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on Microeconomic European Issues |
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Issue of 2015‒04‒11
twenty-two papers chosen by Giuseppe Marotta Università degli Studi di Modena e Reggio Emilia |
| By: | Kaliskova, Klara (CERGE-EI) |
| Abstract: | This study contributes to the female labor supply responsiveness literature by measuring the effect of tax-benefit policies on female labor supply based on a broad sample of 26 European countries in 2005-2010. The tax-benefit microsimulation model EUROMOD is used to calculate a measure of work incentives at the extensive margin – the participation tax rate, which is then used as the main explanatory variable in a female employment equation. This allows me to deal with the endogeneity of income in a new way by using a simulated instrumental variable based on a fixed EU-wide sample of women. Results suggest that a 10 percentage point increase in the participation tax rate decreases the female employment probability by 2 percentage points. The effect is higher for single mothers, for women in the middle of the skills distribution, and in countries that have lower rates of female employment. |
| Keywords: | female labor supply, tax and benefit system, Europe, instrumental variable |
| JEL: | C25 H24 H31 J22 |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8949&r=eur |
| By: | Piopiunik, Marc (Ifo Institute for Economic Research); Ruhose, Jens (Ifo Institute for Economic Research) |
| Abstract: | After the collapse of the Soviet Union, more than 3 million people with German ancestors immigrated to Germany under a special law granting immediate citizenship. Exploiting the exogenous allocation of ethnic German immigrants by German authorities across regions upon arrival, we find that immigration significantly increases crime. The crime impact of immigration depends strongly on local labor market conditions, with strong impacts in regions with high unemployment. Similarly, we find substantially stronger effects in regions with high preexisting crime levels or large shares of foreigners. |
| Keywords: | immigration, crime, allocation policy |
| JEL: | F22 J15 K42 R10 |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8962&r=eur |
| By: | Andrea ALBANESE (Ghent University, SHERPPA and DEFAP Graduate School (University of Milan-Bicocca and Catholic University of the Sacred Heart)); Bart COCKX (Ghent University, SHERPPA, UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES) and CESifo, IZA) |
| Abstract: | In several OECD countries age-targeted wage subsidies have been introduced to increase the employment of older workers, but evidence on their effectiveness is scarce. This paper examines the effects of a permanent wage cost subsidy in Belgium on the employment rate, working time and hourly wage. We estimate these effects by integrating Inverse Probability Weighting in a, possibly trend-adjusted, Difference-in-Differences of endogenously sampled repeated cross sections. We find small positive short-run impacts on working time and larger ones on the employment rate, but only for employees at high risk of leaving to early retirement. The wage is not affected. |
| Keywords: | Employers’ wage subsidies, older workers, Weighted Difference-in-Differences, endogenous sampling |
| JEL: | J14 C21 J18 J3 |
| URL: | http://d.repec.org/n?u=RePEc:ctl:louvir:2015006&r=eur |
| By: | Regina T. Riphahn; Michael Zibrowius |
| Abstract: | We study the returns to apprenticeship and vocational training for three early labor market outcomes all measured at age 25 for East and West German youths: non-employment (i.e., unemployment or out of the labor force), permanent fulltime employment, and wages. We find strong positive effects of apprenticeship and vocational training. There are no significant differences for different types of vocational training, minor differences between East and West Germany and males and females, and no significant changes in the returns over time. Instrumental variable estimations confirm the regression results. The positive returns hold up even in poor labor market situations. |
| Keywords: | Youth unemployment, school-to-work transition, returns to education, vocational training, transition economics |
| JEL: | J40 J24 I29 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp743&r=eur |
| By: | Boman, Anders (Department of Economics, School of Business, Economics and Law, Göteborg University) |
| Abstract: | In this paper we study retirement decisions and more specifically, the influence of a partner’s labour market status on this decision. We use information from three waves of the Survey of Health Ageing and Retirement in Europe (SHARE), providing information on a wide range of variables, including economic, social, as well as health variables not only of the respondent but also of the partner of the respondent, if any. Most importantly, we are able analyse the transition into retirement rather than the state of being retired and also to distinguish between different degrees of labour market attachment of the partner. Initially, we find that having a partner who is retired or a homemaker increases the likelihood of retirement, whereas an unemployed partner or a partner who is not working due to permanent sickness or disability has no statistically significant effect. However, dividing the sample into men and women, we find that the effects differ substantially between these two groups. The probability of retirement among men is not influenced by their partner’s labour market status, and among women we only find a statistically significant effect of having a partner who is retired. Our findings are robust to variations in the definition of retirement and subsamples. |
| Keywords: | retirement; labour market; family; joint leisure; SHARE |
| JEL: | J14 J26 |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunwpe:0618&r=eur |
| By: | DECANCQ, Koen (University Antwerp); NEUMANN, Dirk (Université catholique de Louvain, CORE, Belgium) |
| Abstract: | We discuss and compare five measures of individual well-being, namely income, an objective composite well-being index, a measure of subjective well-being, equivalent income, and a well-being measure based on the von Neumann-Morgenstern utilities of the individuals. After examining the information requirements of these measures, we illustrate their implementation using data from the German Socio-Economic Panel (SOEP) for 2010. We find sizeable differences in the characteristics of the individuals identified as worst off according to the different well-being measures. Less than 1% of the individuals belong to the bottom decile according to all five measures. Moreover, the measures lead to considerably different well-being rankings of the individuals. These findings highlight the importance of the choice of well-being measure for policy making. |
| Keywords: | income, composite well-being index, life satisfaction, equivalent income, von Neumann-Morgenstern utility function, worst off, Germany |
| JEL: | D31 D63 I30 |
| Date: | 2014–10–31 |
| URL: | http://d.repec.org/n?u=RePEc:cor:louvco:2014050&r=eur |
| By: | William Acworth; Nils May; Karsten Neuhoff |
| Abstract: | The European Union Emission Trading Scheme (EU ETS) has been implemented to provide a common climate policy instrument across European Union countries, to contribute to a credible investment perspective for low-carbon investors and support further European integration of energy markets. Thus the EU ETS is a key element of the European Energy Union.However, given the accumulation of a large surplus in the EU ETS, there is now a consensus between the EuropeanCommission, the European Council and the European Union Parliament (ENVI vote) that a Market Stability Reserve (MSR) needs to be implemented. The Latvian Presidency announced on March 26th a mandate to start trilogue negotiations onthe implementation of an MSR. Yet there remains discrepancy on the design parameters which will determine how quickly the MSR can respond to the surplus and restore consistency, price credibility, and robustness for investors of EU ETS.If Europe misses the opportunity to secure a timely restoration of EU ETS, then individual member states are likely to implement national measures to deliver energy and climate objectives. For example Germany has started to debate a Carbon Price add on for very carbon intensive power production to secure modernization and efficient power production should the EU ETS price not recover by the end of the decade. In this Roundup, we explore five design elements of the MSR that will determine the speed at which the most prominent European energy and climate policy instrument, the EU ETS, can deliver consistency, price credibility, and robustness for investors. The discussion of these design elements in the trilogue process that begins today will show how serious EU member states are not only about Climate Policy but equally about the Energy Union as a common policy framework to enhance investment and energy security across Europe. |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwrup:59en&r=eur |
| By: | Tibor Zavadil (National Bank of Slovakia, Research Department); Teresa Messner (Institute of Economic and Cultural Geography, Leibniz Universität, Hannover) |
| Abstract: | This paper analyses the impact of household indebtedness on household net wealth, using Slovak data from the first wave of the Household Finance and Consumption Survey. We find two different effects of household indebtedness on wealth – a highly negative impact of non-mortgage debt and a neutral effect of mortgage debt. Furthermore, we find that households living in bigger municipalities and more developed regions are both wealthier and more indebted. Finally, we ascertain that household wealth is mainly determined by income, home ownership, inheritance, household composition, the characteristics of household head, and regional demographic and economic conditions. |
| Keywords: | household net wealth, mortgage and non-mortgage debt, regional analysis |
| JEL: | D14 G21 R20 |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:svk:wpaper:1032&r=eur |
| By: | Daniele Vignoli (Dipartimento di Statistica, Informatica, Applicazioni "G. Parenti", Università di Firenze); Valentina Tocchioni (Dipartimento di Statistica, Informatica, Applicazioni "G. Parenti", Università di Firenze); Silvana Salvini (Dipartimento di Statistica, Informatica, Applicazioni "G. Parenti", Università di Firenze) |
| Abstract: | The diffusion of temporary job contracts in contemporary European societies has raised concern that these jobs, even while deemed useful for combating unemployment, may also constitute a source of insecurity and precariousness for young workers. Little is known about their possible social and demographic consequences, especially as regards family formation. We focused on this knowledge-gap by examining how job precariousness affects union formation practices in Italy. We studied both genders and combined the empirical evidence from both qualitative and quantitative research. Based on the qualitative evidence, we advanced the hypothesis that cohabitation can be linked to the growing labor market uncertainty while marriage can be linked to stability. The subsequent quantitative analysis provided strong support for this hypothesis in the general population. |
| Keywords: | job precariousness, temporary contracts, family formation, cohabitation, marriage, Italy |
| JEL: | J13 |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:fir:econom:wp2015_02&r=eur |
| By: | Alessandra Colombelli; Jackie Krafft; Francesco Quatraro (University of Turin) |
| Abstract: | This paper investigates the impact of eco-innovation on firms’ growth processes, with a special focus on gazelles, i.e. firms’ showing higher growth rates than the average. In a context shaped by more and more stringent environmental regulatory frameworks, we posit that inducement mechanisms stimulate the adoption of green technologies, increasing the derived demand for technologies produced by upstream firms supplying eco-innovations. For these reason we expect the generation of green technologies to trigger sales growth. We use firm-level data drawn from the Bureau van Dijk Database, coupled with patent information obtained from the OECD Science and Technology Indicators. The results confirm that eco-innovations are likely to augment the effects of generic innovation on firms’ growth, and this is particularly true for gazelles, which actually appear to run faster than the others. |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:uto:dipeco:201516&r=eur |
| By: | Chaton, Corinne; Lacroix, Elie |
| Abstract: | The numbers of households in fuel poverty is increasing. Indeed, more and more people are struggling to heat their homes and therefore more and more people are exposed to low temperatures which can affect their health. In this paper, we use the French database of the Healthcare and Insurance survey to study the link between a subjective measure of fuel poverty (coldness) and self-reported health. We also analyze the impact of other individual and environmental special features on self-reported health. The estimation of a dichotomous Probit model allows us to infer a negative impact of fuel poverty on self-reported health. Thus, a person in fuel poverty is 2.36 percentage points more likely to report poor or fair health status than a person who is not in fuel poverty. Accordingly, it may be appropriate to implement support for the most vulnerable categories of the health impacts of fuel poverty and cold homes, eg for chronic patients who have difficulty heating their homes. |
| Keywords: | Fuel poverty; health status; |
| JEL: | I1 I32 Q4 |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:dau:papers:123456789/14815&r=eur |
| By: | Jan Hanousek (CERGE-EI, Charles University and the Czech Academy of Sciences, Prague); Evžen Kočenda; Anastasiya Shamshur |
| Abstract: | Using a stochastic frontier model and a comprehensive dataset, we study factors that affect corporate efficiency in Europe. We find that (i) larger firms are less efficient than smaller firms, (ii) greater leverage contributes to corporate efficiency, and (iii) high competition is less conductive to efficiency than moderate or low competition. In terms of ownership, we find that (iv) efficiency increases when a majority owner must deal with minority shareholders and that (v) domestic majority owners improve efficiency more than foreign majority owners when no minority shareholders are present, but (vi) the opposite is true when minority shareholders hold a substantial fraction of the firm’s equity. In the analysis, we distinguish between a pre-crisis period (2001–2008) and a post-crisis period (2009–2011), and find that our results are sensitive to the period of observation. |
| Keywords: | efficiency; ownership structure; firms; panel data; stochastic frontier; Europe |
| JEL: | C33 D24 G32 L60 L80 M21 |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:ost:wpaper:346&r=eur |
| By: | Sandro Montresor; Francesco Quatraro (University of Turin) |
| Abstract: | The paper focuses on the analysis of effects of Key Enabling Technologies (KETs) on regional Smart Specialisation Strategies (S3). Drawing on the economic geography approach to S3, we formulate some hypotheses about the impact that KETs-related knowledge can have on the construction of new regional technological advantages (RTAs). By crossing regional data on patent applications, in KETs-mapped classes of the International Patent Classification (IPC), with a number of regional economic indicators, we test these hypotheses on a panel of 26 European countries over the period 1980-2010. KETs positively affect the construction of new RTAs, pointing to a new “enabling” role for them. They also mitigate the impact of the density to related pre-existing technologies on the construction of new RTAs, pointing to the KETs capacity of making the latter less binding in pursuing S3. Overall, the net-impact of KETs is positive, pointing to a new case for plugging KETs in the S3 policy tool-box. |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:uto:dipeco:201517&r=eur |
| By: | Alexandre Gazaniol; Catherine Laffineur |
| Abstract: | This paper investigates to which extent outward foreign direct investment (FDI) affects domestic wages. We are first interested in the raw wage differential between multinational and domestic firms. Results reveal that multinational companies pay a wage premium to their employees, even within precise skill-groups (blue-collar workers, intermediate occupations and managers). The wage premium is increasing within the wage distribution. In a second step, we use spell of workers within a firm in a fixed effect model to analyze the effect of outward FDI within job-spells. Results suggest that outward FDI raises wages for managers and reduces wages for workers performing offshorable tasks. The positive effect of FDI on managers’ wages is mainly driven by the intensive margin of outward FDI, that is by large firms already established abroad. This result is observed even after controlling for endogenous workers’ mobility. |
| Keywords: | Offshoring, Tasks, Wages, Inequality |
| JEL: | J24 J31 D21 D23 |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:wsr:wpaper:y:2015:i:155&r=eur |
| By: | Alice Sanwald; Engelbert Theurl |
| Abstract: | Introduction: Out-of-pocket spending is an important source of healthcare financing even in countries with established prepaid financing of healthcare. However, out-of-pocket payments (OOPP) may have undesirable effects from an equity perspective. In this study, we analyse the distributive effects of OOPP in Austria based on cross-sectional information from the Austrian Household Budget Survey 2009/10. Methods: We combine evidence from disaggregated measures (concentration curve and Lorenz curve) and summary indices (Gini coefficient, Kakwani index, and Reynolds-Smolensky index) to demonstrate the distributive effects of total OOPP and their subcomponents. Thereby, we use different specifications of household ability to pay. We follow the Aronson-Johnson-Lampert approach and split the distributive effect into its three components: progressivity, horizontal equity, and reranking. Results: OOPP in Austria have regressive effects on income distribution. These regressive effects are especially pronounced for the OOPP category prescription fees and over-the-counter pharmaceuticals. Dis- aggregated evidence shows that the effects differ between income groups. The decomposition analysis reveals a high degree of reranking and horizontal inequity for total OOPP, and particularly, for therapeutic aids and physician services. Conclusions: The results - especially those for prescription fees and therapeutic aids - are of high relevance for the recent and on-going discussion on the reform of benefit catalogues and cost-sharing schemes in the public health insurance system in Austria. |
| Keywords: | out-of-pocket health expenditure, healthcare financing inequalities, Kakwani index, vertical equity, horizontal equity, reranking |
| JEL: | H22 H23 H51 I14 |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:inn:wpaper:2015-05&r=eur |
| By: | Nicolò Barbieri (Deptartment of Economics. University of Bologna, Italy.) |
| Abstract: | This paper aims to shed light on the drivers that encourage a shift from incumbent internal combustion engine technologies towards low-emission vehicle technologies. We emphasise the role of fuel prices, one of the main drivers of environmental innovation, and other features of the technology space (such as technological proximity), in impacting technological dynamics and fossil fuel technological lock-ins. Specifically, we investigate whether green technological efforts come at the expense of other environmental or non-environmental inventive activities. In doing so, we employ Self-Organised Maps (SOMs) to detect the main technological domains exploited by the automotive industry during the period 1982-2008, using triadic patent families as a proxy for technological efforts pursued in each technological field. On the one hand, we test whether these drivers foster the substitution of non-green patents with green ones. On the other, we analyse if they favour substitution between technological efforts related to alternative vehicles, de facto influencing low-emitting vehicle competition. Our findings suggest that higher tax-inclusive fuel prices (used as a proxy for carbon tax) are effective in redirecting patenting activities from non-green to green technological fields. In addition, we observe a similar impact when we focus on green technological fields. Although this result may involve the risk of potential lock-in into sub-optimal substituting technologies, there are insights that the competition within the environmental technological domain mainly regards technological efforts spent on greening conventional cars and developing low-emission vehicles. |
| Keywords: | Environmental technologies, Self-Organising Maps, Crowding out, Fuel prices, Patent data |
| JEL: | O32 Q55 L62 |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:srt:wpaper:0615&r=eur |
| By: | Fogelberg, Sara (Research Institute of Industrial Economics (IFN)); Lazarczyk, Ewa (Research Institute of Industrial Economics (IFN)) |
| Abstract: | Wind power generation of electricity has gained popular support because of its low environmental impact and because of its low costs relative to other renewable energy sources. However, concerns have been raised in the power sector that wind power generation will come with the price of increased damage to other power generators. Wind power generation is naturally volatile which requires other power sources to start up and shut down in accordance with weather conditions, which for instance coal or gas generators are not built to do. The previous literature has used simulations to show that the damage done and the associated costs can be substantial. We use a dataset containing all reported failures in the Scandinavian electricity market Nord Pool and data for Danish wind power generation. The analysis shows at for Denmark the short term costs associated with the volatility of wind power generation are non-significant. Effects are slightly more pronounced for Nord Pool, indicating that the other countries in Nord Pool bear some of the costs for Denmark’s high share of wind power use. |
| Keywords: | Intermittent electricity production; Cycling costs; Nord Pool; UMMs; Failures |
| JEL: | L94 Q40 |
| Date: | 2015–03–27 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:1065&r=eur |
| By: | Agustín Molina-Parra; Diego Martínez-López |
| Abstract: | This paper studies the vertical and horizontal interactions existing between federal and state governments in terms of public deficits. We estimate a fiscal reaction function for the Spanish regions over the period 1995-2010 paying special attention to the impact of federal fiscal stance on the state fiscal imbalances. Our results indicate that higher public deficits of the central government encourage bigger fiscal imbalances at state level. This vertical interaction is interpreted in the context of yardstick competition models. We also find a significant impact of fiscal decisions taken by governments at the same tier of decision on a specific state. |
| Keywords: | public de?cit, intergovernmental relations, yardstick competition. |
| JEL: | H62 H72 H77 |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:gov:wpaper:1503&r=eur |
| By: | Tammaru, Tiit (University of Tartu); Strömgren, Magnus (Umeå University); van Ham, Maarten (Delft University of Technology); Danzer, Alexander M. (University of Munich) |
| Abstract: | Contemporary cities are becoming more and more diverse in population as a result of immigration. Research also shows that within cities residential neighborhoods are becoming ethnically more diverse, but that residential segregation has remained persistently high. High levels of segregation are often seen as negative, preventing integration of immigrants in their host society and having a negative impact on people's lives. Segregation research often focuses on residential neighborhoods, but ignores the fact that a lot of interaction also takes place in other spheres of life, such as the workplace. This paper examines the role of residential segregation in workplace segregation among recently arrived immigrants. By using unique longitudinal register data from Sweden, we show that the role of residential segregation in workplace segregation differs in an important way for immigrant men and immigrant women. |
| Keywords: | immigrants, residential segregation, workplace segregation, longitudinal analysis, Sweden |
| JEL: | J15 J61 R23 |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8932&r=eur |
| By: | Olivier Marie; Ulf Zölitz |
| Abstract: | This paper investigates how legal cannabis access affects student performance. Identification comes from an exceptional policy introduced in the city of Maastricht which discriminated legal access based on individuals' nationality. We apply a difference-in-difference approach using administrative panel data on over 54,000 course grades of local students enrolled at Maastricht University before and during the partial cannabis prohibition. We find that the academic performance of students who are no longer legally permitted to buy cannabis increases substantially. Grade improvements are driven by younger students, and the effects are stronger for women and low performers. In line with how THC consumption affects cognitive functioning, we find that performance gains are larger for courses that require more numerical/mathematical skills. We investigate the underlying channels using students' course evaluations and present suggestive evidence that performance gains are driven by improved understanding of material rather than changes in students' study effort. |
| Keywords: | Cannabis, legalization, student performance |
| JEL: | I18 I20 K42 |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1340&r=eur |
| By: | Schanne, Norbert (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]) |
| Abstract: | "It is broadly accepted that two aspects regarding the modeling strategy are essential for the accuracy of forecast: a parsimonious model focusing on the important structures, and the quality of prospective information. Here, we establish a Global VAR framework, a technique that considers a variety of spatio-temporal dynamics in a multivariate setting, that allows for spatially heterogeneous slope coefficients, and that is nevertheless feasible for data without extremely long time dimension. Second, we use this framework to analyse the prospective information regarding the economy due to spatial co-development of regional labour markets in Germany. The predictive content of the spatially interdependent variables is compared with the information content of various leading indicators which describe the general economic situation, the tightness of labour markets and environmental impacts like weather. The forecasting accuracy of these indicators is investigated for German regional labour-market data in simulated forecasts at different horizons and for several periods. Germany turns out to have no economically dominant region (which reflects the polycentric structure of the country). The regions do not follow a joint stable long run trend which could be used to implement cointegration. Accounting for spatial dependence improves the forecast accuracy compared to a model without spatial linkages while using the same leading indicator. Amongst the tested leading indicators, only few produce more accurate forecasts when included in a GVAR model, than the GVAR without indicator. IAB-" (Author's abstract, IAB-Doku) ((en)) |
| Keywords: | Prognosegenauigkeit, Prognosemodell, regionale Faktoren, Indikatorenbildung |
| JEL: | C23 E24 E27 R12 |
| Date: | 2015–03–30 |
| URL: | http://d.repec.org/n?u=RePEc:iab:iabdpa:201513&r=eur |
| By: | Ghazala Azmat |
| Abstract: | Differences in the labour market experiences of men and women have fallen over the last 20 years, but there are still sizeable 'gender gaps' in employment and wages. Certain factors help to explain a good part of gender gaps, including caring for young children, occupational choice and part-time work (which suffers a pay penalty). Recent and proposed policy changes have focused on supporting family-friendly employment for both men and women, including improvements in childcare provision, improved paternity leave and greater transparency on wage gaps within firms. It is unclear, however, if these policies will be effective in helping to close the gender gaps. |
| Keywords: | gender gap, wages, employment, government policy, industrial relations, #ElectionEconomics |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepeap:027&r=eur |