nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2015‒08‒01
nineteen papers chosen by
Giuseppe Marotta
Università degli Studi di Modena e Reggio Emilia

  1. The effects of vocational education on adult skills and wages: What can we learn from PIAAC? By Giorgio Brunello; Lorenzo Rocco
  2. The impact of living and working longer on pension income in five European countries: Estonia, Finland, Hungary, the Netherlands and Poland By Elena Jarocinska; Anna Ruzik-Sierdzinska; Theo Nijman; Andres Vork; Niku Määttänen; Robert Gál
  3. Local government cooperation at work: A control function approach By Zineb Abidi; Edoardo Di Porto; Angela Parenti; Sonia Paty
  4. How can differences in German raw milk prices be explained? An empirical investigation of market power asymmetries By Zavelberg, Yvonne; Wieck, Christine; Heckelei, Thomas
  5. Market size and innovation: An application to the French seed market for large crops By Charlot, Sylvie; Dridi, Chokri; Lemarié, Stéphane
  6. Drivers, effects and peculiarities of innovation activities in the food industry: a comparison across EU Member States using CIS data By Ciliberti, Stefano; Bröring, Stefanie; Martino, Gaetano
  7. Feeling Useless: The Effect of Unemployment on Mental Health in the Great Recession By Lídia Farré; Francesco Fasani; Hannes Mueller
  8. Accounting for tax evasion profiles and tax expenditures in microsimulation modelling. The BETAMOD model for personal income taxes in Italy By Andrea Albarea; Michele Bernasconi; Cinzia Di Novi; Anna Marenzi; Dino Rizzi; Francesca Zantomio
  9. Price Transmission in Vertical Dairy Chains: The Italian Case By Weaver, R. D.; Rosa, F.; Vasciaveo, M.
  10. Financing Constraints and Fixed-term Employment Contracts: Evidence from 2008-09 Financial Crisis By Ana P. Fernandes; Priscila Ferreira
  11. Poor Little Rich Kids? The Determinants of the Intergenerational Transmission of Wealth By Sandra E. Black; Paul J. Devereux; Petter Lundborg; Kaveh Majlesi
  12. Efficiency of Wind Power Production and its Determinants By Pieralli, Simone; Ritter, Matthias; Odening, Martin
  13. Performance of different approaches in international benefit transfer: Insights from a nine country experiment By Heini Ahtiainen; Janne Artell; Mikołaj Czajkowski; Jürgen Meyerhoff
  14. Venture capital and innovation strategies By Da Rin, M.; Penas, M.F.
  15. Does everyone reject modern pig production? Identification and characterisation of societal groups in Germany By Weible, Daniela; Christoph-Schulz, Inken; Salamon, Petra
  16. Trading processing for goods:a different view from the past on Italian trade flows? By Ludovico Bracci; Silvia Fabiani; Alberto Felettigh
  17. The Effect of Income on Mortality - New Evidence for the Absence of a Causal Link By Ahammer, Alexander; Horvath, Gerard Thomas; Winter-Ebmer, Rudolf
  18. The Optimal Timing of Unemployment Benefits: Theory and Evidence from Sweden By Peter Nilsson; Johannes Spinnewijn; Camille Landais
  19. Innovation Radar: Identifying Innovations and Innovators with High Potential in ICT FP7, CIP & H2020 Projects By Giuditta De Prato; Daniel Nepelski; Giuseppe Piroli

  1. By: Giorgio Brunello; Lorenzo Rocco
    Abstract: Vocational education and training are highly valued by many. The European Ministers for Vocational Education and Training, the European Social Partners and the European Commission have issued in 2010 the Bruges Communiqué, which describes the global vision for VET in Europe 2020. In this vision, vocational skills and competencies are considered as important as academic skills and competencies. VET is expected to play an important role in achieving two Europe 2020 headline targets set in the education field: a) reduce the rate of early school leavers from education to less than 10 percent; b) increase the share of 30 to 40 years old having completed tertiary or equivalent education to at least 40 percent. However, there is limited hard evidence that VET can improve education and labour market outcomes. The few existing studies yield mixed results partly due to differences in the structure and quality of VET across countries. In this report we investigate the effects of VET on adult skills and labour market outcomes by using the PIAAC survey. Data comparability across countries, the breath of countries involved, and the almost unique presence of information on assessed skills, training, earnings and employment makes this survey especially valuable to study the different facets of VET as compared to more academic education. Our approach is to think of the possible education careers available to individuals as alternative treatments in a multivalued treatment framework. Focusing mainly but not exclusively on upper secondary, post-secondary and tertiary education, we assume that individuals are exposed to four alternative treatments: 1. vocational education at the upper secondary or post-secondary level; 2. academic education at the upper secondary or post-secondary level; 3. vocational education at the tertiary level; 4. academic education at the tertiary level. In most of this paper, comparisons between vocational and academic education are made at the same level of educational attainment, hence outcomes of treatment 1 (3) are compared to those of treatment 2 (4). Depending on the research question being investigated, other comparisons are possible and may deliver a different picture than the one presented here. Isolating the effect of VET courses is difficult in the absence of students’ ability at the time of entry. In this paper, we assume that the assignment of individuals to the treatments listed above is explained by parental education, country of birth, the number of books in the house at age 16 as well as the pupil/teacher ratio in primary school and the proportion of residents in rural areas at the age of selection. We discuss in the report how plausible this assumption is in the context of the data being used. This is important for the interpretation of our results. Only if this assumption holds we can treat our estimates of the effects of alternative treatments as causal effects. If it does not, a more modest interpretation is in order that views our findings as interesting correlations at best. In particular, if there are factors affecting selection into different curricula that we cannot control for with the data at hand, our estimates may still be affected by selection bias, which could amplify the estimate gap in labour market outcomes associated to alternative curricula. The results are encouraging in some ways while disappointing in others. Overall, at the ISCED 3 and 4 level, we find that VET performs about as well as academic education as far as earnings are concerned and a bit better in terms of employment outcomes. VET at the ISCED 3-4 level is also associated with higher training incidence. Finally, our findings support the view that the presence of vocational tracks helps keeping students with limited academic attitudes in school. On the other hand and despite the emphasis put on creating and/or expanding VET opportunities at the ISCED 5 level, we find a clear advantage of academic education at this level across all outcomes considered. Unsurprisingly, there are large cross-country differences in the estimates reported above, most likely explained by differences in the quality of VET instructions. For instance, there is evidence that the wage and employment returns to VET are higher in countries where the relative supply of VET graduates is lower. In these countries, skill performance by VET graduates is also better. However, in spite of the growing interest attracted by dual systems, which alternate school and work, we do not find systematic evidence that returns to VET are higher in the countries where vocational education systematically combines school and work. More specifically, at the ISCED 3-4 level, a vocational curriculum is associated to only slightly lower hourly earnings but a higher probability of being currently employed, and a higher share of the completed working life spent in paid employment. The estimated differences are small: for earnings, the negative gap ranges between -1.3 percent for males and -4.8 percent for females; for the probability of employment and the share of time spent in paid employment, the estimated positive gaps are 2.2 and 3.3 percentage points for males and 1.9 and 0.6 percentage points for females. On the other hand, the comparison between vocational and academic education is much more disappointing when we consider tertiary education (ISCED 5). In this case, the earnings gap between vocational and academic education at the time of the interview is as big as -19 percent for males and -21.7 percent for females. There is also a small negative gap in the probability of being currently employed. This gap should however be contrasted with the positive gap in the share of the working life spent in paid jobs, estimated at 6.9 percentage points in the case of males and at 3.7 percentage points in the case of females. Overall, the evidence we have on different ISCED levels suggests that vocational education does not perform as well as academic education when earnings are concerned, and performs slightly better than academic education when employability measures are considered. VET also performs less well than academic education on a number of other non-monetary outcomes. Independently of the ISCED level, we find that individuals with vocational education have a higher likelihood of being NEET (not employed and with no education or training in the past 12 months), report poorer health and have poorer civic behaviour than comparable individuals with academic education. There is also evidence that vocational education is associated to poorer labour market returns among older than younger cohorts. Whether these differences simply reflect cohort effects or also indicate the presence of age effects is impossible to tell with the data at hand, which are a cross section of individuals. This issue is important but must be left to better data and further research. When we consider the proficiency in foundation skills we find individuals with vocational education to be less proficient than those with academic education, for any ISCED level. This is true for both genders and, in spite of some heterogeneity, for all countries. The negative gap is larger for those with tertiary education and increases with the country-specific share of vocational students. In particular, we estimate that the negative percentage gap associated to vocational education at the secondary or post-secondary level ranges from -2.0 to -2.2 percent for literacy, from -1.9 to -2.9 percent for numeracy and from -1.8 to -2.3 for problem solving skills. In the case of tertiary education, the negative gap is larger and ranges from -5.7 to -5.9 for literacy, from -6.7 to -7 percent for numeracy and from -4.4 to -4.7 percent for problem solving skills. We also find that the relationship between initial vocational education and training and continuing vocational education and training varies with the level of education. When we consider upper secondary or post-secondary education, there is evidence that VET is associated with higher training incidence. The estimated positive gap with respect to academic education ranges from 2.4 percentage points for females to 4.0 percentage points for males. When we focus instead on tertiary education, the evidence suggests that those who have completed vocational curricula have on average a much lower investment in further training than those with an academic curriculum. In this case, the estimated negative gap is close to 10 percentage points. These results hold for both genders, even when we distinguish between on-the-job and off-the-job training. Interestingly, the negative effect of a vocational curriculum is larger in absolute value in countries with higher employment protection. Finally, we compare the labour market outcomes and the current skills of individuals who have completed upper secondary or post-secondary vocational education and individuals who have completed at most lower secondary education (ISCED 2). It is often said that the presence of vocational tracks helps keeping students with limited academic attitudes in school. Our empirical evidence shows that upper secondary VET is associated to substantially higher hourly earnings, employability and skills with respect to lower education. For males, we estimate an hourly earnings premium of 10.3 percent and an employment premium of 11.9 percentage points. VET graduates also enjoy close to 11 percent higher level of measured numeracy skills with respect to comparable individuals with at most lower secondary education. In spite of spending more time at school than the latter, the former also end up spending a higher percentage of time in paid employment.
    JEL: I21 I28 J01 J08 J24
    Date: 2015–07–29
  2. By: Elena Jarocinska; Anna Ruzik-Sierdzinska; Theo Nijman; Andres Vork; Niku Määttänen; Robert Gál
    Abstract: Life expectancies are rapidly increasing and uncertain in all countries in Europe. To keep pension systems affordable, policy reforms are to be implemented which will encourage individuals to work longer. In this paper we analyze the impact of working and living longer on pension incomes in five European countries and assess the impact of these policy reforms on the financial well-being of the elderly. The paper shows the diversity of the policy measures taken in these countries. Furthermore, we analyze the financial incentives for working longer and postponing claiming pension benefits and we assess the attractiveness of these options. Lastly, we study how increases in life expectancies and survival probabilities affect pension incomes.
    Keywords: pension benefits, life expectancy, retirement age, policy reforms
    JEL: H55 J11 J26
    Date: 2014–05
  3. By: Zineb Abidi; Edoardo Di Porto; Angela Parenti; Sonia Paty
    Abstract: We analyze voluntary coalition formation using a unique panel data for 1,056 municipalities in the French region of Brittany between 1995 and 2002. We use a control function approach to develop a binary discrete choice model with spatial interactions. We find that a municipality’s decision to cooperate over the provision local public goods depends on the decisions of its neighbours. Comparison with spatial econometrics models (SAR and Durbin) shows that the decision to cooperate is over estimated by these more traditional models. The results are in line with the recent applied spatial economics literature but are derived for a discrete choice model setting.
    Keywords: Inter-municipal Cooperation; Panel Data; Control Function.
    JEL: C3 H2 H4 H7
    Date: 2015–07–01
  4. By: Zavelberg, Yvonne; Wieck, Christine; Heckelei, Thomas
    Abstract: Addressing the increasing concentration of dairy processors in Germany, this paper investigates imperfect competition on the German raw milk market. Using a panel data set of dairy processors’ price and processing data and related market information for the years 2001-2012, the conjectural variation approach allows analyzing market power of dairy processors towards raw milk producers. The paper contributes to the literature by providing an empirical up to date analysis of imperfect competition across and regions in Germany. The estimation results indicate an oligopsonistic market structure in Germany.
    Keywords: market power, imperfect competition, conjectural variation, dairy industry, Agribusiness, Agricultural and Food Policy, Demand and Price Analysis, Industrial Organization, C10, L10, L13, L66, Q13, R10,
    Date: 2015
  5. By: Charlot, Sylvie; Dridi, Chokri; Lemarié, Stéphane
    Abstract: The aim of this paper is to analyse the impact of market size on innovation in the seed industry. The analysis is based on a panel dataset that covers 19 large crops in France during the period 1989-2012. Our econometric analysis is based on a negative binomial specification and we conduct both cross section as well as panel data analysis. We show that the French crop area always has a positive and significant effect on the number of innovations introduced each year. Market size of foreign countries may be either positive or negative revealing synergy or substitution effects. When hybrid crops are considered, the innovation is mainly determined by a positive and very significant fixed effect, crop area having no more influence. This last result can be interpreted as market size being mainly dependent on crop area for non-hybrid crop and dependent of price mark-up for hybrid crops.
    Keywords: Seed Innovation, Market Size, Crops, Count Data, France, Agribusiness, Industrial Organization, C01, L66, O31, Q16,
    Date: 2015–05
  6. By: Ciliberti, Stefano; Bröring, Stefanie; Martino, Gaetano
    Abstract: Innovation is a clear target of the Europe 2020 growth strategy. It has been widely postulated that cooperation is especially important for innovation in the food industry because it has traditionally been regarded as a “low tech” sector. This paper analyses how different forms of cooperation affect innovation activities in the EU’s food industry. In particular, the study addresses the question of how cooperation between companies and key chain agents influences innovative activity. To do so, we analysed data at the country level drawn from the Community Innovation Survey (CIS). The aggregated data allowed us to investigate national system-level processes that must be considered the outcomes of micro-level decisions and policies. A random effect linear model is formulated and estimated to analyse the panel data obtained from five CIS waves. The model indicates that cooperation with universities positively affects innovative activity and, surprisingly, that government financial support has not been an effective instrument to foster innovation by food companies.
    Keywords: Innovation, food industry, cooperation, supplier integration, Agribusiness,
    Date: 2015–05
  7. By: Lídia Farré; Francesco Fasani; Hannes Mueller
    Abstract: This article documents a strong connection between unemployment and mental disorders using data from the Spanish Health Survey. We exploit the collapse of the construction sector to identify the causal effect of job loss. Our results suggest that an increase of the unemployment rate by 10 percent due to collapse of the sector raised mental disorders in the affected population by 3 percent. We argue that the large size of this effect responds to the fact that the construction sector was at the center of the macroeconomic shock. As a result, workers exposed to the negative employment shock faced very low chances of re-entering employment. We show that this led to long unemployment spells, hopelessness and feelings of uselessness.
    Keywords: unemployment, mental health, great recession, Spain, construction, suicide
    JEL: C26 J60 I10
    Date: 2015–07
  8. By: Andrea Albarea (Department of Economics, University Of Venice Cà Foscari); Michele Bernasconi (Department of Economics, University Of Venice Cà Foscari); Cinzia Di Novi (Department of Economics, University Of Venice Cà Foscari); Anna Marenzi (Department of Economics, University Of Venice Cà Foscari); Dino Rizzi (Department of Economics, University Of Venice Cà Foscari); Francesca Zantomio (Department of Economics, University Of Venice Cà Foscari)
    Abstract: The paper presents the main characteristics of BETAMOD, a static microsimulation model that reproduces the Italian personal income tax (IRPEF), as well as local income taxes, namely the regional and municipal additional income taxes, building on a detailed reconstruction of tax legislation. With respect to the vast majority of existing tax microsimulation models, the peculiarities of BETAMOD concern two aspects: the inclusion of a detailed set of tax expenditures, and the estimation of individual-specific tax evasion rates, which account for the total individual income level, its composition in terms of income sources, and the geographical area of residence.
    Keywords: Tax-benefit microsimulation, tax evasion, tax expenditures, SILC, Italy
    JEL: C15 C63 H20 H24 H26 H31
    Date: 2015
  9. By: Weaver, R. D.; Rosa, F.; Vasciaveo, M.
    Abstract: a theoretic level, price transmission does not provide a clear signal of competitiveness as many conditions may induce stickiness and even asymmetry in the speed of adjustment to positive and negative changes. While evidence from past EU studies for the dairy sector is mixed, several studies have found evidence of asymmetry in particular countries. However, none to our knowledge have considered evidence for Italy. We examine price dynamics within the chain and test for presence of asymmetry in the transmission of price changes along the chain. Using a parametric test of asymmetry in a multivariate VECM, we find strong evidence of symmetry in co-movement. To explore whether these results are robust with respect to nonlinearity we estimate threshold VECM models and also find strong evidence to reject asymmetry except for the transmission between raw milk and wholesale butter prices. While inference with respect to competitiveness of markets cannot be inferred from evidence of asymmetry, findings of symmetry confirm that the market organization and performance is not controlling price change to be asymmetric.
    Keywords: dairy sector, CMO, time series analysis, industrial organization, market efficiency, Agribusiness,
    Date: 2015–05
  10. By: Ana P. Fernandes (University of Exeter); Priscila Ferreira (Universidade do Minho, NIMA)
    Abstract: This paper investigates the effects of financing constraints on employment decisions of firms, when it is possible to choose between permanent and fixed-term workers. We use linked employer-employee data for the universe of private sector firms in Portugal, and the 2008-09 financial crisis as a shock for identification. We find that firms in sectors that intrinsically rely more on external finance increased the share of fixed-term employment and hires after the crisis, while the effect for firms with wider access to buyer-supplier credit is relatively lower. At the worker level, workers in sectors that require significant external financing are more likely to be hired with a fixed-term contract after the crisis, while those in sectors that have wider access to supplier credit are less likely. Our results suggest that the crisis induced financially constrained firms to use the more flexible fixed-term contracts more intensively. Credit from suppliers alleviated this effect by potentially providing an alternative source of funds to credit from financial institutions.
    Keywords: Financial crisis, Credit constraints, Employment, Fixed-term Contracts
    JEL: J2 J41 G20 M51
    Date: 2015–06
  11. By: Sandra E. Black; Paul J. Devereux; Petter Lundborg; Kaveh Majlesi
    Abstract: Wealth is highly correlated between parents and their children; however, little is known about the extent to which these relationships are genetic or determined by environmental factors. We use administrative data on the net wealth of a large sample of Swedish adoptees merged with similar information for their biological and adoptive parents. Comparing the relationship between the wealth of adopted and biological parents and that of the adopted child, we find that, even prior to any inheritance, there is a substantial role for environment and a much smaller role for genetics. We also examine the role played by bequests and find that, when they are taken into account, the role of adoptive parental wealth becomes much stronger. Our findings suggest that wealth transmission is not primarily because children from wealthier families are inherently more talented or more able but that, even in relatively egalitarian Sweden, wealth begets wealth.
    JEL: G0 G11 J13 J62
    Date: 2015–07
  12. By: Pieralli, Simone; Ritter, Matthias; Odening, Martin
    Abstract: This article examines the efficiency of wind energy production. Using non-convex efficiency analysis, we quantify production losses for 19 wind turbines in four wind parks across Germany. In a second stage regression, we adapt the linear regression results of Kneip, Simar, and Wilson (2014) to explain electricity losses by means of a bias-corrected truncated regression analysis. The results show that electricity losses amount to 27% of the maximal producible electricity. Most of these losses are from changing wind conditions, while 6% are from turbine errors.
    Keywords: wind energy, efficiency, free disposal hull, bias correction, Environmental Economics and Policy, Production Economics, Productivity Analysis, Research Methods/ Statistical Methods, Resource /Energy Economics and Policy, D20, D21, Q42,
    Date: 2015
  13. By: Heini Ahtiainen (Natural Resources Institute Finland (Luke)); Janne Artell (Natural Resources Institute Finland (Luke)); Mikołaj Czajkowski (Faculty of Economic Sciences, University of Warsaw); Jürgen Meyerhoff (Technische Universität Berlin)
    Abstract: This paper investigates the performance of different approaches in international benefit transfer using data from identical and simultaneous contingent valuation surveys on marine water quality in nine European countries. The environmental good is shared by the study countries, but the countries differ substantially in their income levels and geography. We test the performance of three approaches: unit value transfer, unit value transfer with income elasticity adjustment, and function transfer. We find that at least in the case of international benefit transfers (when respondents’ mean incomes vary) unit value transfer with income elasticity adjustment performs the best, both in terms of mean absolute transfer errors and minimum tolerance levels for the equivalence of welfare measures. We argue that this approach should become a standard for quick and easy benefit transfer, and can serve as a baseline for comparisons with more complicated function transfers.
    Keywords: benefit transfer, contingent valuation, international, transfer errors, water quality
    JEL: Q51 Q53 Q56
    Date: 2015
  14. By: Da Rin, M. (Tilburg University, TILEC); Penas, M.F. (Tilburg University, TILEC)
    Abstract: Venture capital is a specialized form of financial intermediation that often provides funding for costly technological innovation. Venture capital firms need to exit portfolio companies within about five years from the investment to generate returns for institutional investors. This paper is the first to examine the association of venture capital funding with a company’s choice of innovation strategies. We employ a unique dataset of over 10,000 innovative Dutch companies, some of which received venture financing. The data include detailed information on patent applications, innovation activities, financing sources, and other company characteristics. We find that companies backed by venture capital focus on the buildup of absorptive capacity, by engaging in in-house R&D, while at the same time acquiring external knowledge. We interpret this finding as a consequence of the time horizon of venture capital firms. Our results suggest that the correlation between venture capital funding and the build-up of absorptive capacity is not only due to a selection effect. We derive implications of these findings for corporate strategy and public policy.
    Keywords: Venture Capital; Entrepreneurship; Innovation Strategy; Research & Development; Public Policy
    Date: 2015
  15. By: Weible, Daniela; Christoph-Schulz, Inken; Salamon, Petra
    Abstract: Today’s agriculture and food production has been topic in public discussions and the media in the last years. Societal perceptions and imaginations of agriculture seem to be far away from reality. There is no indication of a declining gap between consumers’ expectations and their perception of animal husbandry. However, precise information about expectations and priorities of the population are unknown. Thus, the paper concentrates on society’s views and opinions. On the example of intensive pig production, the objective of the study is to analyse societal perceptions, expectations and main points of criticism. It also aims on the identification and characterisation of societal groups with almost identical attitudes. By combining exploratory focus groups with a quantitative survey, a mixed method approach is pursued. Focus groups are carried out in September 2012 in three German cities to capture a variety of opinions and concerns among the population. On the basis of findings from focus groups a quantitative survey is carried out in spring 2013 per online survey with approximately 1500 German citizens to quantify qualitative results. The surveys’ findings confirmed many of the critical views gained in the focus groups. On the basis of four extracted attitudinal factors three groups with heterogeneous opinions are differentiated with respect to modern pig production. Besides a very engaged group which is characterised by a strong criticism in general and a strong critical perception of current production systems, also a considerable group accepting modern animal husbandry was identified. The multinomial logit regression finally allows for a characterisation of the identified societal segments by sociodemographic and regional aspects. Additionally, the question of responsibility and the acceptance of consequences of several governmental actions are included in the model. It turns out that gender and agricultural knowledge of the people are significant determinants in explaining cluster membership. Interestingly, opponents more often have a good knowledge of agriculture. These findings imply that negative attitudes cannot be traced back to a missing knowledge.
    Keywords: modern pig production, societal groups, mixed method approach, multinomial logistic regression, Agribusiness,
    Date: 2015–05
  16. By: Ludovico Bracci (Istat); Silvia Fabiani (Banca d'Italia); Alberto Felettigh (Banca d'Italia)
    Abstract: The new international standards for national accounts and balance of payments statistics (ESA 2010 and BPM6) introduced a new treatment of goods sent abroad for processing without changing ownership, now considered as an exchange of services. In this paper we explore to what extent this innovation affects the structural analysis of Italian trade flows, in particular along the geo-sectoral dimension. We also draw, for the first time, a detailed picture of exports and imports of processing services in order to shed light on how Italian firms participate, through this channel, in global value chains. Our findings largely validate the geo-sectoral interpretations based on the previous statistical standards. The data reveal that Italy is historically a net exporter of processing services, especially for high-technology products; flows are highly concentrated across destinations and sectors.
    Keywords: trade, processing services, global value chains.
    JEL: F10 F14
    Date: 2015–07
  17. By: Ahammer, Alexander; Horvath, Gerard Thomas; Winter-Ebmer, Rudolf
    Abstract: We analyze the effect of income on mortality in Austria using administrative social security data. To tackle potential endogeneity concerns arising in this context, we estimate time-invariant firm-specific wage components and use them as instruments for actual wages. While we do find quantitatively small yet statistically significant effects in our naïve least squares estimations, IV regressions reveal a robust zero-effect of income on ten-year death rates for prime-age workers, both in terms of coecient magnitude and statistical significance. These results are robust to a number of different sample specifications and both linear and non-linear estimation methods.
    Keywords: income; mortality; wage decomposition
    JEL: I10 J14 J31
    Date: 2015–07
  18. By: Peter Nilsson (Stockholm University); Johannes Spinnewijn (London School of Economics); Camille Landais (London school of economics)
    Abstract: This paper provides a general framework to analyze the optimal time profile of benefits during the unemployment spell. We derive simple sufficient-statistics formula capturing the insurance value and incentive costs of unemployment benefits at different times during unemployment. Our general approach allows to evaluate the separate arguments for increasing or decreasing profiles put forward in the theoretical literature. Using administrative data in Sweden on unemployment, income and wealth, we find that the insurance value is fairly constant over the unemployment spell. From the start of the spell savings and credit play only a limited role in smoothing the loss of earnings. We also exploit duration-dependent kinks in the replacement rate and find that the welfare-relevant unemployment elasticity is twice as high for benefits in the first twenty weeks of the spell compared to benefits given after 20 weeks. Our evidence therefore indicates that the recent change from a flat to a declining benefit profile in Sweden has decreased welfare. The local welfare gains push towards an increasing rather than decreasing benefit profile over the spell.
    Date: 2015
  19. By: Giuditta De Prato (European Commission – JRC - IPTS); Daniel Nepelski (European Commission – JRC - IPTS); Giuseppe Piroli (European Commission – DG Employment, Social Affairs & Inclusion)
    Abstract: The European Commission's Framework Programme constitutes an important share in R&D expenditures in Europe. A number of FP7 projects certainly produce cutting-edge technologies and a significant percentage of these technologies could be commercialized. However, there is a general feeling that not all these technologies and innovations with commercial potential reach the market. The question is why? The Innovation Radar (IR) is a support initiative that focuses on the identification of high-potential innovations in the ICT FP7, CIP and H2020 projects and the key organization in delivering these innovations to the market. The current report documents the details of the IR methodology and the results of its first application. The results of the pilot exercise show that ICT FP7 projects deliver a substantial number of innovations. On average, there are nearly two new or substantially improved products or services developed within each ICT FP7 project. However, further nurturing is needed to bring them to the market and exploit their commercial potential.
    Keywords: R&D, innovation, innovation assessment, FP7, H2020
    Date: 2015–07

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