nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2014‒12‒24
thirty-six papers chosen by
Giuseppe Marotta
Università degli Studi di Modena e Reggio Emilia

  1. Does European high-speed rail affect the current level of air services? An EU-wide analysis By Frédéric Dobruszkes; Catherine Dehon; Moshe Givoni
  2. Your very private job agency: Job referrals based on residential location networks By Franziska Hawranek; Norbert Schanne
  3. Adaptation to Poverty in Long-Run Panel Data By Clark, Andrew E.; D'Ambrosio, Conchita; Ghislandi, Simone
  4. Local quality of government and migration. Evidence for European regions By Ketterer, Tobias; Rodriguez-Pose, Andres
  5. Does Connectivity Impact Innovation Performance in Rural Regions? By Pia Wassmann; Daniel Schiller; Stephan Thomsen
  6. Substitution between Fixed-line and Mobile Access: the Role of Complementarities By Grzybowski, Lukasz; Verboven, Frank
  7. The Welfare Impact of Parallel Imports: A Structural Approach Applied to the German Market for Oral Anti-diabetics By Duso, T.;; Herr, A.;; Suppliet, M
  8. Radical or incremental: Where does R&D policy hit? By Beck, Mathias; Lopes-Bento, Cindy; Schenker-Wicki, Andrea
  9. Understanding Child Deprivation in the European Union: The Multiple Overlapping Deprivation Analysis (EU-Moda) Approach By Yekaterina Chzhen; Chris De Neubourg; Marlous de Milliano; Ilze Plavgo; UNICEF Innocenti Research Centre
  10. Product Quality and Intra-Industry Trade By Tadashi Ito; Toshihiro Okubo
  11. When Does Education Matter? The Protective Effect of Education for Cohorts Graduating in Bad Times By Cutler, David M.; Huang, Wei; Lleras-Muney, Adriana
  12. Formal and informal volunteering and health across European countries By Fiorillo, Damiano; Nappo, Nunzia
  13. Spatial Typology of the Ageing Process in the European Union on the Level NUTS 2 Regions By Ivan ?otkovský
  14. European Cluster Networks ? Insights from 7th EU Framework Program By Mirko Titze; Matthias Brachert
  15. Public Opinion on Immigration: Has the Recession Changed Minds? By Hatton, Timothy J.
  16. How far away is a Single European Labor Market? By Krause, Annabelle; Rinne, Ulf; Zimmermann, Klaus F
  17. Occupational Tasks in the German Labour Market : an alternative measurement on the basis of an expert database By Dengler, Katharina; Matthes, Britta; Paulus, Wiebke
  18. European fiscal solidarity: An EU-wide optimal income tax approach By Seelkopf, Laura; Yang, Hongyan
  19. What types of firms tend to be more innovative: A study on Germany By Stephan Brunow; Valentina Nafts
  20. The role of capital income for top incomes shares in Germany By Bartels, Charlotte; Jenderny, Katharina
  21. Trade and Tasks: An Exploration over Three Decades in Germany By Sascha O. Becker; Marc-Andreas Muendler
  22. Closure in inter-regional knowledge networks: An application to the European co-publication network By Laurent Bergé
  23. Going abroad on regional shoulders: The role of spillovers on the composition of regional exports By Mariasole Bannò; Diego Giuliani; Enrico Zaninotto
  24. Child and Household Deprivation. A Relationship beyond Household Socio-Demographic Characteristics By Elena Bárcena-Martín; Maite Blázquez; Santiago Budría; Ana I. Moro Egido
  25. Does Business Regulation Matter for Banks in the European Union? By Mamatzakis, E
  26. Social inequalities in Europe: Facing the challenge By Allmendinger, Jutta; von den Driesch, Ellen
  27. Spatiotemporal patterns of Shrinking Cities in Europe 1990 - 2010 By Manuel Wolff; Thorsten Wiechmann
  28. Legal status, remittances and socio-economic impacts on rural household in Bangladesh: An empirical study of Bangladeshi migrants in Italy. By Mannan, Kazi Abdul; Farhana, Khandaker Mursheda
  29. A matter of life and death? Hospital distance and quality of care: Evidence from emergency room closures and myocardial infarctions* By Avdic, D.;
  30. Mobility and Progressive Taxation By Marcus Roller; Kurt Schmidheiny
  31. The household credit market after five years of crisis: evidence from the survey on income and wealth By Silvia Magri; Raffaella Pico
  32. Do municipal mergers reduce costs? Evidence from a German federal state By Blesse, Sebastian; Baskaran, Thushyanthan
  33. Cost Efficiency Analysis based on The DEA and StoNED Models: Case of Norwegian Electricity Distribution Companies By Cheng, Xiaomei; Bjørndal, Endre; Bjørndal, Mette
  34. How Does Fuel Taxation Impact New Car Purchases?: An Evaluation Using French Consumer-Level Data By Pauline Givord; Céline Grislain-Letrémy; Helene Naegele
  35. Research intensive clusters and regional innovation systems: a case study of mechatronics in Apulia By Massimo Florio; Julie Pellegrin; Emanuela Sirtori
  36. Business confidence and forecasting of housing prices and rents in large German cities By Konstantin Kholodilin

  1. By: Frédéric Dobruszkes; Catherine Dehon; Moshe Givoni
    Abstract: This paper analyses whether the current provision of air services in Europe is impacted by high-speed rail (HSR). An ex-post analysis is carried out considering 161 routes EU-wide using transnational data. We use censored regressions with special attention paid to the presence of outliers in the sample and to the potential problem of non-normality of error terms. It is found that shorter HSR travel times involve less air services, with similar impact on both airline seats and flights. This impact quickly drops between 2.0- and 2.5-h HSR travel time. The impact of HSR frequencies is much more limited. Hubbing strategies led by the airlines have the opposite effect from HSR, as hubs involve more air services. Airline/ HSR integration at the airport and cities being served by both central and peripheral stations have no significant impact. Metropolitan and national spatial patterns may help to better understand intermodal effects.
    Date: 2014
  2. By: Franziska Hawranek; Norbert Schanne
    Abstract: Your very private job agency: Job referrals based on residential location networks This paper analyzes job referral effects that are based on residential location. We use georeferenced record data for the entire working population (liable to social security) and the corresponding establishments in the Rhine-Ruhr metropolitan area, which is Germany's largest (and EU's second largest) metropolitan area. We estimate the propensity of two persons to work at the same place when residing in the same neighborhood (reported with an accuracy of 500m×500m grid cells), and compare the effect to people living in adjacent neighborhoods. We find a significant increase in the probability of working together when living in the same neighborhood, which is stable across various specifications. Additionally, we look at how referral effects differ for various groups like age, skill, ethnic groups and industry sectors. We find that especially low skilled workers make use of residential networks for job search, as well as some groups of immigrants. Especially migrants from the new EU countries as well as Italians and people from former Yugoslavia have a highly increased probability of working together when they share the same neighborhood. This is clear sign for network effects especially for some immigrant groups in the German labor market.JobFurther, we are able to investigate a number of issues in order to deepen the insight on actual job referrals: distinguishing between the effects on working in the same neighborhood and working in the same establishment ? probably the more accurate measure for job referrals ? shows that the latter yield overall smaller effects. Further, we find that clusters in employment although having a significant positive effect play only a minor role for the magnitude of the referral effect, which makes us confident that what we find is actually related to a true referral effect and not some spurious correlation. When we exclude short distance commuters, we find the same probabilities of working together, which reinforces our interpretation of this probability as a network effect. The paper investigates the effect of living together on the probability of working together. We find strong evidence for a positive and highly significant relationship, which is robust across several specifications and robustness tests, addressing common issues on the identification of neighborhood effects. JEL Classification: J20, J46, R23
    JEL: J20 R23
    Date: 2014–11
  3. By: Clark, Andrew E. (Paris School of Economics); D'Ambrosio, Conchita (University of Luxembourg); Ghislandi, Simone (Bocconi University)
    Abstract: We consider the link between poverty and subjective well-being, and focus in particular on potential adaptation to poverty. We use panel data on almost 54,000 individuals living in Germany from 1985 to 2012 to show first that life satisfaction falls with both the incidence and intensity of contemporaneous poverty. We then reveal that there is little evidence of adaptation within a poverty spell: poverty starts bad and stays bad in terms of subjective well-being. We cannot identify any cause of poverty entry which explains the overall lack of poverty adaptation.
    Keywords: income, poverty, subjective well-being, adaptation, SOEP
    JEL: I31 D60
    Date: 2014–11
  4. By: Ketterer, Tobias; Rodriguez-Pose, Andres
    Abstract: In this paper we investigate the impact of local quality of government on the attractiveness of European regions to migrants. The analysis is based on panel data estimations of 254 regions for the period between 1995 and 2009. Different instrumental variable techniques have been employed in order to assess the extent to which differences in local quality of government affect migration decisions and to account for potential endogeneity concerns. The results point towards an important influence of specific factors related to the regional quality of government, such as the fight against corruption or government effectiveness, on the ability of European regions to attract future residents.
    Keywords: Europe; Institutions; Net migration; Population change; Quality of Government; Regions
    JEL: O43 R23 R50
    Date: 2014–05
  5. By: Pia Wassmann; Daniel Schiller; Stephan Thomsen
    Abstract: There is a broad consensus in the literature in that R&D is a precondition for innovation and in turn, for economic growth. On the regional level, this implies that regions with a high stock of R&D should reveal better results when it comes to economic performance. This presumption has lead policy-makers to focus especially on strengthening the regional stock of R&D as an instrument to foster the regional innovation performance. However, the relation between regional R&D and economic growth may not be as straightforward and an exclusive concentration on R&D may not be appropriate for stimulating regional innovation. Thus, empirical evidence shows that some regions perform well in economic terms, irrespective of their relatively low values of R&D. One of these regions is the German region of Lower Bavaria. This region performs well above the German average in terms of economic growth and employment. At the same time, the regional performance on the traditional R&D indicators as patents or the share of human resources in science and technology is below average. Yet, despite the disadvantageous values on the latter, a recent study of regional firms has indicated that over 60% have introduced either a technological or non-technological innovation in the past three years. One explanation for this contra-intuitive finding emerges from the potential connectivity of regional firms, enabling them to acquire R&D from external knowledge sources. This aspect is in focus of this paper. Thus, based on original firm-level data, we investigate how connectivity impacts innovation performance of firms in the low R&D region of Lower Bavaria. The idea that innovation is a result of an interactive process and that firms have to acquire external knowledge in order to innovate is certainly not new. However, despite the fact that regional connectivity especially of low R&D regions has gained considerable importance, not at least reflected by the current EU innovation policy debate, there are only a few studies that assess the association between cooperation and innovation in regions with low internal R&D in a systematic, quantitative manner. Rather, the majority of studies focus on high-tech regions with strong initial R&D. With the emphasis on a rural region with mainly low- and medium-tech industries, this paper aims to bridge this gap and to study the relation in a type of region that has not been comprehensively examined, yet. Moreover, by distinguishing between the geographical and functional dimension of cooperation as well as by the consideration of both, technological and non-technological forms of innovation, we provide a more encompassing view on how firms in this type of regions use cooperation to increase their innovation potential.
    Keywords: innovation; connectivity; low-tech industries; rural region; R&D; Germany;
    JEL: R11 O18 O31 L25
    Date: 2014–11
  6. By: Grzybowski, Lukasz; Verboven, Frank
    Abstract: We study substitution from fixed-line to mobile voice access, and the role of various complementarities that may influence this process.We use rich survey data on 160,363 households from 27 EU countries during 2005-2012. We estimate a discrete choice model where households may choose one or both technologies, possibly in combination with internet access. We obtain the following main findings. First, there is significant fixed-to mobile substitution, especially in recent years: without mobile telephony, fixed-line penetration would have been 14% higher in 2012. But there is substantial heterogeneity across households and EU regions, with a stronger substitution in Central and Eastern European countries. Second, the decline in fixed telephony has been slowed down because of a significant complementarity between fixed-line and mobile connections offered by the fixed-line incumbent operator. This gives the incumbent a possibility to maintain to some extent its position in the fixed-line market, and to leverage it into the mobile market. Third, the decline in fixed telephony has been slowed down because of the complementarity with broadband internet: the introduction of DSL avoided an additional decline in fixed-line penetration of almost 9% in 2012. The emergence of fixed broadband has thus been the main source through which incumbents maintain their strong position in the fixed-line network.
    Keywords: broadband access; fixed-to-mobile substitution; incumbency advantage
    JEL: L13 L43 L96
    Date: 2014–06
  7. By: Duso, T.;; Herr, A.;; Suppliet, M
    Abstract: We investigate the welfare impact of parallel imports using a large panel data set containing monthly information on sales, ex-factory prices, and further product characteristics for all 700 anti-diabetic drugs sold in Germany between 2004 and 2010. We estimate a two-stage nested logit model of demand and, based on an oligopolistic model of multiproduct firms, we then recover the marginal costs and markups. We finally evaluate the effect of the parallel imports’ policy by calculating a counter-factual scenario without parallel trade. According to our estimates, parallel imports reduce the prices for patented drugs by 11% and do not have a significant effect on prices for generic drugs. This amounts to an increase in the demand-side surplus by e19 million per year (or e130 million in total) which is relatively small compared to the average annual market size of around e227 million based on ex-factory prices. The variable profits for the manufacturers of original drugs from the German market are reduced by e18 million (or 37%) per year when parallel trade is allowed, yet only one third of this difference is appropriated by the importers.
    Keywords: parallel imports; pharmaceuticals; structural models; anti-diabetic drugs;
    JEL: I11 I18 L13 L51
    Date: 2014–04
  8. By: Beck, Mathias; Lopes-Bento, Cindy; Schenker-Wicki, Andrea
    Abstract: This study investigates the efficacy of public R&D support. Compared to most existing studies, we do not stop at substitution effects or general innovation outcome measures, but we are interested in knowing where the policy effect is highest: on innovation close to the market (i.e. incremental innovation) or on innovation that is still far from the market and hence more risky and radical. Using firm level data from the period 1999 to 2011, we find that the policy hits where the market failure is highest, that is, for radical innovation. Taking into account that the Swiss funding agency encourages collaboration, we find no evidence that the impact of the policy is positively effected by various R&D collaboration patterns.
    Keywords: R&D subsidies,collaborative innovation,diversity,innovation performance,radical innovation,incremental innovation,policy evaluation,treatment effects
    JEL: C14 C30 H23 O31 O38
    Date: 2014
  9. By: Yekaterina Chzhen; Chris De Neubourg; Marlous de Milliano; Ilze Plavgo; UNICEF Innocenti Research Centre
    Abstract: Poverty has serious consequences for children’s well-being as well as for their achievements in adult life. The Multiple Overlapping Deprivation Analysis for the European Union (EU-MODA) compares the living conditions of children across the EU member states, plus Iceland and Norway. Rooted in the established multidimensional poverty measurement tradition, EU-MODA uses the international framework of child rights to inform the construction of indicators and dimensions essential to children’s material well-being, taking into account the needs of children at various stages of their life cycle. The study contributes to the literature on monetary child poverty and material deprivation in the EU by analysing several dimensions of child deprivation individually and simultaneously, constructing multidimensional deprivation indices, and studying the overlaps between monetary poverty and multidimensional deprivation.
    Keywords: child poverty; child well-being; economic analysis; economic and social conditions; poverty alleviation;
    Date: 2014
  10. By: Tadashi Ito; Toshihiro Okubo
    Abstract: In this study, we argue that the conventional intra-industry trade (IIT) index does not directly address the quality issue and propose a methodology to make full use of unit-price gap information to deduce quality differences between simultaneously exported and imported products. By applying this measure to German trade data at the eight-digit level, we study the quality change of Chinese export goods in its IIT with Germany. We compare the case of China with those of Eastern European countries, which are also major trading partners of Germany. Our results show that the unit-value difference in IIT between Germany and Eastern European countries is clearly narrowing. However, China’s export prices to Germany are much lower than Germany’s export prices to China, and this gap has not narrowed over the last 23 years. This is at odds with the common perception that China’s product quality has improved, as documented by Rodrik (2006) and Schott (2008). Our results support Xu (2010), which argued that incorporating the quality aspect of the exported goods weakens or even eliminates the evidence of the sophistication of Chinese export goods in Rodrik (2006).
    Date: 2014–12
  11. By: Cutler, David M.; Huang, Wei; Lleras-Muney, Adriana
    Abstract: Using Eurobarometer data, we document large variation across European countries in education gradients in income, self-reported health, life satisfaction, obesity, smoking and drinking. While this variation has been documented previously, the reasons why the effect of education on income, health and health behaviors varies is not well understood. We build on previous literature documenting that cohorts graduating in bad times have lower wages and poorer health for many years after graduation, compared to those graduating in good times. We investigate whether more educated individuals suffer smaller income and health losses as a result of poor labor market conditions upon labor market entry. We confirm that a higher unemployment rate at graduation is associated with lower income, lower life satisfaction, greater obesity, more smoking and drinking later in life. Further, education plays a protective role for these outcomes, especially when unemployment rates are high: the losses associated with poor labor market outcomes are substantially lower for more educated individuals. Variation in unemployment rates upon graduation can potentially explain a large fraction of the variance in gradients across different countries.
    Date: 2014–12–08
  12. By: Fiorillo, Damiano; Nappo, Nunzia
    Abstract: In this paper we compare the correlation among formal and informal volunteering and self-perceived health across 14 European countries after controlling for socio-economic characteristics, housing features, neighborhood quality, size of municipality, social participation and regional dummies. We find that formal volunteering has a significantly positive association with self-perceived health in Finland and the Netherlands, but none in the other countries. By contrast, informal volunteering has a significantly positive correlation with self-perceived health in the Netherlands, France, Spain, Portugal and Greece, and a significantly negative relationship in Italy. Our conclusion is that formal and informal volunteering measure two different aspects of volunteering whose correlations with perceived health seem to depend on specific cultural and institutional characteristics of each country.
    Keywords: Self-perceived health, formal and informal volunteering, European countries
    JEL: D64 I10 P5 Z10
    Date: 2014–01–31
  13. By: Ivan ?otkovský
    Abstract: The article is deal with the spatial differences of the demographic events between European Union regions. We are research spatial diferencies of ageing process between 272 NUTS 2 regions today. The analyses on this spatial level are working with the creation of cartogram method for processing of the demographical data. We can use ArcGIS 10.2 and his version ArcMap 10.2 as a complete system for authoring, serving, and using geographic informations for better processing the spatial data by the help of cartogram method. Our principal main is to group the all 272 EU NUTS 2 regions on the basis children and elderly substitution in population and evaluation of the ageing process. Therefore we are using the basic measurement methods for examination of the age structure. The spatial typology is carried out on the basis of a series of values of the following three basic demographical indices: the children ration, the eledrely ratio, the ageing index (IA) and the dynamic ageing index (DAI). The world's current ageing index is about 30. And only in Europe is more than 100 and in European Union actually 117. This mean, that in Europe we have more elderly people than children. Only eight countries has ageing index less than 100 in European Union now. Ageing index 125 and more has six countries yet.
    JEL: C46 J11 J13 J14 R23
    Date: 2014–11
  14. By: Mirko Titze; Matthias Brachert
    Abstract: The EU Framework Programme (FP) belongs to the most important instruments promoting transnational collaborative R&D projects in Europe. Its main objective is to initiate cross-border complementarities in order to exploit knowledge resources and to conduct large scale research. Within the EU FPs the applicants are free to choose partners from all over Europe. The key question of our paper is: Which determinants affect the emergence of intra- and interregional collaborations within EU Framework Programmes? One might assume that geographical factors do not matter since trade barriers have been eliminated in the Single European Market. Though, there is a controversial debate on the importance of geographical proximity for the exchange of knowledge. Our paper relies on two theoretical concepts. First, we apply the global cluster networks conception developed by Bathelt and Li (2013). Within this concept it is argued that clustered organizations are more likely to set up collaborative R&D efforts with other similar clustered organizations to keep up with wider industry developments. Conversely, non-cluster organizations are less likely to get integrated cluster destinations. Second, we tie in with the proximity debate discussed in Boschma (2005). According to this concept geographical proximity addresses only one facet. Beyond physical distance other forms of proximity are existent such as social, cognitive, organisational and institutional proximity. It is argued that physical distance is neither a necessary nor a sufficient condition for interactive learning processes. Though, it may facilitate the other dimensions of proximity. In line with these strands of research we investigate the determinants of the number of cross-region collaborations within EU FPs. The analysis is focused on regional level (NUTS 2). Moreover, we differentiate between two technology fields, biotechnology and aerospace. In doing so, we are capable to capture technology specific characteristics. We apply a spatial interaction modelling framework that bases on a gravity type (Scherngell and Barber 2009). The empirical analysis is carried out using a negative binomial specification. We found evidence that geographical factors still matter ? but technological proximity seems to be more importantly. Moreover, we prove that the mere size in terms of employment and establishments is not necessarily required to establish cross-region collaborations. Also small actors have been chosen as partners in collaborative R&D networks across Europe.
    JEL: D85 L14 R12 R15
    Date: 2014–11
  15. By: Hatton, Timothy J.
    Abstract: It is widely believed that the current recession has soured public attitudes towards immigration. But most existing studies are cross sectional and can shed little light on the economy-wide forces that shift public opinion on immigration. In this paper I use the six rounds of the European Social Survey (2002-2012) to test the effects of economic shocks on immigration opinion for 20 countries. The recession that began in 2008 provides a useful test because its severity varied so widely across Europe. For Europe as a whole the shifts in average opinion have been remarkably mild. But trends in opinion have varied across countries, especially in the responses to a question on whether immigrants are good or bad for the economy. At the country level, pro-immigration opinion is negatively related to the share of immigrants in the population and to the share social benefits in GDP, but only weakly to unemployment. These effects differ somewhat across responses to different questions relating to immigration policy and to the desirability of immigrants. The recession also influenced other attitudes and traits that are sometimes linked to opinion on immigration.
    Keywords: Immigration attitudes; Immigration policy; Public opinion
    JEL: D72 F22 J61
    Date: 2014–06
  16. By: Krause, Annabelle; Rinne, Ulf; Zimmermann, Klaus F
    Abstract: A Single European Labor Market, particularly involving the free movement of workers within Europe, has been a goal of the European community since the 1950s. Whereas it may entail opportunities and drawbacks alike, the benefits—such as greater economic welfare for most citizens—are supposed to outweigh the losses. However, over fifty years after the aim was first established, a Single European Labor Market has not yet been achieved. This paper gives an overview of current European macroeconomic trends, with a particular focus on the Great Recession, and also explores the drivers of and obstacles to labor mobility. Complementarily, it analyses the results of a unique opinion survey among labor market experts, as well as formulates policy recommendations to enhance mobility. The development of a Single European Labor Market is also discussed in relation to the German model.
    Keywords: economic crisis; economic migration; European labor market integration; German model; worker mobility
    JEL: J40 J61 J68
    Date: 2014–08
  17. By: Dengler, Katharina (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Matthes, Britta (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Paulus, Wiebke
    Abstract: "In recent times, the concept of tasks increasingly arises in the literature. Tasks defined as occupational tasks that individuals have to perform get more and more important in analysing different research questions. The most common application is the task-based approach (Autor/Levy/Murnane 2003) that explains rising wage inequality in many industrialised countries by changing tasks. However, the distinction between analytical/interactive and manual non-routine tasks as well as cognitive and manual routine tasks also provides a basic concept for further research on tasks like a task-based analysis of occupational segmentation of the labour market or occupational mobility. In contrast to the existing task operationalisations in Germany that are based on survey data, we use - following the approach in the U.S. - expert knowledge about competencies and skills - that are usually required for performing an occupation. Based on an expert database (BERUFENET of the German Federal Employment Agency), we provide an alternative task operationalisation for Germany and calculate the main task type and the composition of tasks for different occupational classifications (German Classification of Occupations 1988 and German Classification of Occupations 2010) and for different classification levels (2-digit- and 3-digit-codes). In this paper, we describe our procedure and provide first descriptive results on the validity of our new task operationalisation." (Author's abstract, IAB-Doku) ((en))<br><br><b>Additional Information</b><ul><li><a href=' 4/'>Data</a></li></ul>
    Date: 2014–11–20
  18. By: Seelkopf, Laura; Yang, Hongyan
    Abstract: The current financial crisis has brought Europe to a critical juncture. In this paper, we map the fiscally United States of Europe. We simulate an optimal EU-wide income tax and calculate the implied cross-country transfers. The comparison of the implied transfers with the real transfers shows how insufficient the actual transfers are to reduce income disparities across the EU. Moreover, to evaluate the chances for a stronger European fiscal integration within different (core-) groups of member states, we illustrate the winners and losers from an optimal EU-wide income redistribution across the Union. While the need for centralized redistribution grows with the number of heterogeneous member states, the implementation of a European income tax becomes at the same time ever more unlikely.
    Abstract: Die Europäische Union ist durch die Finanzkrise an einen kritischen Punkt zwischen Desintegration und verstärkter Integration gelangt. In diesem Papier fokussieren wir auf Letzteres und bilden die (fiskalisch) Vereinigten Staaten von Europa ab. Dabei berechnen wir die optimale EU-Einkommenssteuer und die dadurch implizierten Transferzahlungen zwischen den Mitgliedsstaaten. Der Vergleich unserer Ergebnisse mit den real stattfindenden Transfers zeigt, dass diese viel zu niedrig sind, um die Einkommensunterschiede innerhalb der EU zu reduzieren. Um die Wahrscheinlichkeit einer fiskalischen Integration einschätzen zu können, illustrieren wir Gewinner und Verlierer einer EU-Einkommenssteuer. Wir kommen zu der Schlussfolgerung, dass eine EU-Einkommensteuer nicht implementierbar ist, egal welche Ländergruppe wir betrachten. Außerdem zeigt unsere Analyse das eigentliche Dilemma: eine EU-weite Einkommenssteuer ist schwieriger zu implementieren, je stärker die Einkommensunterschiede zwischen den Mitgliedsstaaten sind. Dies ist jedoch genau das Szenario, in dem eine fiskalische Integration besonders notwendig ist, um Lebensstandards EU-weit anzugleichen.
    Keywords: European Union,Inequality,Redistribution,Solidarity,Fiscal Policy,Optimal Taxation
    Date: 2014
  19. By: Stephan Brunow; Valentina Nafts
    Abstract: Innovation is a key driver of technological progress and growth in a knowledge-based economy. There are various motives for individual firms to innovate: improving quality secures market leadership, introducing new products leads the firm into new markets, adopting new technologies could be seen as a catch-up strategy within an industry or an improvement of the firm's own products when the technology adopted is based on ideas from other industries. Firms can perform innovation activities in one or more of these areas or in none of them. We therefore raise the question of what types of firms tend to be more innovative, i.e. which firms innovate in more of these areas. For this purpose we employ firm-level survey data and combine it with administrative data from Germany's social security system. An ordered logit model is estimated using a variety of characteristics which describe the workforce employed and other firm-related variables, the regional environment where the firm is located, as well as industry and region fixed effects.
    Keywords: firm innovation; labor diversity; ordered logit; regional economic environment
    JEL: J O R
    Date: 2014–11
  20. By: Bartels, Charlotte; Jenderny, Katharina
    Abstract: A large literature has documented top income share series based on income tax statistics using the common methodology established by Piketty (2001, 2003). The disappearance of capital income from the income tax base in many countries poses a major challenge to the comparability of these series both over time and between countries. First, we extend the existing German series including capital gains to 2010, and the series excluding capital gains to 2008. Second, we derive three homogeneous series by simulating legislative definitions of capital income prevailing in Germany between 2001 and 2010. For both simulation and the exclusion of capital gains, we employ a rich data set containing the tax files of all income taxpayers. Third, we construct a composite measure of stock dividends and interest income tax ows as a proxy for capital income missing in the data since 2009. We find that the drop in top income shares obtained from income tax statistics in the crisis year 2009 is largely attributable to the exclusion of capital income from the income tax base.
    Keywords: income inequality,income distribution,top incomes,taxation,capital,gains,Germany
    JEL: D31 H2 J3
    Date: 2014
  21. By: Sascha O. Becker; Marc-Andreas Muendler
    Abstract: This paper combines representative worker-level data that cover time-varying job-level task characteristics of an economy over a long time span with sector-level bilateral trade data for merchandize and services. We carefully create longitudinally consistent workplace characteristics from the German Qualification and Career Survey 1979-2006 and prepare trade flow statistics from varying sources. Four main facts emerge: (i) intermediate inputs constitute a major share of imports, and their relevance grows especially in the early decade; (ii) the German workforce increasingly specializes in workplace activities and job requirements that are typically considered non-offshorable, mainly within and not between sectors and occupations; (iii) the imputed activity and job requirement content of German imports grows relatively more intensive in work characteristics typically considered offshorable; and (iv) labour-market institutions at German trade partners are largely unrelated to the changing task content of German imports but German sector-level outcomes exhibit some covariation consistent with faster task offshoring in sectors exposed to lower labour-market tightness. We discuss policy implications of these findings.
    JEL: F14 F16 J23 J24
    Date: 2014–12
  22. By: Laurent Bergé
    Abstract: The question of the determinants of inter-regional knowledge flows has received a growing interest in the recent past. Particularly, the question of the relationship between geography and networks has been debated. Yet, at the inter-regional level, there is no study assessing the effect of networks on the the value of knowledge flows. This may come from the fact that methodological tools assessing network characteristics at the dyadic level are lacking for aggregated networks (such as the network of inter-regional knowledge flows). This paper aims to fill this gap and contribute to the debate on the determinants of knowledge flows. To do so we first define a new measure to assess 'network proximity' at the level of the regional dyad, based on the concept of inter-regional bridging path. Here a bridging path is a path at the micro-level between two regions via a third one. For instance, if an agent from region B has collaborated with an agent from region A and an agent from region C, then there is a bridging path between A and C via B. By using the information at the aggregated level, and assuming a 'random matching process' of the agents at the micro level, we are able to derive a closed form of the total expected number of bridging paths between two given regions. By the concept of triadic closure at the micro-level, the regional pairs having a high number of bridging paths should be more prone to collaborate. We then illustrate the measure theoretically defined by making use of co-publications data from chemistry journals for the period 2001-2005, within the five largest European countries (France, Germany, Italy, Spain, the United Kingdom). The studied network is then composed of all the regional pairs among 386 active NUTS3 regions. Using a zero-inflated negative binomial regression model along gravity equations, we then assess the effect of geographical distance, spatial contiguity and national borders. We also assess the effect of 'network proximity' by using the expected number of bridging paths as a proxy. As in previous studies, the effects of the geographical distance or the national borders are negative. But we show that the measure of 'network proximity' has a positive and significant effect. All the more, it also significantly alleviates the impeding effect of national borders on cross-countries collaborations, then suggesting that 'network proximity' is a channel favored for international collaborations.
    Keywords: network formation; gravity model; regional closure; aggregated networks; spatial proximity; network proximity; co-publication; research collaboration
    JEL: D85 O31 R12
    Date: 2014–11
  23. By: Mariasole Bannò; Diego Giuliani; Enrico Zaninotto
    Abstract: In this paper we examine the existence of destination, industry, and generic export spillovers at the regional level. The empirical analysis is conducted by examining data on export activity of 103 Italian NUTS 3 regions, the 10 industries with the highest export values in the period 2004–2008, and the 15 main countries of destination of Italy’s exports. In particular we analyse the decision of export and subsequent flow of trade and we aim to identify the source and quantify the effect of spillovers generated at the regional level by means of a selection-bias corrected panel data model. In order to control for the different territorial effects, three models are estimated. The first one uses all the observations in the period, the second one is estimated using only the regions located in the north-centre of Italy, and the last one is estimated considering the data from the south of Italy. With the inclusion of controls, results show a distinct effect of export industry, destination, and generic spillovers both on the intensive and extensive margins of trade. Spillovers at the start of export activity are stronger when specific by product while are stronger generically when analysing the export flow.
    Keywords: International trade, Export spillovers, NUTS 3 region, Selection-bias corrected panel data model
    JEL: C33 F14 R10
    Date: 2014
  24. By: Elena Bárcena-Martín (Dpto. Estadística y Econometría, University of Málaga.); Maite Blázquez (Universidad Autonoma de Madrid.); Santiago Budría (ICADE, CEEAplA and IZA.); Ana I. Moro Egido (Department of Economic Theory and Economic History, University of Granada.)
    Abstract: As recession and financial crisis spread across Europe an increasing number of people are at risk of poverty and social exclusion. Children are more exposed to the risk of poverty and social exclusion than the overall population of the EU. The current climate of economic downturn calls out for an urgent need to break the vicious circle of intergenerational transmission of poverty and social exclusion in order to improve the well-being of children in a systematic and integrated way. Using the EU-SILC 2009 module on deprivation, this paper aims to contribute to the literature on poverty and social exclusion by analysing the determinants of material deprivation among children. Special attention is given to the type of household children belong to, a characteristic that is strongly determined by adults’ behaviour. We find that the level of child deprivation varies among household types. Moreover, we confirm that even after controlling for the socio-economic characteristics of the household and parents, there still exist households with a lack of certain items that are strongly correlated to children with intense deprivation. Therefore, we can conclude that there exists an association between child deprivation and the household-deprivation profile that surpasses the socio-demographic characteristics of the household and parents.
    Keywords: Child deprivation, household deprivation, social exclusion, multilevel models
    JEL: I32 J13
    Date: 2014–11–05
  25. By: Mamatzakis, E
    Abstract: This paper provides a comprehensive analysis of the impact of business and financial specific regulations on banks in the EU-27 over the 2004-2010 periods. We employ for the first time in the banking literature a unique dataset of a wide range of regulation indices from the “Doing Business” project of the World Bank. Results for the credit regulation indices show that the strength of creditor rights is negatively related to bank performance as measured by cost efficiency, although this effect becomes less resilient during the recent crisis period (2008-2010). On the other hand, credit information sharing improves performance, a result that is further magnified during the crisis. Tax-compliance costs and entry regulation constrain bank performance. More stringent regulation of labour, in terms of minimum wage and dismissal costs, and insolvency regulation are positively associated with performance. Furthermore, regulation that protects investors from management expropriation, such as the extent of director liability, exerts a positive impact on bank performance and more so in the crisis years. Finally, we use interaction terms between the business regulation variables and institutional quality as measured by the rule of law and corruption. Results show that there are cases that institutional quality influences positively or negatively the individual effects of specific types of business regulation on bank performance.
    Keywords: regulation of business; bank performance; European Union.
    JEL: G21
    Date: 2014–11–14
  26. By: Allmendinger, Jutta; von den Driesch, Ellen
    Abstract: This discussion paper describes the extent of social inequalities both within and between the countries of the European Union. In the first three chapters we address the micro level of individual life courses: education, employment and income. The following chapters analyse the societal consequences of inequalities. Chapter 4 looks at the unequal distribution of financial resources, while chapter 5 addresses the social and political outcomes of financial inequalities. In sum, there is mounting scientific evidence that various forms of educational, employment and financial inequalities increase over time. Moreover, societal exclusion is likely to lead to forms of political exclusion that is, a depoliticisation of socially excluded groups or to various forms of political extremism. This is an alarming sign for the future of European democracies and is in glaring contradiction to the democratic political values of equality enshrined in the Treaties.
    Keywords: Europe,Social inequalities,Income,Education,Employment,Returns to Education
    JEL: D31 I24 I30 J21 J31
    Date: 2014
  27. By: Manuel Wolff; Thorsten Wiechmann
    Abstract: At the beginning of the 21st century, the shrinking cities phenomenon is widespread across Europe. The majority of Europe's cities already lose population and the rate is more than likely to increase in future. Most European countries see an increasingly ageing population and internal migration from underdeveloped to more competitive locations. Generally, the long-term development of Europe's cities will largely be conditioned by the birth rate which dramatically declined to levels far below the natural reproduction rate (second demographic transition, Lesthaeghe and van de Kaa 1986) whereas the short-term development is especially influenced by job-driven migration. Selected studies give an idea of the persistence and spatial extent of this phenomenon in Europe (e.g. Cheshire and Hay 1989; Cheshire 1995; Turok and Mykhnenko 2007). However, the state of knowledge on causes, effects, and spatial patterns of urban shrinkage is still poor. We know little about the extension and spreading of urban shrinkage; in particular we lack a cross-national comparative perspective. Every attempt to compare the evolution of cities in Europe is confronted with the heterogeneity of definitions, criteria and statistical data. In spite of the difficulties of a standardized statistical comparison on the local level and in order to narrow the existing gap this paper aims at mapping urban shrinkage in Europe by breaking down demographic processes in Europe to the local scale. Based on a definition of urban areas in Europe and a causal model which was developed and tested in the frame of the COST Action ?Cities Regrowing Smaller' the spatial distribution of growth, stagnation and decline in urban Europe in the period from 1990 to 2010 will be presented. This includes a typology of different types of shrinking cities in Europe which in addition shows the dominance of either migration or natural demographic processes. This analysis proves that shrinking cities can be found in most countries in Europe but with major regional differences with regard to size and speed of urban shrinkage. References Cheshire P. and Hay D., 1989, Urban Problems in Western Europe, London: Unwil Hyman. Cheshire P., 1995, A New Phase of Urban Development in Western Europe ? The Evidence for the 1980s, Urban Studies, Vol. 32, N°7, pp. 1045-1063. Lesthaeghe, R. and Kaa, D. van de, 1986. Twee Demografische Transities?. In: R. Lesthaeghe and D. van de Kaa eds. Bevolking: Groei en Krimp. pp. 9-24. Deventer: Van Loghum Slaterus. Turok I. and Mykhnenko V., 2007, The Trajectories of European Cities, 1960-2005, Cities, Vol. 24, N°3, pp. 165-182.
    Keywords: shrinking cities; demographic change; cross-national comparative perspective
    JEL: J11 R23
    Date: 2014–11
  28. By: Mannan, Kazi Abdul; Farhana, Khandaker Mursheda
    Abstract: This paper presents an overview of legal framework of EU governing residence permits, employment pass and access to integration, describing the most frequent migration pathways employed by Bangladeshis in Italy. It discusses their migration trajectories, socio-demographic profile, the importance of remittances to Bangladesh, and the impact that Italian migration policy has had upon this group, as well as other non-EU nationals more generally. In this paper rural household micro quantitative data have been collected from Bangladesh to explore the relationship between legal status, remittance and socioeconomic impact at the left behind household members. Using univariate and multivariate model, investigate the factors determining of remittance inflows and their socioeconomic impact at their left behind rural household members. The empirical results suggest that there is economic variation between the documented and undocumented Bangladeshi migrants in Italy. While international migration is unlikely to provide a secure route out of positive socio-economic impact at their household for many Bangladeshis within a restrictive immigration environment, as they become trapped in more vulnerable and less sustainable migration processes. It concludes with a discussion of the sociocultural integration of the Bangladeshi migrants in Italy and their future integration opportunities to other EU nations.
    Keywords: Documented migrant, undocumented migrant, integration
    JEL: D0 D00 K0 K00
    Date: 2014–09–01
  29. By: Avdic, D.;
    Abstract: Recent health care centralization trends raise the important question of the extent to which the quality of emergency medical services may offset effects from decreased access to emergency health care. This article analyzes whether residential proximity from an emergency room affects the probability of surviving an acute myocardial infarction (AMI). The critical time aspect in AMI treatment provides an ideal application forevaluating this proximity-outcome hypothesis. Previous studies have encountered empirical difficulties relating to potential endogenous health-based spatial sorting of involved agents and data limitations on out-of-hospital mortality. Using policy-induced variation in hospital distance arising from emergency room closures in the highly regulated Swedish health care sector and data on all AMI deaths in Sweden over two decades, estimation results show a clear and gradually declining probability of surviving an AMI as residential distance from an emergency room increases. The results further show that spatial sorting is likely to significantly attenuate the distance effect unless accounted for.
    Keywords: myocardial infarction; geographical access; hospital closure;, health policy; spatial sorting; self-selection; causal effect;
    JEL: I14 I18
    Date: 2014–08
  30. By: Marcus Roller; Kurt Schmidheiny
    Abstract: In fiscally centralised countries with a unique country-wide income tax schedule, it is straightforward to quantify the degree of progressivity. In fiscally decentralised countries with varying local tax schedules, however, this is not the case. In these countries, the effective tax progressivity depends on the distribution of taxpayers across local jurisdiction as well as on local income distributions. The latter might differ systematically because high income households can partly or fully avoid high tax rates by sorting into low tax locations. This paper develops an empirical approach in order to quantify the effective tax progressivity in a fiscally highly decentralised country - Switzerland - taking the relative size of jurisdictions and the actually observed income sorting into account. Exploiting data on the universe of Swiss taxpayers, we find that rich households face significantly lower tax rates and lower progressivity than in the benchmark case that does not take the income sorting into account. The results are stronger for singles than for families indicating that singles are more sensitive to tax differentials than families. Furthermore, we find suggestive evidence that due to this income sorting the Swiss income tax system is not only less progressive but even regressive for single households with very high incomes.
    Keywords: Progressive Taxation; Fiscal Decentralisation; Income Segregation;
    JEL: H71 H73 R23
    Date: 2014–11
  31. By: Silvia Magri; Raffaella Pico (Bank of Italy)
    Abstract: Half a decade of crisis has had a substantial impact on the market for credit to Italian households. From 2008 through 2012 the share of indebted households decreased by 4 percentage points, to 23 per cent; among young households it fell by 12 points. The decline involved consumer credit and occurred between 2010 and 2012. Overall, the share of households with mortgage loans did not change; however, it fell among low-income households and increased among those in the third quartile of income. The demand for loans decreased sharply except among young households. The reduction in indebtedness was due to the drastic tightening of credit supply conditions in the period. The indicators of debt sustainability, in particular the ratio of debt to income, began to worsen in 2010; for mortgage credit the decline has involved households headed by self-employed workers and those in the third income quartile. For these households, repayment arrears have increased; arrears are more frequent for mortgages granted before the crisis. The share of households with high debt service and below-median income is about the same as in 2008, and our simulations suggest that it will change only slightly in 2014-2015.
    Keywords: household indebtedness; financial crises; supply and demand; vulnerability
    JEL: D12 D91 I32
    Date: 2014–10
  32. By: Blesse, Sebastian; Baskaran, Thushyanthan
    Abstract: We study the fiscal consequences of municipal mergers by making use of a largescale merger reform in the German federal state of Brandenburg. In addition to being the first evaluation of an East-German merger reform, this study contributes to the literature by exploring the fiscal consequences of both compulsory and (semi-) voluntary municipal mergers within the same institutional setting. Using a difference-in-difference design with municipality-level panel data over 1998-2005, we find substantial and immediate reductions in total, administrative, and current expenditures after compulsory mergers. Voluntary mergers, on the other hand, have smaller and less robust effects.
    Keywords: municipal mergers,economies of scale,voluntary and compulsory mergers
    JEL: H11 H72 H77 R53
    Date: 2014
  33. By: Cheng, Xiaomei (Dept. of Business and Management Science, Norwegian School of Economics); Bjørndal, Endre (Dept. of Business and Management Science, Norwegian School of Economics); Bjørndal, Mette (Dept. of Business and Management Science, Norwegian School of Economics)
    Abstract: Our paper applies data envelopment analysis (DEA) and stochastic non-parametric envelopment of data (StoNED) to measure cost efficiency of electricity distribution companies. The data cover 123 Norwegian electricity distribution companies during 2004-2010, and the performance of these companies is compared across the two models with and without environmental variables, i.e., variables that account for local conditions that affect the companies’ costs. The results indicate that the cost efficiency estimates with the StoNED approach are much higher than with the DEA method when we do not consider environmental variables. It shows that the choice of estimation methods is important with respect to the estimated impact of environmental variables on the performance. In addition, the inclusion of the environmental variables has considerable effect on the classification of companies with respect to local returns to scale.
    Keywords: Cost efficiency; DEA; Environmental variables; Regulation; StoNED
    JEL: Q00
    Date: 2014–06–26
  34. By: Pauline Givord; Céline Grislain-Letrémy; Helene Naegele
    Abstract: This study evaluates the impact of fuel prices on new car purchases, using exhaustive individual-level data of monthly registration of new private cars in France from 2003 to 2007. Detailed information on the car holder enables us to account for heterogeneous preferences across purchasers. We identify demand parameters through the large oil price fluctuations of this period. We find that the sensitivity of short-term demand with respect to fuel prices is generally low. Using these estimates, we assess the impact of a policy equalizing diesel and gasoline taxes. Such a policy would reduce the share of diesel in new cars purchases from 69% to 66% in the short-run, without substantially changing the average fuel consumption or CO2 emission levels of new cars. Alternatively, a carbon tax would slightly decrease the CO2 emission levels of new cars in the short-run (by 0.1%) without any significant impact on the share of diesel cars purchased.
    Keywords: Fuel prices, automobiles, carbon dioxide emissions, environmental tax
    JEL: C25 D12 H23 L62 Q53
    Date: 2014
  35. By: Massimo Florio (DEAS, Universita' di Milano); Julie Pellegrin (CSIL Centre for Industrial Studies); Emanuela Sirtori (CSIL Centre for Industrial Studies)
    Abstract: This paper discusses some conditions under which the Cohesion Policy of the European Union can effectively contribute to enhance R&I in Europe and the extent to which it offers a relevant framework for devising Research & Innovation policies at regional level overcoming possible tensions and maximising potentials for synergy. To do so, the paper mainly relies on an in-depth illustrative case study of an Italian Southern region, Apulia. The paper describes the regional innovation system put in place by the Apulia Region and analyses the value added that can be attributed to such a system as far as innovation and economic development promotion are concerned; on this basis, findings from the case study are generalised in a set of lessons learned with hopefully more general relevance: these are discussed in Section 4.
    Keywords: Research intensive clusters; regional innovation systems; mechatronics
    JEL: L26 L62 R58
    Date: 2014–11–07
  36. By: Konstantin Kholodilin
    Abstract: The role of the housing market in the everyday life of society is difficult to overestimate. The housing rents and prices directly affect standard of living of virtually every person. Housing loans constitute the largest liability of households and account for a large proportion of bank lending. In Germany, the housing accounts for more than a half of wealth of private households. It is well known that speculative price bubbles on real-estate markets are likely to trigger financial crises, which can, in turn spill, over to the real economy by producing deep recessions accompanied by huge employment reductions. Since the end of 2010, after more than a decade of falling real housing prices, strong rent and especially price increases have been observed in Germany. This raised doubts and fears in German society. On the one hand, it is feared that Germany can follow the path of Spain, Ireland, and other bubble countries that ended in a severe economic crisis. On the other hand, the tenants that constitute a majority of German population are afraid of substantial rent increases that will erode their welfare. The tenants' discontent takes a form of massive protests and manifestations endangering political stability in the country. For this reason of the major issues debated in during recent elections and ongoing coalition negotiations among two leading German parties CDU/CSU and SPD is the housing policy. Therefore, it is very important to be able to predict the dynamics of home rents and prices in the nearest future. In this paper, we evaluate the forecasting ability of 115 indicators to predict the prices and rents for existing and new housing in 71 German cities with population exceeding 100,000 persons. Above all, we are interested in whether the local business confidence indicators can allow substantially improving the forecasts, given the local nature of real-estate markets. The forecast accuracy of different predictors is tested in a framework of a quasi out-of-sample forecasting. Its results are quite heterogeneous. No single indicator appears to dominate all others for all cities and market segments. However, there are several predictors that are especially useful, namely business confidence at the national level, consumer confidence, and price-to-rent ratios. Even better forecast precision can be achieved by combining individual forecasts. On average, the forecast improvements attain about 20%, measured by reduction in RMSFE, compared to autoregressive model. In separate cases, however, the magnitude of improvement is about 50%.
    JEL: C21 C23 C53
    Date: 2014–11

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