nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2015‒01‒14
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 Steffen Otterbach; Alfonso Sousa-Poza
  2. Does EU regulation hinder or stimulate innovation? By Pelkmans, Jacques; Renda, Andrea
  3. Training and wages of older workers in Europe By Michele Belloni; Claudia Villosio
  4. Compulsory Schooling Laws and Formation of Beliefs: Education, Religion and Superstition By Mocan, Naci; Pogorelova, Luiza
  5. Experiences of Germany and the Netherlands in Serving Transition-Age Youth By Todd Honeycutt Lorenzo Moreno
  6. Tradable Refugee-admission Quotas: a Policy Proposal to Reform the EU Asylum Policy By Hillel Rapoport; Jesús Fernández-Huertas Moraga
  7. The Effects of Delayed Tracking: Evidence from German States By Simon Lange; Marten von Werder
  8. Does Accession to the European Union Foster Competition Policy? Country-level Evidence By Michael Böheim; Klaus S. Friesenbichler
  9. From the glass door to the glass ceiling: An analysis of the gender wage gap by age groups By Elena Dalla Chiara; Eleonora Matteazzi; Ilaria Petrarca
  10. Active labour-market policies in Germany : do regional labour markets benefit? By Wapler, Rüdiger; Werner, Daniel; Wolf, Katja
  11. Investigating the impacts of technological position and European environmental regulation on green automotive patent activity By Nicolò Barbieri
  12. The merit-order effect in the Italian Power Market: the impact of solar and wind generation on national wholesale electricity prices By Alessandra Cataldi; Stefano Clò; Pietro Zoppoli
  13. Youth Unemployment In Italy And Russia: Aggregate Trends And The Role Of Individual Determinants By Enrico Marelli; Elena S. Vakulenko
  14. Tax incentives and firm size : effects on private R&D investment in Spain By Labeaga Azcona J.; Martínez-Ros E.; Mohnen P.
  15. Fixed-Term Employment and Fertility: Evidence from German Micro Data By Wolfgang Auer; Natalia Danzer
  16. Is the German Retail Gas Market Competitive? A Spatial-temporal Analysis Using Quantile Regression By Alexander Kihm; Nolan Ritter; Colin Vance
  17. Explaining Differentials in Subsidy Levels among Hospital Ownership Types in Germany By Adam Pilny
  18. The Structure and Evolution of Intersectoral Technological Complementarity in R&D in Germany from 1990 to 2011 By Matthias Brachert; T. Brökel
  19. Should I Stay or Should I Go? Sibling Effects in Household Formation By Aparicio Fenoll, Ainhoa; Oppedisano, Veruska
  20. Entrepreneurial Activities in Europe - Finance for Inclusive Entrepreneurship By Marco Marchese

  1. By: Steffen Otterbach; Alfonso Sousa-Poza
    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
  2. By: Pelkmans, Jacques; Renda, Andrea
    Abstract: One frequently hears the question posed in the title to this report, but there is little systematic analytical literature on the issue. Fragmented evidence or anecdotes dominate debates among EU regulatory decision-makers and in European business, insofar as there is a genuine debate at all. This CEPS Special Report focuses on the multi-faceted, ambiguous and complex relationship between (EU) regulation and innovation in the economy, and discusses the innovation-enhancing potential of certain regulatory approaches as well as factors that tend to reduce incentives to innovate. It adopts an 'ecosystem' approach to both regulation and innovation, and study the interactions between the two ecosystems. This general analysis and survey are complemented by seven case studies of EU regulation enabling and disabling innovation, two horizontal and five sectoral ones. The case studies are preceded by a broader contextual analysis of trends in EU regulation over the last three decades. These trends show the significant transformation of the nature as well as improvement of the quality of EU regulation, largely in the deepened internal market, which tend to have a favourable and lasting effect on the rate of innovation in the EU (other things being equal). Among the findings include the following: Regulation can at times be a powerful stimulus to innovation. EU regulation matters at all stages of the innovation process. Different types of regulation can be identified in terms of innovation impact: general or horizontal, innovation-specific and sector-specific regulation. More prescriptive regulation tends to hamper innovative activity, whereas the more flexible EU regulation is, the better innovation can be stimulated. Lower compliance and red-tape burdens have a positive effect on innovation. The authors recommend incorporating a specific test on innovation impacts in the ex-ante impact assessment of EU legislation as well as in ex-post evaluation. There is ample potential for fostering innovation by reviewing the EU regulatory acquis.
    Date: 2014–11
  3. By: Michele Belloni (Department of Economics, University Of Venice Cà Foscari); Claudia Villosio (LABORatorio R. Revelli-Collegio Carlo Alberto)
    Abstract: The financial deficits of many social security systems caused by ageing populations and stagnating economies are forcing workers to retire later from the labour market. An extended working life combined with rapid technological progress in many sectors, is likely making older workers’ skills obtained in school obsolete. In this context, lifelong investment in training is widely recognized among the international research and policy community as a key element to increase or at least limit the decline in productivity of older workers. This paper investigates the relationship between training undertaken by European older workers and their wages, relying on the Survey of Health, Ageing and Retirement in Europe. Undertaking training activities is associated with 6.3% higher wages. This premium is sizeable and is similar to that of attaining an upper or post-secondary degree instead of a primary or lower-secondary degree. Training wage premiums are highly heterogeneous across countries: they are highest in Austria, Germany, Greece, and Italy and are about half that in France and Spain. No premium is found for Denmark, Sweden, Belgium, the Netherlands, and Switzerland. Training premiums of the first group of countries can be overestimated due to training endogeneity and sample selection bias.
    Keywords: Older workers, Training, Wages, Cognitive abilities, Sample selection bias, Attrition
    JEL: J14 J24 J31
  4. By: Mocan, Naci (Louisiana State University); Pogorelova, Luiza (Louisiana State University)
    Abstract: We exploit information on compulsory schooling reforms in 11 European countries, implemented mostly in the 1960s and 70s, to identify the impact of education on religious adherence and religious practices. Using micro data from the European Social Survey, conducted in various years between 2002 and 2013, we find consistently large negative effects of schooling on self-reported religiosity, social religious acts (attending religious services), as well as solitary religious acts (the frequency of praying). We also use data from European Values Survey to apply the same empirical design to analyze the impact of schooling on superstitious beliefs. We find that more education, due to increased mandatory years of schooling, reduces individuals' propensity to believe in the power of lucky charms and the tendency to take into account horoscopes in daily life.
    Keywords: religion, education, superstition, Europe, beliefs, praying
    JEL: I21 Z1
    Date: 2014–12
  5. By: Todd Honeycutt Lorenzo Moreno
    Abstract: This study explores transition strategies Germany and the Netherlands use to address issues faced by youth with disabilities.
    Keywords: Germany Netherlands Transition Age Youth Disability, International
    JEL: I J F Z
    Date: 2014–02–28
  6. By: Hillel Rapoport; Jesús Fernández-Huertas Moraga
    Abstract: he current EU Asylum policy is widely seen as ineffective and unfair. We propose an EU-wide market for tradable quotas on both refugees and asylum-seekers coupled with a matching mechanism linking countries' and migrants' preferences. We show that the proposed system can go a long way towards addressing the shortcomings of the existing system. We illustrate this claim using the recent problems regarding relocation faced by the European Asylum Support Office (EASO) in Malta.
    Keywords: Immigration policy, EU policy, tradable quotas, refugee resettlement, asylum seekers, international public goods.
    JEL: F22 F5 H87 I3 K33
    Date: 2014–10
  7. By: Simon Lange (Georg-August-University Göttingen); Marten von Werder (Free University of Berlin)
    Abstract: Germany's education system stands out among OECD countries for early tracking: students are tracked into different secondary school types at the age of ten in most German states. In this paper we estimate the effects on educational outcomes of a reform that delayed tracking by two years. While our findings suggest that the reform had no effect on educational outcomes on average, we find a positive effect on male students with uneducated parents and a negative effect on males with educated parents. The reform thus increased equality of opportunity among males, yet not among females. We argue that the gendered pattern is best explained by developmental differences between boys and girls at the relevant age.
    Keywords: tracking; educational institutions; intergenerational mobility
    JEL: I21 I24 I28 J62
    Date: 2014–12–19
  8. By: Michael Böheim (WIFO); Klaus S. Friesenbichler (WIFO)
    Abstract: This paper argues that the accession to the European Union improves the quality of competition policy via the implementation of pro-competitive policies, especially antitrust and competition policies, embedded in the Community Acquis. We assess this conjecture empirically for the (former) transition economies of Central and Eastern Europe, using member countries as well as developing and developed countries in Europe and Central Asia as a control group. The data used is a macro-economic panel of 48 countries covering six 3-year periods between 1995 and 2012. We find that EU accession positively affected the quality of competition policies over and above an overall trend towards more market oriented policies. The improvement in competition policy was not reversed in a single country of the sample. The findings are robust when controlling for endogeneity issues. We also document a slow-down in policy reform efforts in the aftermath of the crisis, challenging previous literature which expects a reform enhancing effect of crisis.
    Keywords: competition policy, regulation, economic transition, Community Acquis, EU accession
    Date: 2014–12–18
  9. By: Elena Dalla Chiara (University of Verona, Italy); Eleonora Matteazzi (University of Trento, Italy); Ilaria Petrarca (University of Verona, Italy)
    Abstract: Using 2009 EU-SILC data for France, Italy, the Netherlands and the United Kingdom, we decompose the gender wage gap for prime age workers. We adopt an age group approach to identify when and how the glass door and the glass ceiling effects arise and their persistency over time. The empirical results verify that the raw gender wage gap increases with age. In all considered countries, the glass ceiling effect is completely realized by the age of 30 and increases over time. French, Italian and British women have also to cope with the glass door as they enter the labor market.
    Keywords: Gender wage gap, labor force participation, wage decomposition, glass ceiling, glass door.
    JEL: C31 C49 J21 J24 J31 J71
    Date: 2014–11
  10. By: Wapler, Rüdiger (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Werner, Daniel (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Wolf, Katja (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])
    Abstract: "Active labour-market policy (ALMP) not only affects the labour-market success of participants. Due to indirect effects, they might also affect the job perspectives of non-participants. Hence, even if ALMP programmes have a positive effect for the participants, this does not mean that ALMP improves the labour-market situation as a whole. Therefore, this paper deals with the question whether ALMP improves the matching-process between job-seekers and vacancies and thus increases the total number of outflows from unemployment into employment at the regional level. To answer this question, we use data for local employment offices of the German Federal Employment Agency for the time period 2006 to 2010 and focus on job-seekers subject to unemployment insurance. As microeconometric evaluation studies show, the search effectiveness of programme participants is low during participation due to the lock-in effect, but ideally increases at the end of the programme. In contrast to previous studies on aggregate effects of ALMP, we take this into account and explicitly differentiate current and former programme participants. The result from our augmented matching function shows that the lock-in effect is also present on the regional level. However, a higher search effectiveness after completion of the programme is not outweighed by potential indirect effects on non-participants. A higher share of former programme participants among the job-seekers in a region leads to an increase of the regional matches. This findings show that the application of ALMP improves the regional matching process. However, this effect varies largely between different types of programmes. Positive effects occur for long-term vocational training and wage subsidies as well as for in-firm training measures. Further, our results show that the effect of the different programme types depends to some extent on the regional labour-market situation." (Author's abstract, IAB-Doku) ((en))
    Keywords: Arbeitsmarktpolitik - Auswirkungen, Arbeitsuche, Arbeitsuchende, Arbeitslose, matching, offene Stellen, berufliche Reintegration, Teilnehmer, arbeitsmarktpolitische Maßnahme, regionaler Arbeitsmarkt, Integrierte Erwerbsbiografien
    JEL: C23 H43 J64 J68
    Date: 2014–12–17
  11. By: Nicolò Barbieri (University of Bologna, Italy; Ingenio CSIC-UPV, Valencia, Spain.)
    Abstract: Using patent data on 355 applicants patenting to the European patent offices from 1998 to 2010 on environmental road transport technologies, we investigate under what conditions the European environmental transport policy portfolio and the intrinsic characteristics of assignees’ knowledge boost worldwide green patent production. Our findings suggest that post-tax fuel prices, environmental vehicle taxes, CO2 standards and European emission standards, introduced in the empirical model through an innovative methodology based on Self-Organising Maps (SOM) (Kohonen, 1990; 2001), positively influence the creation of environmental inventions. Most importantly, we advocate that assignees anticipate the introduction of those emission standards, filing patents before the effective implementation of regulations when legislations are announced. Furthermore, we provide evidence that in a technological space (which measures the applicants’ technological proximity), closely located organisations enhance their patent output through the exploitation of technological knowledge produced by others. This means that the greater the proximity between assignees, the higher their likelihood of taking advantage of the knowledge produced by others. Finally, we observe that dynamic changes (both in quantity and in the number of technological fields engaged) in assignees’ patent portfolios spur inventive performances.
    Keywords: Environmental patents, environmental policies, Self-Organising Maps, road transport technologies, European emission standards, fuel prices
    JEL: O31 O38 Q55 L62
    Date: 2014–12
  12. By: Alessandra Cataldi; Stefano Clò; Pietro Zoppoli
    Abstract: Italy promoted one of the most generous renewable support schemes worldwide which resulted in a high increase of solar power generation. We analyze the Italian day-ahead wholesale electricity market, finding empirical evidence of the merit-order effect. Over the period 2005-2013 an increase of 1 GWh in the hourly average of daily production from solar and wind sources has, on average, reduced wholesale electricity prices by respectively 2.3 €/MWh and 4.2 €/MWh and has amplified their volatility. The impact on prices has decreased over time in correspondence with the increase in solar and wind electricity production. We estimate that, over the period 2009-2013, solar production has generated higher monetary savings than wind production, mainly because the former is more prominent than the latter. However, in the solar case, monetary savings are not sufficient to compensate the cost of the related supporting schemes which are entirely internalized within end-user tariffs, causing a reduction of the consumer surplus, while the opposite occurs in the case of wind.
    Keywords: Renewables, electricity price, merit-order effect, feed-in tariff, Italian wholesale power market
    JEL: Q41 Q42 Q48
    Date: 2014–12
  13. By: Enrico Marelli; Elena S. Vakulenko (National Research University Higher School of Economics)
    Abstract: Youth unemployment is a serious problem in many European countries. In the first part of the paper, we consider the aggregate trends in some EU countries and in Russia; we especially investigate the recent period after the global crisis and the Great Recession. We then consider the different types of determinants, including macroeconomic conditions, structural determinants, labour market institutions and regulations. However, the focus of our analysis is on the role played by individual and family determinants such as age, gender, education level, marital status, health, household income, housing conditions. The econometric part of the paper makes use of Eurostat micro-level data EU-SILC for Italy and RLMS-HSE data set for Russia. We use a Heckman probit model to estimate the unemployment risk of young people during the period 2004-2011. Our main research question is to explain the probability of being unemployed for young people in terms of their personal characteristics and compare these outcomes with results for the same model for adults. We take also into account some macro variables, such as living in urban areas or the regional unemployment rate. The results are of interest, since the two countries have quite different labour market institutions, besides having different levels of youth unemployment. However, most of the explanatory variables act in the same direction in both countries and it is interesting to compare the relative size of such effects, which we measure through the average partial effects.
    Keywords: youth unemployment, individual determinants of unemployment, regional unemployment, Heckman probit.
    JEL: J64
    Date: 2014
  14. By: Labeaga Azcona J.; Martínez-Ros E.; Mohnen P. (UNU-MERIT)
    Abstract: The use of fiscal policy instruments to stimulate private RD is widespread and important in some countries like Spain. In this paper we explore the effectiveness of RD tax incentives on knowledge capital accumulation in Spanish manufacturing firms using an unbalanced panel and compare the estimates based on claimed and claimable tax reductions. We find that while large firms use the programme more than small ones, the impact of the programme measured by the price elasticity is smaller for large firms than for SMEs. The price elasticities are higher when the ex-ante claimable tax reductions rather than the ex-post actually claimed tax eductions are used to compute the user cost of RD.
    Keywords: Business Taxes and Subsidies including sales and value-added (VAT); Fiscal Policies and Behavior of Economic Agents: Firm; Management of Technological Innovation and R&D;
    JEL: H25 H32 O32
    Date: 2014
  15. By: Wolfgang Auer; Natalia Danzer
    Abstract: We study the short- to medium-run effects of starting a career on a fixed-term contract on subsequent fertility outcomes. We focus on the career start since we expect that temporary contracts and their inherent economic uncertainty imply a path dependency which might have spill-over effects on other domains of life. Our empirical analysis is based on rich data from the German Socio-Economic Panel which provides comprehensive information about individuals’ labour market history as well as fertility behaviour. Our main results are: Women (i) tend to postpone their first birth due to fixed-term employment at labour market entry and (ii) reduce the number of children in the first 10 years after graduation. These associations are strongest in the subsample of native women with at least vocational training. (iii) In contrast, we find no significant correlations for men. We argue that these findings are robust to potential endogeneity threats.
    Keywords: Career start, fixed-term employment, postponement of maternity, fertility, economic uncertainty
    JEL: J13 J18 J41
    Date: 2014
  16. By: Alexander Kihm; Nolan Ritter; Colin Vance
    Abstract: We explore whether non-competitive pricing prevails in Germany’s retail gasoline market by examining the influence of the crude oil price on the retail gasoline price, focusing specifically on how this influence varies according to the brand and to the degree of competition in the vicinity of the station. Our analysis identifies several factors other than cost – including the absence of nearby competitors and regional market concentration – that play a significant role in mediating the influence of the oil price on the retail gas price, suggesting price setting power among stations.
    Keywords: Panel data; quantile regression; spatial competition; gasoline market
    JEL: C33 Q41 R41
    Date: 2014–12
  17. By: Adam Pilny
    Abstract: German hospitals receive subsidies for investment costs by federal states. Theoretically, these subsidies have to cover the whole investment volume, but in fact only 50%-60% are covered. Balance sheet data show that public hospitals exhibit higher levels of subsidies compared to for-profit hospitals. In this study, I examine the sources of this disparity by decomposing the differential in a so-called facilitation ratio, i.e. the ratio of subsidies to tangible fixed assets, revealing to which extent assets are funded by subsidies. The question of interest is, whether the differential can be attributed to observable hospital-specific and federal state-specific characteristics or unobservable factors.
    Keywords: Hospitals; subsidies; ownership; Blinder-Oaxaca decomposition
    JEL: H25 I11 L33
    Date: 2014–11
  18. By: Matthias Brachert; T. Brökel
    Abstract: Technological complementarity is argued to be a crucial element for effective Research and Development (R&D) collaboration. The real structure is, however, still largely unknown. Based on the argument that organizations’ knowledge resources must fit for enabling collective learning and innovation, we use the co-occurrence of firms in collaborative R&D projects in Germany to assess inter-sectoral technological complementarity between 129 sectors. The results are mapped as complementarity space for the Germany economy. The space and its dynamics from 1990 to 2011 are analyzed by means of social network analysis. The results illustrate sectors being complements both from a dyadic and portfolio/ network perspective. This latter is important, as complementarities may only become fully effective when integrated in a complete set of different knowledge resources from multiple sectors. The dynamic perspective moreover reveals the shifting demand for knowledge resources among sectors at different time periods.
    Keywords: collaborative R&D projects, resource complementarity, co-occurrence analysis
    JEL: L14 O31
    Date: 2014–12
  19. By: Aparicio Fenoll, Ainhoa (Collegio Carlo Alberto); Oppedisano, Veruska (London Metropolitan University)
    Abstract: In Southern Europe youngsters leave the parental home significantly later than in Northern Europe and United States. Policies have been implemented in Southern Europe to incentivize young adults to leave parental home earlier. Do peer effects among siblings amplify the effects of these policies? Estimating peer effects is challenging because of problems of reflection, endogenous group formation, and correlated unobservables. We overcome these issues in the context of a Spanish rental subsidy, exploiting the subsidy eligibility age threshold to analyse peer effects among siblings. Instrumental variable estimates show that peer effects among siblings are negative, and that the effect is explained by the presence of old or ill parents. Findings indicate that policy makers should target the household rather the individual, and combine policies for young adults together with policies for elderly.
    Keywords: peer effects, conditional cash transfer, youth emancipation, living arrangements
    JEL: J1 H2 I3
    Date: 2014–12
  20. By: Marco Marchese
    Abstract: More than one-third of the European Union’s adult population would rather be self-employed than an employee if given the chance to choose, according to the 2012 Flash Eurobarometer survey. At the same time, there is a large entrepreneurial potential in social groups that are either disadvantaged in the labour market (e.g. youth, migrants, and the low-skilled) or underrepresented in the entrepreneurial population (e.g. women and seniors). Inclusive entrepreneurship policies aim to give the opportunity for people from these groups to start-up in business and self-employment both for economic reasons and to support the goal of social inclusion.
    Date: 2014–04

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