nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2014‒12‒13
twenty papers chosen by
Giuseppe Marotta
Università degli Studi di Modena e Reggio Emilia

  1. Job Insecurity, Employability, and Health: An Analysis for Germany across Generations By Otterbach, Steffen; Sousa-Poza, Alfonso
  2. Happiness matters: the role of well-being in productivity By Charles Henri DiMaria; Chiara Peroni; Francesco Sarracino
  3. Length of Stay in the Host Country and Educational Achievement of Immigrant Students: The Italian Case By Di Liberto, Adriana
  4. Appropriability mechanisms, innovation and productivity: Evidence from the UK By Hall B.H.; Sena V.
  5. The regional impact of EU association agreements: lessons for the ENP from the CEE experience By Vassilis Monastiriotis; Dimitris Kallioras & George Petrakos
  6. Housing and health By Angel, Stefan; Bittschi, Benjamin
  7. Innovation of knowledge intensive service firms in urban areas By Hammer, Andrea
  8. Temporal and Locational Flexibility of Work, Working-Time Fit, and Job Satisfaction By Possenriede, Daniel; Plantenga, Janneke
  9. Reemployment and Substitution Effects from Increased Activation: Evidence from Times of Crisis By Martins, Pedro S.; Pessoa e Costa, Sofia
  10. Innovation and firm collaboration: An exploration of survey data. By Bjerke, Lina; Johansson, Sara
  11. Bowling Alone or Bowling at All? The Effect of Unemployment on Social Participation By Lars Kunze; Nicolai Suppa
  12. Coaching disadvantaged young people: Evidence from firm level data By Mohrenweiser, Jens; Pfeiffer, Friedhelm
  13. Does the extension of primary care practice opening hours reduce the use of emergency services? By M. Lippi Bruni; I. Mammi; C. Ugolini
  14. Migration, Economic Crisis and Adjustment in the UK By Clark, Ken; Drinkwater, Stephen; Robinson, Catherine
  15. Do Entrepreneurs Really Earn Less? By Alina Sorgner; Michael Fritsch; Alexander Kritikos
  16. The European Climate Policy is Ambitious: Myth or Reality? By Catherine Benjamin; Isabelle Cadoret; Marie-Hélène Hubert
  17. Wages and return to work of injured workers By Monica Galizzi; Roberto Leombruni; Lia Pacelli; Antonella Bena
  18. Housing Collateral, Credit Constraints and Entrepreneurship - Evidence from a Mortgage Reform By Thais Lærkholm Jensen; Søren Leth-Petersen; Ramana Nanda
  19. 2000 Families: identifying the research potential of an origins-of migration studies By Ayse Guveli; Harry Ganzeboom; Helen Baykara-Krumme; Lucinda Platt; Şebnem Eroğlu; Niels Spierings; Sait Bayrakdar; Efe K Sozeri; Bernhard Nauck
  20. Human Values and Consumer Preferences for Extrinsic Credence Attributes in the German and Italian Markets for New Potatoes By Fitzsimmons, Jill Ann; Colantuoni, Francesca; Cicia, Gianni; Del Giudice, Teresa

  1. By: Otterbach, Steffen (University of Hohenheim); Sousa-Poza, Alfonso (University of Hohenheim)
    Abstract: In this paper, we use 12 waves of the German Socio-Economic Panel to examine the relationship between job insecurity, employability and health-related well-being. Our results indicate that being unemployed has a strong negative effect on life satisfaction and health. They also, however, highlight the fact that this effect is most prominent among individuals over the age of 40. A second observation is that job insecurity is also associated with lower levels of life satisfaction and health, and this association is quite strong. This negative effect of job insecurity is, in many cases, exacerbated by poor employability.
    Keywords: job insecurity, employment, employability, well-being, health, Germany
    JEL: J21 J22
    Date: 2014–08
  2. By: Charles Henri DiMaria; Chiara Peroni; Francesco Sarracino
    Abstract: This article is about the link between people’s subjective well-being, defined as an evaluation of one’s own life, and productivity. Our aim is to test the hypothesis that subjective well-being contributes to productivity using a two step approach: first, we establish whether subjectivewell-being can be a candidate variable to study Total Factor Productivity; second, we assess how much subjective well-being contributes to productivity at aggregate level through efficiency gains. We adopt Data Envelopment Analysis to compute total factor productivity and efficiency indices using European Social Survey and AMECO data for 20 European countries. Results show that subjective well-being is an input and not an output to production.
    Keywords: productivity, subjective well-being, TFP, efficiency gains, life satisfaction, economic growth, DEA.
    JEL: E23 I31 O47
    Date: 2014–06
  3. By: Di Liberto, Adriana (University of Cagliari)
    Abstract: Using Italian data on language standardized tests for three different levels of schooling we investigate if the observed gap in educational attainments in 1st generation immigrants tends to lower the longer they stay in Italy, and if younger children tend to catch up faster than their older schoolmates. The analysis shows that the significant gap in language skills observed between 1st and 2nd generation immigrant students is mainly due to both the negative performance of immigrant children newly arrived in Italy, and the immigrant students' area of origin. Comparing the results across the different grades, we also find that this gap narrows at a different pace in the early or later years of an immigrant student's life. Overall, our results suggest the presence of a 'critical' age above which 1st generation immigrant students face a negative impact on their school performance, and that institutional and cultural factors play a role on immigrant language skills acquisition.
    Keywords: immigrant students, educational attainment, age at immigration
    JEL: J15 I21
    Date: 2014–10
  4. By: Hall B.H.; Sena V. (UNU-MERIT)
    Abstract: We use an extended version of the well-established Crepon, Duguet and Mairesse model 1998 to model the relationship between appropriability mechanisms, innovation and firm-level productivity. We enrich this model in several ways. First, we consider different types of innovation spending and study the differences in estimates when innovation spending rather than RD spending is used to predict innovation in the CDM model. Second, we assume that a firm simultaneously innovates and chooses among different appropriability methods formal or informal to protect the innovation. Finally, in the third stage, we estimate the impact of the innovation output conditional on the choice of appropriability mechanisms on firmsf productivity. We find that firms that innovate and rate formal methods for the protection of Intellectual Property IP highly are more productive than other firms, but that the same does not hold in the case of informal methods for the protection of a firmfs IP, except possibly for large firms as opposed to SMEs. We also find that this result is strongest for firms in the services, trade, and utility sectors, and negative in the manufacturing sector.
    Keywords: Firm Performance: Size, Diversification, and Scope; Technological Change; Research and Development; Intellectual Property Rights: General; Intellectual Property Rights;
    JEL: O34 O30 L25
    Date: 2014
  5. By: Vassilis Monastiriotis; Dimitris Kallioras & George Petrakos
    Abstract: The Eastern Enlargement of the EU saw a proliferation of association agreements with countries in the ‘near abroad’ under EU’s European Neighbourhood Policy framework. Although such agreements are considered to be strictly welfare-enhancing, there is very little evidence to show their economic effects, including their distributional consequences across space, separately from other concurrent processes (transition, internationalisation, capital deepening, etc). This paper draws on the experience of pre-accession agreements in Central and Eastern Europe to estimate the effect that such agreements had on regional growth, and thus on the long-run evolution of regional disparities, in the associated countries. We apply an event-analysis and exploit the country variation in the timing of these agreements to identify their distinctive effect on regional growth, using regional data at the NUTS3 levels covering the period from the early transition phase (1991/92) until the eruption of the financial crisis (2008). Our results provide strong evidence that EU association agreements accelerate growth; but show that this is far from evenly distributed across space – with denser, larger and more diversified regional economies gaining the most. We discuss what these findings imply for regional growth and spatial imbalances in the new wave of associated countries under the ENP.
    Keywords: East-Central Europe; Europe Agreements; regional development
    Date: 2014–10–16
  6. By: Angel, Stefan; Bittschi, Benjamin
    Abstract: Deprived housing conditions have long been recognized as a source of poor health. Nevertheless, there is scant empirical evidence of a causal relationship between housing and health. The literature identifies two different pathways by which housing deprivation affects health, namely, neighborhood effects and the effects of the individual dwelling unit. However, a joint examination of both pathways is absent from the literature. Moreover, endogeneity is a substantial concern in analyses of these two problems. Thus far, studies addressing endogeneity concerns have done so through experimental design or instrumental variables. While the first approach suffers from problems of external validity, we demonstrate the substantial diffculty in identifying robust and reliable instruments for the latter. Consequently, we adopt an alternative strategy to identify the causal effects of housing on health in 21 European countries by estimating fixed-effect models and considering both sources of endogeneity, neighborhoods and dwellings. Furthermore, using the panel dimension of our data, we reveal the accumulation dynamics of poor housing conditions. Our results indicate that living in poor housing is the chief socioeconomic determinant of health over the four-year observation period and that bad housing is a decisive, causal transmission pathway by which socioeconomic status affects health.
    Keywords: Housing,Health,Europe,EU-SILC data,Fixed-effects model
    JEL: I14 I18 I38
    Date: 2014
  7. By: Hammer, Andrea
    Abstract: This paper investigates the agglomeration of Knowledge Intensive Service (KIS) firms in urban areas. In accordance with the Regional Innovation Systems approach it is argued that cities provide crucial innovation advantages working as centripetal forces for KIS. Applying multivariate logit regressions to a company survey of the city of Karlsruhe, the second largest city of the German federal state of Baden-Württemberg, shows positive effects of local cooperation and urban infrastructures on the innovation probability of KIS firms. However, the effects vary with the type of innovation pursued, thus demonstrating a high complexity of local relations conducive to KIS firm innovation.
    Keywords: Knowledge Intensive Services,Regional Innovation Systems,urban innovation,innovation in services,local cooperation,urban infrastructure
    JEL: R48 L92 Q55
    Date: 2014
  8. By: Possenriede, Daniel (Utrecht School of Economics); Plantenga, Janneke (Utrecht University)
    Abstract: In this paper we analyse the effects of arrangements that provide temporal and locational flexibility of work (TLF), namely flexi-time, telehomework, and part-time work, on employees' satisfaction with the fit between working time and private life and their overall job satisfaction. TLF arrangements provide employees with more control over their working life and therefore are likely to improve on the match between paid work and private life. Based on Dutch household panel data, the results show that TLF arrangements, flexi-time in particular, are generally associated with sizeable increases in satisfaction with working-time fit and overall job satisfaction. Somewhat surprisingly, the effects hardly differ between male and female employees and between employees with and without children. Temporal and locational flexibility apparently appeals not only to employees with family responsibilities but more general to all employees.
    Keywords: flexi-time, job satisfaction, locational flexibility, part-time work, telehomework, temporal flexibility, working-time fit
    JEL: J22 J28 M52 M54
    Date: 2014–08
  9. By: Martins, Pedro S. (Queen Mary, University of London); Pessoa e Costa, Sofia (Catholic University Louvain)
    Abstract: Although activation services such as monitoring, training, or job subsidies have been shown to increase exits from unemployment, there is little comprehensive evidence about the effects of activation during recessions. Here we evaluate a large activation programme introduced in Portugal in 2012, a time of very high unemployment. This programme required specific unemployment benefit recipients to meet jobcentre caseworkers and then participate in active labour market policies. Our analysis draws on rich longitudinal data, the programme's focus on those unemployed for at least six months, and fuzzy regression discontinuity methods. We find that, despite the weak labour market, the programme is very successful as it doubles the monthly reemployment probability. The results are robust to a number of checks, including a falsification exercise based on pre-programme data and an analysis of non-employment and income effects. Moreover, in a novel IV approach using information on all unemployed, we find no evidence of substitution effects such as decreased transitions to employment amongst non-eligible individuals.
    Keywords: public employment services, job search, public policy evaluation
    JEL: J64 J68 J22
    Date: 2014–10
  10. By: Bjerke, Lina (Jönköping International Business School (JIBS), Economics, Finance and Statistics.); Johansson, Sara (Jönköping International Business School (JIBS), and Centre of Excellence for Science and Innovation Studies (CESIS).)
    Abstract: Recent literature on firm innovation emphasize the importance of combinations of different knowledge sources in innovation processes. Moreover, the literature on firm collaboration has evolved stepwise: (1) knowledge networks tend to be geographically bounded, and (2) proximity in other dimensions than physical distance, such as cognitive and organisational proximity, may influence the evolution and influences of networks. The results from this empirical study support these ideas by indicating that firms’ probability to innovate is enhanced when they collaborate. However, not all types of collaborations are as important. By using data from a survey on innovation and collaboration of 636 firms in the county of Jönköping, Sweden, we find that extra-regional collaboration matters the most for the innovation performance of these firms. Moreover, collaborations tend to be most favourable for innovation when the collaborators involved has some organisational or cognitive proximity. Collaborations that imply vertical linkages in the value added chain appear to more important than horizontal linkages.
    Keywords: Innovation; innovation networks; innovation survey; proximity; firm collaboration
    JEL: C83 O31 R10
    Date: 2014–11–07
  11. By: Lars Kunze; Nicolai Suppa
    Abstract: This article examines the impact of unemployment on social participation for Germany using the German Socio-Economic Panel. We find significant negative, robust and, for some activities, lasting effects of unemployment on social participation. Causality is established by focussing on plant closures as exogenous entries into unemployment. Social norms, labor market prospects and the perception of individual failure are shown to be relevant for explaining these findings. Furthermore, our results not only (i) provide novel insights into the determinants of the unemployed’s unhappiness but also (ii) highlight an hitherto unexplored channel through which unemployment influences economic outcomes, namely by altering the long-run level of social capital, and (iii) point to an alternative explanation of unemployment hysteresis based on access to information.
    Keywords: Income redistribution; consumer credit; relative consumption motive; business cycles
    JEL: E21 E32 E44
    Date: 2014–10
  12. By: Mohrenweiser, Jens; Pfeiffer, Friedhelm
    Abstract: In Germany, apprenticeship training firms currently face a shrinking number of qualified school-leavers because of smaller birth cohorts and an increasing proportion of school leavers aiming for higher education. This paper investigates whether a programme that supports firms to train disadvantaged youth can reduce recruiting difficulties in apprentice training firms. Based on unique firm-level data from the metal and electronic industry in Baden-Württemberg from 2010 to 2013, we apply instrumental variable and difference-in-difference estimations and find no significant short-term causal impact of the programme.
    Keywords: disadvantaged youth,apprenticeship training,programme evaluation
    JEL: J11 J24 M51 L60
    Date: 2014
  13. By: M. Lippi Bruni; I. Mammi; C. Ugolini
    Abstract: Over-crowding in Emergency Departments (EDs) generates potential inefficiencies. Using regional administrative data, we investigate the impact of an increase in the accessibility of primary care on ED visits in Italy. We test whether extending practice opening hours up to 12 hours/day reduces inappropriate ED visits. We estimate count data models, considering different measures for ED visits recorded at the list level. Since the extension programme is voluntary, we also account for the potential endogeneity of participation, using a two-stage residual inclusion and a GMM approach. Our results show that improving primary care accessibility favours a more appropriate use of EDs.
    JEL: I11 I18 C31
    Date: 2014–11
  14. By: Clark, Ken (University of Manchester); Drinkwater, Stephen (University of Roehampton); Robinson, Catherine (University of Kent)
    Abstract: We examine changes in migration to the UK in the period leading up to the Great Recession and in its immediate aftermath. In so doing, we pay particular attention to the changing countries of origin of recent migration flows to the UK, especially in relation to migration from other parts of the EU. The evolving patterns of migrants' socio-economic characteristics and labour market outcomes are also analysed, including how these relate to changes in the economy and migration policy. Finally, we review evidence on the impact of migration on the UK labour market and government finances.
    Keywords: policy, migration, economic performance, United Kingdom
    JEL: F22 J61
    Date: 2014–08
  15. By: Alina Sorgner; Michael Fritsch; Alexander Kritikos
    Abstract: Based on representative micro data for Germany, we compare the incomes of self-employed with those of wage workers. Our results show that the median self-employed entrepreneur with employees earns significantly more than the median salaried employee, while the median solo entrepreneur earns less. However, solo entrepreneurship pays for those with a university entrance degree but no further professional qualification as well as for those who were in the upper percentiles of the income distribution in their previous salaried job. Surprisingly, the variation in hourly incomes of solo entrepreneurs is higher than that of entrepreneurs with employees.
    Keywords: Income, entrepreneurship, self-employment, start-ups, Germany
    JEL: L26 D22
    Date: 2014
  16. By: Catherine Benjamin (CREM UMR CNRS 6211, University of Rennes 1, France); Isabelle Cadoret (CREM UMR CNRS 6211, University of Rennes 1, France); Marie-Hélène Hubert (CREM UMR CNRS 6211, University of Rennes 1, France)
    Abstract: We investigate the carbon emission trends among the Member States by testing the assumption of -type convergence for per capita CO2 emissions, conditional upon per capita output and energy use per capita. Our results reveal that: EU-15 countries switch to a less carbon intensive economy from the early nineties, e-g, the relation emission growth/income is strictly negative. This result is robust to the inclusion of the new Member States. Thus, we argue that the decline in EU carbon emissions s a long term-trend and not the result of the economic crisis. Then, we discuss the eectiveness of the 20/20/20 climate package and the burden-sharing agreement. Some countries like Germany and Great-Britain can meet their carbon target without putting more eorts. Other historical Member States like France, Luxembourg, Sweden and Belgium can meet their carbon target by decreasing their energy use by 10%, ceteris paribus. Most of the New Member States can reach their target by increasing their energy per capita to the 1990 level while stabilizing their carbon emissions. This implies that their investment in renewable energy should be substantial.
    Keywords: Convergence, Dynamic Panel Data Models, Carbon Dioxide, European-Union, Climate Policy
    JEL: Q42 Q48
    Date: 2014–10
  17. By: Monica Galizzi; Roberto Leombruni; Lia Pacelli; Antonella Bena
    Abstract: This is the first analysis of determinants of the return to work of injured workers in an institutional setting where workers earnings are fully compensated during the disability spell. Employers carry the costs associated to the time off work; hence they could face an incentive to put pressure on workers to shorten their leave. We use a matched employer-employees panel data merged with Italian workers compensation records. We find that even when we control for measures of commitment and job security, workers with high wages and high relative wages (who are more costly for the employer) return to work sooner.
    Keywords: Return to Work; Injury; Workers’ Compensation; Relative wages; Commitment; Hazard models
    JEL: J22 J28
    Date: 2014
  18. By: Thais Lærkholm Jensen; Søren Leth-Petersen; Ramana Nanda
    Abstract: We study how a mortgage reform that exogenously increased access to credit had an impact on entrepreneurship, using individual-level micro data from Denmark. The reform allows us to disentangle the role of credit access from wealth effects that typically confound analyses of the collateral channel. We find that a $30,000 increase in credit availability led to a 12 basis point increase in entrepreneurship, equivalent to a 4% increase in the number of entrepreneurs. New entrants were more likely to start businesses in sectors where they had no prior experience, and were more likely to fail than those who did not benefit from the reform. Our results provide evidence that credit constraints do affect entrepreneurship, but that the overall magnitudes are small. Moreover, the marginal individuals selecting into entrepreneurship when constraints are relaxed may well be starting businesses that are of lower quality than the average existing businesses, leading to an increase in churning entry that does not translate into a sustained increase in the overall level of entrepreneurship.
    JEL: D14 D31 G21 G28 L26
    Date: 2014–10
  19. By: Ayse Guveli (University of Essex); Harry Ganzeboom (Free University Amsterdam); Helen Baykara-Krumme (Chemnitz University of Technology); Lucinda Platt (London School of Economics and Political Science); Şebnem Eroğlu (University Bristol); Niels Spierings (Radboud University Nijmegen); Sait Bayrakdar (University of Essex); Efe K Sozeri (Free University Amsterdam); Bernhard Nauck (Chemnitz University of Technology)
    Abstract: Despite extensive recent advances in the empirical and theoretical study of migration, certain critical areas in the analysis of European migration remain relatively underdeveloped both theoretically and empirically. Specifically, we lack studies that both incorporate an origin comparison and trace processes of intergenerational transmission across migrants over multiple generations and incorporating family migration trajectories. This paper outlines the development, data and design of such a study, the 2000 Families study, framed within a theoretical perspective of ‘dissimilation’ from origins and over generations. We term the study an origins-of-migration study, in that it captures the country of origin, the family origins and potentially the originating causes of migration processes and outcomes. The resulting data comprised nearly 2,000 migrant and non-migrant Turkish families with members across three or more generations, covering. 50,000 individuals. We reflect on the potential of this study for migration research.
    Keywords: Migration, Europe, Turkey, dissimilation, intergenerational transmission, originsof-migration study
  20. By: Fitzsimmons, Jill Ann; Colantuoni, Francesca; Cicia, Gianni; Del Giudice, Teresa
    Abstract: We explore the relationship between observable socio-demographic consumer characteristics, consumers’ unobservable human values as measured by Schwartz’ Portrait Values Questionnaire, and consumers’ preferences for extrinsic credence attributes on their purchases of new potatoes in two countries, Italy and Germany. Parallel marketing studies were conducted in each of the two markets, with the intention of comparing the impact of human values on purchases of new potatoes with several attributes (price, country of origin, carbon footprint certification, ethical certification, method of production, and packaging). Motivation for the study comes from the declining market share of the domestic early potato due to international competition. Applied methods include Principal Component Analysis and Latent Class Analysis.
    Keywords: Choice Model, Schwartz Values, Credence Attributes, New Potatoes, Agribusiness, Agricultural and Food Policy, Food Consumption/Nutrition/Food Safety, Marketing,
    Date: 2014

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