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on Microeconomic European Issues |
| By: | John J. García; Francesc Trillas |
| Abstract: | The deregulation process in the EU electricity sector triggered strategic decisions that led to industry restructuring. This paper presents preliminary evidence of the impact of this process on investors, using event studies and estimation techniques such as least squares and GARCH. Our findings suggest three stylized facts: 1) regulatory reform in Europe was certainly accompanied by a takeover wave, as predicted by Mitchell and Mulherin (1996); 2) mergers and acquisitions had a positive impact on the stock price of target firms, and a much lower and sometimes even a negative impact for the bidding firms; 3) the effect of takeover announcements on the returns of competitors of the merging firms depends on the degree of market power. In countries with high market power (like Spain) competitors significantly increase share returns upon takeover announcements, whereas in countries with lower market power (like England and Wales) returns do not change significantly. |
| Keywords: | Deregulation; mergers and acquisitions; event study; energy |
| JEL: | L94 G14 G34 G38 |
| Date: | 2013–11–12 |
| URL: | http://d.repec.org/n?u=RePEc:col:000122:010928&r=eur |
| By: | Naticchioni, Paolo (University of Rome 3); Raitano, Michele (Sapienza University of Rome); Vittori, Claudia (Sapienza University of Rome) |
| Abstract: | This paper documents the evolution of the experience-earnings profiles of private employees in Italy over the first six years of working career across three birth cohorts (1965-1969, 1970- 1974, 1975-1979). We explore the average trends and disentangle how the patterns vary according to individual skills, defined in terms of both educational levels and percentiles of the unconditional earnings distribution. Unlike previous studies, and in contrast with the expectations prompted by the skill-biased literature, our results surprisingly show that the Italian "best of youth", i.e. the best workers of the most recent cohorts (the high skilled), have suffered, compared to the previous cohorts, an earnings penalty much more severe than that experienced by unskilled workers. This finding also raises questions about the effectiveness of the European Employment Strategy, which repeatedly stressed the importance of human capital and technological knowledge as main drivers for European performance. |
| Keywords: | youth, cohorts, education, earnings, Italy |
| JEL: | J24 J31 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8140&r=eur |
| By: | Giuditta de Prato (European Commission – JRC - IPTS); Daniel Nepelski (European Commission – JRC - IPTS) |
| Abstract: | The EIPE project aims to identify ICT R&D&I-related activities which are geographically concentrated and which demonstrate high performance in ICT innovative activities: the European ICT Poles of Excellence. This is the third EIPE Report and it presents the results of an empirical mapping of ICT activity in Europe and the ranking of the top European NUTS 3 regions based on their performance in the EIPE Composite Indicator (EIPE CI). It also ranks the individual 42 indicators which contributed to the building of the EIPE composite indicator. This report offers a snapshot of the performance of regions that are identified as the main locations of ICT activity in Europe. It is meant to provide a comprehensive picture of how ICT activity is distributed across Europe and where its main locations are. This information is expected to give a better overview of the European ICT landscape. |
| Keywords: | ICT; information and communication technologies; innovation, R&D, ICT industry; region; Europe; Poles of Excellence; clusters; indicators; methods |
| JEL: | O32 O52 R12 R28 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc85353&r=eur |
| By: | Eichhorst, Werner (IZA); Tobsch, Verena (E-x-AKT WIRTSCHAFTSFORSCHUNG) |
| Abstract: | This paper gives an overview of the transformation of the German labour market since the mid-1990s with a special focus on the changing patterns of labour market segmentation or 'dualization' of employment in Germany. While labour market duality in Germany can partially be attributed to labour market reforms promoting, in particular, non-standard forms of employment and allowing for an expansion of low pay, structural changes in the economy as well as strategic choices by employers and social partners also play a prominent role. Our main argument is that the liberalization of non-standard contracts has contributed to the expansion of overall labour market inclusion and job growth in Germany and that at least some forms of non-standard work provide stepping stones into permanent regular jobs. Atypical contracts do not necessarily undermine the dominance of standard employment relationships and job quality in this primary segment but rather form a supplementary part of employment in sectors that depend on more flexible and maybe cheaper forms of labour. |
| Keywords: | Germany, labour market reforms, dualization, non-standard work |
| JEL: | J21 J31 J42 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8155&r=eur |
| By: | Cristina Torrecillas Caro (European Commission – JRC - IPTS); Clara Centeno (European Commission – JRC - IPTS); Gianluca Misuraca (European Commission – JRC - IPTS) |
| Abstract: | This report presents the main findings and policy recommendations of an analysis based on the results of an online survey of intermediary organisations working on eInclusion in 27 European countries. The survey, which is the first ever assessment of the e-Inclusion intermediary sector, collect relevant data from almost 3,000 including individual and network organisations that are representing more than 85,000 members. In addition, it is estimated a total of 250,000 organisations, or one e-Inclusion actor per every 2,000 inhabitants. According to the findings, these organisations are playing a relevant role in achieving the goals of the Digital Agenda for Europe, particularly in two of its action areas: enhancing digital literacy, skills and inclusion and ICT-enabled benefits for EU society. Moreover, most of organisations offer ICT-based, employment-related and other social services. In conclusion, there is a need for policy makers to recognize, empower and support the role and impact of these eInclusion intermediary actors, in support of the achievement of Europe 2020 economic and social goals. When considering these policy options, the important role that networks play among these actors needs to be acknowledged, mainly because of the high number of small organisations that characterize the sector.. |
| Keywords: | eInclusion, Telecentres, Intermediaries, Networks, Digital Agenda, Europe 2020 Strategy, Digital Inclusion, Social Inclusion, Social Innovation |
| JEL: | I3 I30 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc87552&r=eur |
| By: | Haykel Hamdi; Duc Khuong Nguyen; Hassan Obeid |
| Abstract: | This article investigates the return behavior of privatization initial public offerings (PIPOs) in Europe over both the short- and long-run horizons. Using data from a sample of 162 PIPOs over the period 1986-2008, we show that European PIPOs outperform, in terms of risk-adjusted abnormal returns, a benchmark market index and a portfolio composed of 162 European private IPOs, regardless of the horizon of analysis. Our results are im- portant for both investors and policymakers with respect to their investment and privatization decisions, and also allow a better understanding of the financial performance behavior of the privatized state-owned enterprises. |
| Keywords: | privatization IPOs, short- and long-run performance, CAR, BHAR. |
| Date: | 2014–04–28 |
| URL: | http://d.repec.org/n?u=RePEc:ipg:wpaper:2014-241&r=eur |
| By: | Dahmann, Sarah (DIW Berlin); Anger, Silke (Institute for Employment Research (IAB), Nuremberg) |
| Abstract: | This paper investigates the short-term effects of a reduction in the length of high school on students' personality traits using a school reform carried out at the state level in Germany as a quasi-natural experiment. Starting in 2001, academic-track high school (Gymnasium) was reduced from nine to eight years in most of Germany's federal states, leaving the overall curriculum unchanged. This enabled students to obtain a university entrance qualification (Abitur) after a total of only 12 rather than 13 years of schooling. We exploit the variation in the length of academic-track high school over time and across states to identify the effect of schooling on students' Big Five personality traits and on their locus of control. Using rich data on adolescents and young adults from the German Socio-Economic Panel (SOEP) study, our estimates show that shortening high school caused students on average to be more extroverted and less emotionally stable. Our estimates point to important heterogeneous effects. In addition to differences between East and West Germany, we find that male students and students from disrupted families showed stronger personality changes following the reform: they became more agreeable and more extroverted, respectively. We conclude that the educational system plays an important role in shaping adolescents' personality traits. |
| Keywords: | non-cognitive skills, Big Five, locus of control, skill formation, high school reform |
| JEL: | I21 I28 J24 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8139&r=eur |
| By: | Annemie Nys; Leen Meeusen; Vincent Corluy |
| Abstract: | Despite the employment gains in many EU countries in the decade prior to the crisis of 2008, the integration of disabled individuals in the labor market has often proved a difficult task. As already shown in other studies, the consequences of this reach further than the individual level with the employment status of other family members often being negatively affected when someone leaves the labor market because of health-related issues. In addition to this, the social expenditure patterns of European countries in terms of facilitating the need for care (in the area of incapacity) with paid work show very pronounced differences. In this paper we therefore (1) establish the exact correlation between the individual employment of disabled individuals and the corresponding household work intensity and we (2) investigate whether and to what extent the observed household joblessness rate deviates from a random distribution of employment by means of a polarization index. We take into account distinct socio-demographic characteristics of both disabled and non-disabled family members when evaluating the observed polarization to finally (3) correctly evaluate whether welfare states that explicitly take the issue of care into consideration in their social expenditure pattern (in the areas of residential care and home-help services) have corresponding household work intensity levels. We find that the lower employment opportunities of disabled individuals translate into high proportions of jobless households. Positive polarization indices point to more being at play than solely the lower employment level of the disabled household members. When taking age and educational clustering into account, a substantial reduction in the observed polarization index is achieved. For six countries within the sample, a pattern is found between the residual polarization and social expenditures for the relevant domain. Bivariate association, however, fails to underscore the hypothesis that high-spending countries display low polarization counts. |
| Keywords: | household work intensity, polarization of employment, social expenditures, work disability |
| JEL: | Y7 I38 J14 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:hdl:wpaper:1402&r=eur |
| By: | Barra, Cristian; Zotti, Roberto |
| Abstract: | This paper applies a data envelopment analysis (DEA) method to assess technical efficiency of both private and public universities in Italy. Moving from the traditional context where inputs and outputs are assumed to be non-negative, a directional distance function approach has been applied in order to handle both desirable (i.e. number of graduates) and undesirable (i.e. number of dropouts) outputs. The findings based on a panel from academic year 2003/2004 to 2007/2008 reveal the presence of interesting geographical (both by macro areas and regions) and ownership (private, public) effects. Several quality and quantity proxies have also been used in order to check whether the estimates depend on the output specification. Finally, the possible evidence of variation in the universities’ performances by subject of study has been taken into account in order to check whether the results are still consistent comparing universities within subject rather than across subjects. |
| Keywords: | Data envelopment analysis; Negative data in DEA; Directional distance function; Higher education |
| JEL: | C14 C67 I21 I23 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:55570&r=eur |
| By: | Nagore García, Amparo (Universidad de Valencia); van Soest, Arthur (Tilburg University) |
| Abstract: | Using administrative records data from Spanish Social Security, we analyse the pattern and the determinants of individual unemployment benefit spell durations. We compare a period of expansion (2005-2007) and the recent recession (2009-2011), allowing us to determine the impact of the current crisis. In line with the duality that characterizes the Spanish labour market, we distinguish between exits to a stable job and exits to an unstable job. We estimate a Multivariate Mixed Proportional Hazard Model for each time period. We find similar effects of the crisis for stable and unstable jobs, which are particularly strong in the first year of the spell. Moreover, slight negative duration dependence is found, especially for stable jobs in the expansion period until the time of unemployment benefit expires. Individuals who are most affected by the financial crisis tend to be males, those aged 16-24 and 40-51 years, those living in regions with higher unemployment rates, individuals who are less qualified or work in manual occupations (particularly construction) and immigrants. |
| Keywords: | unemployment durations, business cycle, dual labour markets, re-employment probability |
| JEL: | J64 C41 E32 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8121&r=eur |
| By: | Mörk, Eva (Uppsala Center for Labor Studies); Sjögren, Anna (Uppsala Center for Labor Studies); Svaleryd, Helena (Uppsala Center for Labor Studies) |
| Abstract: | We analyze to what extent health outcomes of Swedish children are worse among children whose parents become unemployed. To this end we combine Swedish hospitalization data for 1992-2007 for children 3-18 years of age with register data on parental unemployment. We find that children with unemployed parents are 17 percent more likely to be hospitalized than other children, but that most of the difference is driven by selection. A child fixed-effects approach suggests a small effect of parental unemployment on child health. |
| Keywords: | Parental unemployment; child Health; human capital |
| JEL: | I12 J13 |
| Date: | 2014–03–03 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:uulswp:2014_003&r=eur |
| By: | Goltz, Andreas; Arnault, Louis |
| Abstract: | This paper focuses on the trade-off between formal and informal care for elderly dependents living at home in France. Using the French 2008 household Disability - Healthcare data and a newly built indicator of formal home-care prices in each French Council District, we wonder if fi nancial incentives to use more formal home care could relieve informal caregivers. We estimate a bivariate Tobit model to account for both the censor and the endogeneity of our formal home-care variable. Our results con firm that the volume of informal care provided would decrease if the elderly dependents were faced with lower formal home-care prices. Moreover, informal caregivers are shown to be much more sensitive to public subsidizes for skilled formal home care than for the low-skilled one. Subsidizing for skilled formal home care would make informal caregivers more effcient to perform lighter low-skilled tasks. Eventually, acting on formal home care prices could help French public administrators sustain the well-being of both care receivers and informal caregivers. |
| Keywords: | Long-term Care; Informal Care; Formal Care; Elderly; |
| JEL: | C34 I12 J14 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:dau:papers:123456789/13164&r=eur |
| By: | Hellerstedt, Karin (Jönköping International Business School); Wennberg, Karl (The Ratio Institute and Stockholm School of Economics.); Frederiksen, Lars (Innovation Management Group, Department of Business Administration, Aarhus University,) |
| Abstract: | This paper investigates regional start-up rates in the knowledge intensive services and high-tech industries. Integrating insights from economic geography and population ecology into the literature on entrepreneurship, we develop a theoretical framework which captures how both supply- and demand-side factors mold the regional bedrock for start-ups in knowledge intensive industries. Using multi-level data of all knowledge intensive start-ups across 286 Swedish municipalities between 1994 and 2002 we demonstrate how characteristics of the economic and political milieu within each region influence the ratio of firm births. We find that economically affluent regions dominate entrepreneurial activity in terms of firm births, yet a number of much smaller rural regions also revealed high levels of start-ups. Knowledge spillovers from universities and firm R&D strongly affect the start-up rates for both knowledge intensive manufacturing and knowledge intensive services firms. However, the start-up rate of knowledge-intensive service firms is tied more strongly to the supply of highly educated individuals and the political regulatory regime within the municipality. This suggests that knowledge intensive service-start-ups are more susceptible to both demand-side and supply-side context than manufacturing start-ups. Our study contributes to the growing stream of research that explains entrepreneurial activity as shaped by contextual factors, most notably educational institutions that contribute to technology startups. |
| Keywords: | Start-ups; Spillovers; Universities; R&D; Political regime |
| JEL: | L26 M13 P25 R12 |
| Date: | 2014–04–24 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ratioi:0230&r=eur |
| By: | Ramos, Raul (University of Barcelona); Sanromá, Esteban (University of Barcelona); Simón, Hipólito (Universidad de Alicante) |
| Abstract: | The article examines public-private sector wage differentials in Spain using microdata from the Structure of Earnings Survey (Encuesta de Estructura Salarial). When applying various decomposition techniques, we find that it is important to distinguish by gender and type of contract. Our results also highlight the presence of a positive wage premium for public sector workers that can be partially explained by their better endowment of characteristics, in particular by the characteristics of the establishment where they work. The wage premium is greater for female and fixed-term employees and falls across the wage distribution, being negative for more highly skilled workers. |
| Keywords: | public-private sector wage gap, wage distribution, matched employer-employee data, decomposition methods |
| JEL: | C2 E3 J3 J4 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8158&r=eur |
| By: | Mocan, Naci (Louisiana State University); Raschke, Christian (Sam Houston State University) |
| Abstract: | The fear and hatred of others who are different has economic consequences because such feelings are likely to translate into discrimination in labor, credit, housing, and other markets. The implications range from earnings inequality to intergenerational mobility. Using German data from various years between 1996 and 2010, we analyze the determinants of racist and xenophobic feelings towards foreigners in general, and against specific groups such as Italians and Turks. We also analyze racist and anti-Semitic feelings towards German citizens who differ in ethnicity (Aussiedler from Eastern Europe) or in religion (German Jews). Individuals' perceived (or actual) economic well-being is negatively related to the strength of these feelings. Education, and having contact with foreigners mitigate racist, anti-Semitic and xenophobic feelings. People who live in states which had provided above-median support of the Nazi party in the 1928 elections have stronger anti-Semitic feelings today. The results are not gender-driven. They are not an artifact of economic conditions triggering feelings about job priority for German males, and they are not fully driven by fears about foreigners taking away jobs. The results of the paper are consistent with the model of Glaeser (2005) on hate, and with that of Akerlof and Kranton (2000, 2005) on identity in the utility function. |
| Keywords: | economic well-being, racism, anti-Semitism, foreigners, xenophobia, identity, education |
| JEL: | J15 I30 Z10 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8126&r=eur |
| By: | Erik Floor; Arjan Lejour |
| Abstract: | We estimate the impact of the marginal tax rate on the ownership in risk-bearing assets and on the share in total assets. In contrast to the literature, we use instrumental variables to correct for endogeneity of the marginal tax rate on capital income. Moreover, we use the exogenous variation in marginal tax rates from the Dutch tax reform of 2001. We find that a change in the difference in the marginal tax rate between risky assets and riskless assets has a significant positive impact on the ownership of risky assets and growth funds. A ten percentage point increase of the marginal rate results in a 0.5 percentage point increase of the probability of owning risky assets. The tax rate has no impact on the share of risky assets if we correct for endogeneity and selection. |
| JEL: | G11 H24 H31 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:cpb:discus:273&r=eur |
| By: | Tito Boeri (Bocconi University); Marta De Philippis (LSE and fRDB); Eleonora Patacchini; Michele Pellizzari (University of Geneva) |
| Abstract: | We use a new dataset on eight Italian cities and a novel identification strategy to analyze the relationship between the employment status of migrants and the percentage of migrants living nearby. Our data contain information at the very local level (i.e. the residential block) and are representative of the population of both legal and illegal migrants. Identification is based on an instrumental variable strategy that exploits the physical characteristics of the local buildings as a source of exogenous variation in the incidence of migrants in each location. We find evidence that migrants who reside in areas with a high concentration of non-Italians are less likely to be employed compared to similar migrants who reside in more mixed areas. This penalty is higher if the migrants leaving nearby are illegal and it is not mitigated by living close to migrants who are from own's ethnic group nor who are more proficient in the Italian language. The employment prospects of natives do not appear to be affected by the vicinity of migrants. |
| Keywords: | Immigrant residential density, housing discrimination, ethnic networks |
| JEL: | J15 J61 R23 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:crm:wpaper:1414&r=eur |
| By: | Carlos Cuerpo; Peter Pontuch; Sona Kalantaryan |
| Abstract: | The state of development of rental markets as a genuine alternative to home-ownership stands out as a particularly relevant institutional factor shaping the outcome of the housing market and playing a balancing role and alleviating house price pressures. This is especially the case when it proves to be an affordable platform for young and low-income households, providing them with a viable alternative to a hasty first step into the property ladder. In order to help policymakers develop a sizeable private rental market acting as an attenuating factor of housing prices volatility, it is important to depict the relevant dimensions of the rental market regulation and assess their likely impact on the aggregate housing market. Against this background, this paper first develops a two-dimensional indicator on rental market regulation, covering for rent controls and the tenant-landlord relationship. The resulting indices are put to the test by assessing their impact on housing prices. According to this analysis, an efficient, fair and swift judicial system appears as a necessary step towards unlocking rental markets full potential. Moreover, rent controls appear to have a significant destabilizing impact on the aggregate housing market, increasing the volatility of house prices when confronted with different shocks. Finally, qualitative aspects of the tenancy contract negotiation do not have a first-hand impact on housing market dynamics. |
| JEL: | C23 C38 R15 R28 R52 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:euf:ecopap:0515&r=eur |
| By: | Anna Matysiak; Monika Mynarska (Institute of Statistics and Demography, Warsaw School of Economics; Institute of Psychology, Cardinal Stefan Wyszyñski University in Warsaw) |
| Abstract: | The paper investigates whether self-employment, which generally offers greater flexibility with respect to the hours and place of work, is chosen by women in order to achieve a better balance between paid work and family. The empirical research on this topic has provided conflicting evidence. The shortcomings of previous studies are discussed and accounted for. First, we investigate women's self-employment choices in relationship with childbearing and childrearing, and we apply qualitative methodology to examine the motives that trigger these decisions. Second, in the quantitative part of the study, we investigate the direction of the relationship by analyzing whether self-employment encourages childbearing, or whether motherhood leads women to choose a more flexible form of employment. Finally, we account for the selection of mothers into the group of self-employed due to time-constant unobserved characteristics. Our results show that self-employment does not affect women's fertility decisions, but it can become an attractive option for women after they have children because of the flexibility it offers. Nevertheless, self-employment does not seem to be preferred to W&S contracts. Instead, it is seen as an alternative to being jobless or in a "bad job" (i.e., one that is inflexible, stressful, or demanding). |
| Keywords: | Women’s self-employment, work-family reconciliation, child-care, fertility, Poland |
| JEL: | J13 J22 J16 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:isd:wpaper:68&r=eur |
| By: | Francesco C. Billari (Department of Sociology and Nuffield College, University of Oxford); Vincenzo Galasso (CEPRA, IGIER, Università Bocconi and CEPR) |
| Abstract: | The emergence of old-age social security has been linked to general fertility decline, and in recent years pension reforms have emerged as a response to the challenges of population ageing, in turn partially a consequence of fertility decline. Understanding the link between social security and low fertility is therefore very important. In this paper we analyse the link between fertility and social security in a novel way. We exploit a series of pension reforms that were implemented in Italy, one of the first ‘lowest-low’ fertility societies, during the 1990s, to test the effect of expected retirement income on fertility. The design of the reforms, which introduced a discontinuity depending on the numbers of years of contributions, allows considering them as a natural experiment. We analyse fertility data reconstructed from a series of surveys from the Bank of Italy and show that couples in which the husband was affected by the reform, therefore facing a lower pension, had subsequently higher fertility. |
| Keywords: | old-age security, quantity-quality trade-off, public pension systems, fertility, altruism |
| JEL: | H55 J13 D64 |
| Date: | 2014–04–18 |
| URL: | http://d.repec.org/n?u=RePEc:lug:wpidep:1403&r=eur |