paid into mandatory labour market pension accounts results in a reduction in private savings of approximately 0 to 30 cents, depending on age. This low rate of substitution is only, to a minor extent, explained by liquidity constraints. The results point to mandatory pension savings having a large effect on total household savings. Thus, pension reforms that introduce mandatory savings have macroeconomic implications. |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:eps:cepswp:8911&r=eur |
| By: | Muriel Fadairo (Université de Lyon, Lyon, F-69007, France ; CNRS, GATE Lyon St Etienne,F-69130 Ecully, France, Université Jean Monnet, Saint-Etienne, F-42000, France); Jianyu Yu (Research Institute of Economics and Management, Southwest University of Economics and Finance, Chengdu, Sichuan, China, 610074) |
| Abstract: | This paper investigates the rationales of exclusive dealing (ED), which is one of the most common forms of vertical restraint and attracts intense policy debates in anti-trust regulations. Based on a survey of the theoretical literature, we derive several hypotheses relative to the anti- and pro-competitive motivations of ED. These hypotheses are submitted to French data regarding several types of distribution networks in a wide range of sectors. Considering the industry features, our empirical analysis indicates that in the French distribution system, ED contracts tend to be procompetitive. The evidence suggests that the motivation of ED mainly lies in its positive role to foster the investment of upstream firms. |
| Keywords: | Exclusive dealing, Vertical restraints, Competition policy |
| JEL: | C12 L42 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:gat:wpaper:1405&r=eur |
| By: | Maarten Peter Vink |
| Abstract: | Traditionally, there are two contrasting views on the way in which European states instrumentalise naturalisation, residence, and rights policies as part of a broader agenda of immigrant integration. First, the ‘complementary’ view sees access to membership as a complementary strategy to access to rights. Second, the ‘alternative’ view sees the granting of social and political rights, independent of citizenship status, as an alternative to granting access to formal membership through naturalisation. Whereas there are theoretical and normative reasons to support either perspective, surprisingly, there has been no systematic comparative work on how in practice states instrumentalise membership and rights for immigrants. In this paper, we analyse the relation between naturalisation and integration policies in 29 European states. We find strong empirical evidence in Europe that extending membership and rights are generally used as complementary strategies of immigrant incorporation. Naturalisation policies are not simply one of several integration policy alternatives. Hence states with inclusive naturalisation policies also tend to be inclusive in terms of extending rights to foreigners in diverse areas of public life, such as political participation, anti-discrimination, education, labour market access and family reunion. We conclude that naturalisation policies are at the heart of a state’s integration policy and one of the best predicators of its overall approach to integration. Exclusive naturalisation policies signal the lack of an inclusive immigrant integration agenda. |
| Keywords: | citizenship |
| Date: | 2013–12–16 |
| URL: | http://d.repec.org/n?u=RePEc:erp:euirsc:p0369&r=eur |