nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2014‒08‒16
eighteen papers chosen by
Giuseppe Marotta
Università degli Studi di Modena e Reggio Emilia

  1. The Quiet Revolution and the Family: Gender Composition of Tertiary Education and Early Fertility Patterns By Alena Bičáková; Štěpán Jurajda
  2. Synthesis Report on the Impact of Capital Use By Petrick, Martin; Kloss, Mathias
  3. Teenage Pregnancies and Births in Germany: Patterns and Developments By Cygan-Rehm, Kamila; Riphahn, Regina T.
  4. Health, Work and Working Conditions: A Review of the European Economic Literature By Thomas Barnay
  5. Beyond Good Intentions: The Decision-Making Process of Leaving the Family of Origin in Italy By Giulia Ferrari; Alessandro Rosina; Emiliano Sironi
  6. European competitiveness: A semi-parametric stochastic metafrontier analysis at the firm level By Michel Dumont; Bruno Merlevede; Glenn Rayp; Marijn Verschelde
  7. Retail price effects of feed-in tariff regulation By Maria Teresa Costa; Elisa Trujillo-Baute
  8. An illustrative note on the system price effect of wind and solar power - The German case By Jägemann, Cosima
  9. Changes in Family Policies and Outcomes: Is there Convergence? By Willem Adema; Nabil Ali; Olivier Thévenon
  10. Cross-Border Effects of Capacity Mechanisms in Electricity Markets By Elberg, Christina
  11. The Effects of Reducing the Entitlement Period to Unemployment Insurance Benefits By De Groot, Nynke; van der Klaauw, Bas
  12. Moving'diversely'towards'the'green'economy.'CO2'abating'techno organisational'trajectories'and'environmental'policy'in'EU'sectors. By Massimiliano Mazzanti; Ugo Rizzo
  13. Empirical Evidence of the Distributional Effects of the CAP in New EU Member States By Ciaian, Pavel; Pokrivcak, Jan; Kancs, d'Artis
  14. European Networking and Training for National Competition Enforcers (ENTRANCE 2012). Selected Case Notes By Giorgio Monti; Pier Luigi Parcu
  15. Women on Company Boards – An Example of Positive Action in Europe By Álvaro Oliveira; Michal Gondek
  16. Women's Role in the Swiss Economy By Richard Dutu
  17. Is Germany’s Energy Transition a case of successful Green Industrial Policy? Contrasting wind and solar PV By Pegels, Anna; Lütkenhorst, Wilfried
  18. The Performance Pay Premium: How Big Is It and Does It Affect Wage Dispersion? By Bryson, Alex; Forth, John; Stokes, Lucy

  1. By: Alena Bičáková; Štěpán 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, despite heterogeneous country-level evolution.
    Keywords: Field-of-Study Gender Segregation, Tertiary Graduates, Fertility
    JEL: I23 J13 J16
    Date: 2014–05–27
  2. By: Petrick, Martin; Kloss, Mathias
    Abstract: This paper examines the drivers of productivity in EU agriculture from a factor markets perspective. Using econometrically estimated production elasticities and shadow prices of factors for a set of eight EU member states, we focus on field crop farms represented in the FADN database for the years 2002-08. As it turned out that output reacts most elastically to materials input, we investigate this factor further and find different rationing regimes represented in different member states. Marginal return on materials is low in Denmark and West Germany, but significantly above typical market interest rates in East Germany, Italy and Spain. In the latter countries and in Denmark it also increased towards the end of the observed period. This finding is consistent with a perception of tightening funding access, possibly induced or reinforced by the unfolding financial crisis. Marginal returns to land, labour and fixed capital are generally low. We conclude that the functioning of factor markets plays a crucial role for productivity growth, but that factor market operations display considerable heterogeneity across EU member states.
    Keywords: Agricultural Finance,
    Date: 2013–08–06
  3. By: Cygan-Rehm, Kamila (University of Erlangen-Nuremberg); Riphahn, Regina T. (University of Erlangen-Nuremberg)
    Abstract: We study the development of teenage fertility in East and West Germany using data from the German Socioeconomic Panel (SOEP) and from the German Mikrozensus. Following the international literature we derive hypotheses on the patterns of teenage fertility and test whether they are relevant in the German case. We find that teenage fertility is associated with teenage age and education, with the income of the teenager's family, with migration status, residence in East Germany, and aggregate unemployment. Our evidence supports countercyclical teenage fertility.
    Keywords: teenage fertility, abortion, unemployment, East and West Germany, population economics
    JEL: J13 Z18 I00
    Date: 2014–05
  4. By: Thomas Barnay (ERUDITE - Equipe de Recherche sur l'Utilisation des Données Individuelles Temporelles en Economie - Université Paris-Est Créteil Val-de-Marne (UPEC) : EA437 - Université Paris-Est Marne-la-Vallée (UPEMLV), TEPP - Travail, Emploi et Politiques Publiques - CNRS : FR3435 - Université Paris-Est Marne-la-Vallée (UPEMLV))
    Abstract: Economists have traditionally been very cautious when studying the interaction between employment and health because of the two-way causal relationship between these two variables: health status influences the probability of being employed and, at the same time, working affects the health status. Because these two variables are determined simultaneously, researchers control endogeneity skews (e.g., reverse causality, omitted variables) when conducting empirical analysis. With these caveats in mind, the literature finds that a favourable work environment and high job security lead to better health conditions. Being employed with appropriate working conditions plays a protective role on physical health and psychiatric disorders. By contrast, non-employment and retirement are generally worse for mental health than employment, and overemployment has a negative effect on health. These findings stress the importance of employment and of adequate working conditions for the health of workers. In this context, it is a concern that a significant proportion of European workers (29%) would like to work fewer hours because unwanted long hours are likely to signal a poor level of job satisfaction and inadequate working conditions, with detrimental effects on health. Thus, in Europe, labour-market policy has increasingly paid attention to job sustainability and job satisfaction. The literature clearly invites employers to take better account of the worker preferences when setting the number of hours worked. Overall, a specific "flexicurity" (combination of high employment protection, job satisfaction and active labour-market policies) is likely to have a positive effect on health.
    Keywords: work, health, working conditions, employment, causality, selection
    Date: 2014–07–24
  5. By: Giulia Ferrari; Alessandro Rosina; Emiliano Sironi
    Abstract: It is well established that the departure from the parental home of young Italian adults occurs at a particularly late age, especially when compared to northern European countries. Moreover, in Italy a large gap exists between young peopleÕs aspirations and their subsequent realization. This study aims to explore the factors favouring or hampering the successful achievement of residential independence from the family of origin. Using data from the longitudinal surveys ÒFamily and Social SubjectsÓ, carried out by the Italian National Institute of Statistics (Istat) in 2003 and 2007, we analyze leaving home as a mid term decision-making process. Our results provide empirical evidence that the inability to find a stable job reduces young adultsÕ autonomy. Net of employment status, attitudes and social norms also have an important effect on the intention to leave the family home. The socio-cultural status of the family of origin specifically favours the successful realization of the behaviour. Notably, this effect is gender-specific, with women more influenced by the mother and men by the father.
    Date: 2014–03
  6. By: Michel Dumont (Federal Planning Bureau; Department of general economics, Ghent University); Bruno Merlevede (CERISE, Ghent University; Department of general economics, Ghent University); Glenn Rayp (SHERPPA, Ghent University; Department of general economics, Ghent University); Marijn Verschelde (SHERPPA, Ghent University; Department of general economics, Ghent University; Faculty of Economics and Business, Katholieke Universiteit Leuven)
    Abstract: In this paper a semiparametric stochastic metafrontier approach is used to obtain insight into firmlevel competitiveness in Europe. We differ from standard TFP studies at the firm level as we simultaneously allow for inefficiency, noise and do not impose a functional form on the input-output relation. Using AMADEUS firm-level data covering 10 manufacturing sectors from seven EU15 countries, (i) we document substantial, persistent differences in competitiveness (with Belgium and Germany as benchmark countries and Spain lagging behind) and a wide technology gap, (ii) we confirm the absence of convergence in TFP between the seven selected countries, (iii) we confirm that the technology gap is more pronounced for smaller firms, (iv) we highlight the role of post-entry growth for competitiveness.
    Keywords: competitiveness, cross-country analysis, firm heterogeneity, total factor productivity, post-entry growth
    JEL: C14 D24 L25 M13 O33
    Date: 2014–07
  7. By: Maria Teresa Costa (Universitat de Barcelona & IEB); Elisa Trujillo-Baute (Universitat de Barcelona & IEB)
    Abstract: The feed-in tariff regulation is the wider spread promotion scheme used to encourage the take-up and development of generation from renewable energy sources in the EU, and the costs of resources devoted to this promotion are usually borne by final consumers. Two components of the electricity retail price are expected to be influenced by feed-in tariff regulation: the incentive to those firms producing electricity from renewable energy sources and the wholesale price of electricity. In this study we analyze the effects that feed-in tariff regulation has on electricity retail price for industrial consumers. This analysis is performed by estimating the relative intensity of the effects from the cost of incentives for electricity generation under the feed-in tariff and the electricity wholesale price over the Spanish industrial retail price. Especial attention is devoted to technology-specific considerations, as well as short and long run effects. In general, results show that there is not a strong link between the retail and wholesale market for Spanish industrial consumers. Moreover, taking into account technology-specific characteristics, results indicates that an increase of solar generation leads to a higher increase in the industrial retail price than in the case of a proportional increase of wind generation. This implies that, when evaluating the feed-in tariff regulation impact on the industrial retail price, the cost of incentives effect prevails over the wholesale price effect, and this is stronger for solar than for wind generation.
    Keywords: Electricity prices, feed-in-tariff, retail market, wholesale market
    JEL: L11 L94 L51 L52
    Date: 2014
  8. By: Jägemann, Cosima (Energiewirtschaftliches Institut an der Universitaet zu Koeln)
    Abstract: Exposing wind and solar power to the market price signal allows for cost-efficient investment decisions, as it incentivizes investors to account for the marginal value (MV el) of renewable energy technologies. As shown by Lamont (2008), the MV el of wind and solar power units depends on their penetration level. More specifically, the MV el of wind and solar power units is a function of the respective unit's capacity factor and the covariance between its generation profile and the system marginal costs. The latter component of the MV el (i.e., the covariance) is found to decline as the wind and solar power penetration increases, displacing dispatchable power plants with higher short-run marginal costs of power production and thus reducing the system marginal costs in all generation hours. This so called `system price effect' is analyzed in more detail in this paper. The analysis complements the work Lamont (2008) in two regards. First of all, an alternative expression for the MV el of wind and solar power units is derived, which shows that the MV el of fluctuating renewable energy technologies depends not only on their own penetration level but also on a variety of other parameters that are specific to the electricity system. Second, based on historical wholesale prices and wind and solar power generation data for Germany, a numerical `ceteris paribus' example for Germany is presented which illustrates that the system price effect is already highly relevant for both wind and solar power generation in Germany.
    Keywords: Fluctuating generation technologies; wind power; solar power; system price effect
    JEL: Q42
    Date: 2014–07–12
  9. By: Willem Adema; Nabil Ali; Olivier Thévenon
    Abstract: This paper presents new information on trends in family and child outcomes and policies over the past decades, in order to assess whether there has been any convergence over time across OECD and EU countries. Important drivers of population structure such as life expectancy and fertility rates are becoming more similar across countries as are marriage and divorce rates. Increased educational attainment has contributed to greater female employment participation and convergence therein across countries. Child well-being outcomes show a more mixed pattern with improvements and convergence in infant mortality, but varying trends in child poverty across countries.
    Keywords: female employment, Taxes and Benefits, Child Care and Parental leave, Family and Child outcomes
    JEL: D1 J12 J13 J18
    Date: 2014–07–11
  10. By: Elberg, Christina (Energiewirtschaftliches Institut an der Universitaet zu Koeln)
    Abstract: To ensure security of supply in liberalized electricity markets, different types of capacity mechanisms are currently being debated or have recently been implemented in many European countries. The purpose of this study is to analyze the cross-border effects resulting from different choices on capacity mechanisms in neighboring countries. We consider a model with two connected countries that differ in the regulator's choice on capacity mechanism, namely strategic reserves or capacity payments. In both countries, competitive firms invest in generation capacity before selling electricity on the spot market. We characterize market equilibria and find the following main result: While consumers' costs may be the same under both capacity mechanisms in non-connected countries, we show that the different capacity mechanisms in interconnected countries induce redistribution effects. More precisely, we find that consumers' costs are higher in countries in which reserve capacities are procured than in countries in which capacity payments are used to ensure the targeted reliable level of electricity.
    Keywords: Electricity Markets; Capacity Mechanisms; Cross-Border Effects
    JEL: Q41
    Date: 2014–07–31
  11. By: De Groot, Nynke (Free University Amsterdam); van der Klaauw, Bas (VU University Amsterdam)
    Abstract: This paper exploits a substantial reform of the Dutch UI law to study the effect of the entitlement period on job finding and subsequent labor market outcomes. Using detailed administrative data covering the full population we find that reducing the entitlement period increases the job finding rate, but decreases the job quality. Unemployed workers accept more often temporary jobs with lower wages and fewer working hours. Therefore, they also change jobs more frequently. The reform did not affect total post-unemployment earnings indicating that the positive effects on job finding and job turnover cancel out the negative effects on job quality. We also observe a spike in job finding around benefits exhaustion even, although more modest, for individuals who do not experience a drop in benefits level when moving to welfare.
    Keywords: unemployment benefits entitlement, job finding, job quality, difference-in-differences, duration model
    JEL: J64 J65 C21 C41
    Date: 2014–07
  12. By: Massimiliano Mazzanti (Dipartimento di Economia e Management, Università  di Ferrara and SEEDS - Sustainability Environmental Economics and Dynamic Studies.); Ugo Rizzo (Dipartimento di Economia e Management, Università  di Ferrara.)
    Abstract: This paper investigates, from ex ante perspectives, potential techno- organisational dynamics aimed at reducing GHG emissions in the EU by 2030 and 2050. We take a qualitative view by exploiting interviews with representatives from principal manufacturing sectors in the EU. The novel value of this analysis is in its focus on 'sectors', which, following neo-Schumpeterian theory, are key 'players' in the technological domain. From a conceptual point of view, we mainly refer to the integrated concepts of sector and national systems of innovation which have consolidated into innovation-oriented evolutionary theory: The EU is characterized by national sector specialisations that emerge from historical developments and markets effects, but also from industrial, innovation and environmental policy effects. In this way this work complements more consolidated quantitative econometric and modelling based analyses, as it presents sector-specific techno-organisational options to help reach the decarbonisation targets. We assess the feasibility of those targets from technological and economic perspectives: specific emphasis is put on the smooth or 'radical' change-driven transition towards a greener economy. Both market and policy factors are considered. The assessment of experts' qualitative responses, together with main outcomes from the literature, shows that heavy industrial sectors share some similarities but also key distinctions in relation to their past and future responses to market and policy dynamics. Their specificities should be taken into consideration when defining the specific design of the future EU policy package for energy efficiency and CO2 abatement at EU and national levels.
    Keywords: techno-organisational change, climate change, EU 2030 2050 targets, sectors, eco-innovations.
    JEL: L52 O33 Q58
    Date: 2014–05
  13. By: Ciaian, Pavel; Pokrivcak, Jan; Kancs, d'Artis
    Abstract: This study, carried out in the context of the Factor Markets research project, investigates the impact of the SAPS (Single Area Payment Scheme) on farmland rental rates in the new EU member states. Using a unique set of farm level panel data with 20,930 observations for 2004 and 2005 we are able to control for important sources of endogeneity. According to our results, the SAPS has a positive and statistically significant impact on land rents in the EU. However, the estimated incidence is smaller than predicted theoretically. Land rents capture only 19 cents of the marginal SAPS euro, and around 10% of the SAPS benefit non-farming landowners through higher farmland rental prices. As the share of rented land is higher in corporate farms than individual ones, family farms benefit more from the SAPS than corporate farms do.
    Keywords: Agricultural policy, decoupled subsidies, capitalisation, land value, Land Economics/Use, L11, Q11, Q12, Q15, Q18, P32, R12,
    Date: 2013–08–06
  14. By: Giorgio Monti; Pier Luigi Parcu
    Abstract: The working paper includes a collection of the case notes written by the national judges who attended the European Networking and Training for National Competition Enforcers (ENTraNCE 2012). The training program was organized by the RSCAS between September 2012 and June 2013 with the financial contribution of DG Competition of the European Commission. The case notes included in the working paper summarize judgments of new EU Member States and candidate countries related to different aspects of competition law enforcement. The working paper thus aims at increasing the understanding of the challenges faced by the national judiciary in enforcing national and EU competition in the context of the decentralized regime of competition law enforcement introduced by Reg. 1/2003.
    Keywords: Competition law, Art. 101 TFEU, Art. 102 TFEU, Reg. 1/2003, judicial training, national judges
    Date: 2014–06
  15. By: Álvaro Oliveira; Michal Gondek
    Abstract: In the last decade there has been a rising pressure in Europe to increase the number of women in the boards of large companies. Starting with Norway in 2003, several countries adopted legislation for this purpose. Building on this evolution, in November 2012 the European Commission presented a draft Directive applicable to big companies listed on the stock exchange. After describing these developments, the paper examines the case law of EU Court of Justice on positive action for women in employment. On that basis, it is suggested that the Court could accept the Commission’s proposal as compatible with the principle of equality. Finally, the paper puts the measures in favour of women in company boards, as an example of positive action, in the context of other national measures in favour of women and in favour of other groups - such as persons with disabilities and ethnic minorities.
    Keywords: European law, economic law, fundamental/human rights, gender policy, harmonization, non-discrimination, preliminary rulings
    Date: 2014–07
  16. By: Richard Dutu
    Abstract: Swiss women are now as well educated as their male counterparts. However, progress remains to be made in the job market where both the supply and price of female labour are below that of men. While the participation rate for women is high and rising, it is offset by a heavy incidence of part-time work, reflecting both personal preferences and factors that limit their labour supply. The lack and high cost of childcare options for parents, as well as burdensome marginal income tax rates for second earners, create disincentives to work more. A falling but persistent net (i.e. unexplained) wage gap of about 7% in favour of men, coupled with under-representation of women as managers and entrepreneurs, further reduce the incentive for women to take full advantage of their high levels of human capital. Priority should be given to removing those barriers by increasing public spending on childcare and out-of-school-hours care at the cantonal and municipal levels. Existing regulations regarding childcare provision should also be investigated to see whether a broader range of price and quality childcare options is feasible. The implicit tax penalty for married women should also be removed, as the Federal Council is currently considering. More flexibility in working arrangements could further alleviate women’s cost of reconciling work and family life. For instance, facilitating flexi-time, annualised hours, job-sharing, part-time and telework options for both women and men, and creating paternity and/or consecutive, take-it-or-leave-it parental leave could facilitate transition in and out of the labour market. Increasing competition in product markets should help reduce the wage gap by replacing old habits with the hunt for talent regardless of gender. Finally, a corporate governance code in favour of a more equal representation of women in leadership positions, and setting ambitious quantitative targets for women on boards combined with the “Comply or Explain” practise, or quotas, should help remove the so-called glass ceiling. This Working Paper relates to the 2013 OECD Economic Review of Switzerland (
    Keywords: education, Switzerland, labour market, gender, wage gap, leadership
    JEL: H5 I2 J16 J2 J3
    Date: 2014–07–15
  17. By: Pegels, Anna; Lütkenhorst, Wilfried
    Abstract: In this paper, we address the challenge of Germany’s energy transition (Energiewende) as the centrepiece of the country’s green industrial policy. In addition to contributing to global climate change objectives, the Energiewende is intended to create a leading position for German industry in renewable energy technologies, boost innovative capabilities and create employment opportunities in future growth markets at the least possible cost. The success in reaching these aims, and indeed the future of the entire concept, is hotly debated. The paper aims to provide an up-to-date assessment of what has become a fierce controversy by comparing solar photovoltaic (PV) and wind energy along five policy objectives: 1) competitiveness, 2) innovation, 3) job creation, 4) climate change mitigation, and 5) cost. We find mixed evidence that Germany reaches its green industrial policy aims at reasonable costs. Wind energy seems to perform better against all policy objectives, while the solar PV sector has come under intense pressure from international competition. However, this is only a snapshot of current performance, and the long term and systemic perspective required for the energy sector transformation suggests a need for a balanced mix of a variety of clean energy sources.
    Keywords: Green industrial policy; renewable energies; Germany
    JEL: O3 O31 O38 Q2 Q42 Q48 Q57
    Date: 2014
  18. By: Bryson, Alex (National Institute of Economic and Social Research (NIESR)); Forth, John (National Institute of Economic and Social Research (NIESR)); Stokes, Lucy (National Institute of Economic and Social Research (NIESR))
    Abstract: Using nationally representative linked employer-employee data we find one-quarter of employees in Britain are paid for performance. The log hourly wage gap between performance pay and fixed pay employees is .36 points. This falls to .15 log points after controlling for observable demographic, job and workplace characteristics. It falls still further to .10 log points when comparing "like" employees in the same workplace, indicating that performance pay contracts are used in higher paying workplaces. The premium rises markedly as one moves up the wage distribution: it is seven times higher at the 90th percentile than it is at the 10th percentile in the wage distribution (.42 log points compared to .06 log points).
    Keywords: wages, wage inequality, performance pay, bonuses
    JEL: J33
    Date: 2014–07

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