nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2016‒06‒25
25 papers chosen by
Giuseppe Marotta
Università degli Studi di Modena e Reggio Emilia

  1. Raising the mobility of third-country nationals in the EU. Effects from naturalisation and long-term resident status By Friedrich Poeschel
  2. Implementing EU renewable energy policy at the subnational level Navigating between conflicting interests By Gilles Lepesant
  3. An Analysis of the Cost of Diability Across Europe using the Standard of Living Approach By José-Ignacio Antón; Francisco-Javier Braña; Rafael Muñoz de Bustillo
  4. Locus of Control and Mothers' Return to Employment By Eva M. Berger; Luke Haywood
  5. Integration and Efficiency of European Electricity Markets: Evidence from Spot Prices By Klaus Gugler; Adhurim Haxhimusa; Mario Liebensteiner
  6. Does marginal employment promote regular employment for unemployed welfare benefit recipients in Germany? By Lietzmann, Torsten; Schmelzer, Paul; Wiemers, Jürgen
  7. Opposites Attract – Evidence of Status Exchange in Ethnic Intermarriages in Sweden By Elwert, Annika
  8. Institutions vs. "First-Nature" Geography - What Drives Economic Growth in Europe's Regions? By Ketterer, Tobias; Rodríguez-Pose, Andrés
  9. The impact of upper-secondary voucher school attendance on student achievement. Swedish evidence using external and internal evaluations By Tyrefors Hinnerich, Bjorn; Vlachos, Jonas
  10. Join to Prosper? By Andersen, Thomas Barnebeck; Barslund, Mikkel; Vanhuysse, Pieter
  11. Small, young, and exporters: New evidence on the determinants of firm growth By M. Grazzi; D. Moschella
  12. Long-run effects of career interruptions: A micro-simulation study By Hänisch, Carsten; Klos, Jonas
  13. Fighting youth unemployment in Germany, Austria and the UK By Michal Ludwikowski
  14. Modelling Higher Education Financing Reform for Ireland By Aedin Doris; Bruce Chapman
  15. Changes in fuel economy: An analysis of the Spanish car market By Anna Matas; José-Luis Raymond; Andrés Domínguez
  16. Job Creation and the Role of Dependencies By Fornaro, Paolo; Luomaranta, Henri
  17. Incorporating innovation subsidies in the CDM framework: Empirical evidence from Belgium By Dirk Czarnitzki; Julie Delanote
  18. Part-Time Farming in Italy: Does Farm Size Really Matter? By Tocco, Barbara; Davidova, Sophia; Bailey, Alastair
  19. Is corruption efficiency-enhancing? A case study of nine Central and Eastern European countries By Elisa Gamberoni; Christine Gartner; Claire Giordano; Paloma Lopez-Garcia
  20. Decreased tracking, increased earning: Evidence from the comprehensive Polish educational reform of 1999 By Luca Flóra Drucker; Daniel Horn
  21. The European Union's External Labour Migration Policy; Rationale, Objectives, Approaches and Results, 1999-2014 By Peo Hansen
  22. Co-movements between Public and Private Wages in the EU: Which Factors Play a Role? By Marzinotto, Benedicta; Turrini, Alessandro
  23. The Inequality of Farmland Size in Western Europe By Loughrey, Jason; Donnellan, Trevor; Lennon, John
  24. Notes on updating the EU-SILC UDB sample design variables 2012-2014 By Lorena Zardo Trindade; Tim Goedemé
  25. The housing market, household portfolios and the German consumer By Geiger, Felix; Muellbauer, John; Rupprecht, Manuel

  1. By: Friedrich Poeschel
    Abstract: This paper is part of the joint project between the Directorate General for Migration and Home Affairs of the European Commission and the OECD’s Directorate for Employment, Labour and Social Affairs on “Review of Labour Migration Policy in Europe”. This document has been produced with the financial assistance of the European Union. The views expressed herein can in no way be taken to reflect the official opinion of the European Union. Grant: HOME/2013/EIFX/CA/002 / 30-CE-0615920/00-38 (DI130895) A previous version of this paper (DELSA/ELSA/MI(2015)5) was presented and discussed at the OECD working party on migration in June 2015. The functioning of labour markets in the European Union can benefit if third-country nationals become more mobile between EU member states. Using micro data from the EU Labour Force Survey, this paper measures their mobility and investigates whether it is raised by naturalisation or long-term resident status. While third-country nationals are overall less mobile than EU citizens, tertiary-educated persons appear equally mobile in both groups. Raising the mobility of all third-country nationals to the level of EU citizens would add at least 25 000 mobile persons. Causal effects on mobility from long-term resident status and naturalisation are identified through a difference-in-difference approach. Results suggest that long-term resident status increases the mobility of third-country nationals by 2%-6%. To avoid selection bias in the results for naturalisation, this paper draws on a natural experiment: following the accession of Central and Eastern European countries to the EU, all their citizens indiscriminately obtained the rights of EU citizens. The evidence suggests that those who were already living in other EU countries became more mobile as a result. These findings highlight that intra-EU mobility of third-country nationals depends on their rights to reside and work in other EU countries.
    JEL: F22 J61 K37
    Date: 2016–06–10
  2. By: Gilles Lepesant
    Abstract: The European Union (EU) has set targets for gradually reducing greenhouse gas emissions through 2050. One of the instruments involved is the 2009 Renewable Energy Directive, which specifies a 20 per cent renewable energy target for the EU by 2020. This paper reviews tensions and institutional innovations that can arise at local and regional levels within the context of the implementation of this policy.Drawing on empirical evidence collected in two regions, one in a federal country (Brandenburg in Germany), one in a unitary state (Aquitaine in France), the paper describes the factors that determine community and market acceptance of renewable energies, suggesting that appropriate multi-level governance schemes are instrumental in the successful adoption and implementation of EU priorities at the local level.
    Keywords: Forests and forestry, Renewable energy sources, State governments
    Date: 2016
  3. By: José-Ignacio Antón; Francisco-Javier Braña; Rafael Muñoz de Bustillo
    Abstract: This article presents for the first time a comparative study of the cost of disability for households in 31 European countries. In order to do so, we exploit the European Union Statistics on Income and Living Conditions, its special module on housing conditions for 2007 and 2012 and employ two alternative methodologies, one based on how difficult it is for households to make ends meet and the other related to the access of households to a set of services and assets. The comparative nature of the present analysis shows these national estimates of the cost disability from a broader perspective than previous research. One important finding of this study is that there is a significant diversity in the cost of disability across European countries, with Scandinavian countries at the top of the ranking and Eastern European states at the bottom. We discuss some possible explanatory reasons for the pattern of costs across countries found in our analysis.
    Keywords: disability, cost, standard of living, income, welfare
    JEL: I10 I30
    Date: 2016–06
  4. By: Eva M. Berger; Luke Haywood
    Abstract: This paper investigates the effect of locus of control (LOC) on the length of mothers’ employment break after childbirth. Using data from the German Socio-Economic Panel Study (SOEP), duration data reveals that women with an internal LOC return to employment more quickly than women with an external LOC. We find evidence that this effect is mainly related to differential appreciation of the career costs of longer maternity leave. Given the high level of job protection enjoyed by mothers in Germany, economic consequences of differences in this non-cognitive skill can be expected to be larger in other settings.
    Keywords: Locus of Control, Non-cognitive skills, personality, maternal employment, female labor supply, survival analysis
    JEL: J22 J24
    Date: 2016
  5. By: Klaus Gugler (Department of Economics, Vienna University of Economics and Business); Adhurim Haxhimusa (Research Institute for Regulatory Economics, Vienna University of Economics and Business); Mario Liebensteiner (Department of Economics, Vienna University of Economics and Business)
    Abstract: This paper seeks to investigate the current state of market integration among European electricity day-ahead spot prices. We provide reasoning that market integration brings about benefits, such as lower average prices and increased welfare from allocative efficiency. Yet, price convergence leads to higher prices in the low-price market and to lower prices in the high-price market, which creates winners and losers and thus makes the political implementation of market integration cumbersome. In our empirical analysis, we utilize a large sample of hourly spot prices of 25 European markets for the period 01.01.2010–30.06.2015 and combine it with other relevant data such as interconnector capacities and the existence of market coupling. Firstly, empirical results from cointegration analysis indicate that market integration increased from 2010 to 2012 but then declined until 2015, most likely due to increased feed-in from intermittent renewables. Secondly, we empirically assess the speed of adjustment from price shocks and reach the conclusion that the resulting efficiency of integration is rather modest. In general, our findings suggest that integration among European electricity markets has a large potential for improvements from additional capacity investments and further promotion of market coupling.
    Keywords: Market integration, Spot Price, Convergence, Internal Market, Electricity
    JEL: F15 L81 L98 Q48
    Date: 2016–06
  6. By: Lietzmann, Torsten (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Schmelzer, Paul; Wiemers, Jürgen (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])
    Abstract: "Marginal employment (ME) is one of the largest forms of atypical employment in Germany. In this study, we analyse whether ME has a 'stepping stone' function for unemployed individuals, i.e., whether ME increases the subsequent probability of regular employment. Our study adds to the literature in the following ways. First, compared to previous studies, it analyses the 'stepping stone' function for a more recent time period, i.e., after Germany's major labour-market reforms (Hartz reforms) at the beginning of the 2000s. Second, we use a new administrative data source which includes previously unavailable information on desired labour supply and household composition. Third, we follow recent methodological developments in the evaluation literature by applying a dynamic evaluation approach that has not previously been used to analyse marginal employment. Our results for single and childless unemployment benefit-II recipients highlight the importance of the dynamic approach: We find differing treatment effects by unemployment duration. According to our results, marginal employment does increase the likelihood of regular employment within a three-year observation period only for those unemployed who take up ME several months after beginning to receive benefits. In contrast, for those starting ME within the first months of receiving benefits, there is no effect on the probability of regular employment." (Author's abstract, IAB-Doku) ((en))
    Keywords: Arbeitslosengeld II-Empfänger, Arbeitsmarktchancen, geringfügige Beschäftigung, Beschäftigungseffekte, sozialversicherungspflichtige Arbeitnehmer, Arbeitsuche, berufliche Reintegration, Leistungsbezug - Dauer, Integrierte Erwerbsbiografien, Administratives Panel SGB II
    JEL: J64 J20 J08 C14
    Date: 2016–06–13
  7. By: Elwert, Annika (Department of Economic History, Lund University)
    Abstract: This study raises the question of how marriage market relevant status characteristics are distributed among partners in exogamous relationships. The status exchange hypothesis posits that partners in racially and ethnically heterogamous relationships trade status characteristics, mainly education. We address this hypothesis focusing on intermarriages between immigrants and native men (N=606,257) and women (N=600,165) in Sweden using register data covering the entire Swedish population for the period 1990 to 2009. Results from binomial and multinomial logistic regressions show that low status in terms of age, income, and previous relationships are determinants for exogamy, and that the main marriage market relevant status that is exchanged is age, not education. This holds particularly for immigrants from certain countries of origin such as for wives from Asia and Africa and husbands from Asia, Africa and the Middle East. Swedish men and women show surprisingly large symmetry in status exchange patterns
    Keywords: Interethnic marriage; Immigration/Migrant families; Ethnicity; Western European families
    JEL: J12 J15 Z13
    Date: 2016–06–15
  8. By: Ketterer, Tobias; Rodríguez-Pose, Andrés
    Abstract: The debate on whether institutions or geography prevail in driving economic growth has been rife (e.g. Sachs 2003 vs. Rodrik et al. 2004). Most of the empirical analyses delving into this debate have focused on world countries, whose geographical and institutional conditions differ widely. Subnational analyses considering groups of countries with, in principle, more similar institutional and geographical conditions have been limited and tended to highlight that geography is more important than institutions at subnational level. This paper aims to address whether this is the case by investigating how differences in institutional and "first-nature" geographical conditions have affected economic growth in Europe's regions in the period 1995-2009. In the analysis we use a newly developed dataset including regional quality of government indicators and geographical charactersitics and employ 2-SLS and IV-GMM estimation techniques with a number of regional historical variables as instruments. Our results indicate that at a regional level in Europe institutions rule. Regional institutional conditions - and, particularly, government effectiveness and the fight against corruption - play an important role in shaping regional economic growth prospects. This does not imply, however, that geography is irrelevant. There is evidence of geographical factors affecting regional growth, although their impact is dwarfed by the overriding influence of institutions.
    Keywords: Europe; Geography; institutions; NUTS-2 regions; quality of government; Regional economic growth
    JEL: O11 O43 R11
    Date: 2016–06
  9. By: Tyrefors Hinnerich, Bjorn (Dept. of Economics, Stockholm University); Vlachos, Jonas (Dept. of Economics, Stockholm University)
    Abstract: Sweden has a school voucher system with universal coverage and full acceptance of corporate providers. Using a value added approach, we find that students at upper- secondary voucher schools on average score 0.06 standard deviations lower on externally graded standardized tests in first year core courses. The negative impact is larger among lower achieving students (but not among immigrant students), the same students who are most prone to attend voucher schools. For high achieving students, the voucher school impact is around zero. Comparing internal and external evaluations of the same standardized tests, we find that voucher schools are 0.14 standard deviations more generous than municipal schools in their internal test grading. The greater leniency in test grading is relatively uniform across different groups, but more pronounced among students at academic than vocational programs. The findings are consistent with voucher schools responding more to differences in educational preferences than municipal schools.
    Keywords: Voucher schools; student achievement; grading standards
    JEL: H40 I21 I22
    Date: 2016–06–01
  10. By: Andersen, Thomas Barnebeck (Department of Business and Economics); Barslund, Mikkel (Centre for European Policy Studies); Vanhuysse, Pieter (Department of Political Science and Public Management)
    Abstract: We ask whether EU membership has been associated with increased domestic economic growth. Using different causal identification strategies, different time periods, different country samples, and different datasets, we are unable to demonstrate the presence of a membership growth premium. This may reflect that GDP data are too noisy and/or causal identification too complicated, in which case we should remain agnostic about the EU’s growth impact. Alternatively, it may reflect that EU membership simply has no effect on prosperity.
    Keywords: EU membership; economic growth; single market
    JEL: F43 F45 O40 P20
    Date: 2016–06–08
  11. By: M. Grazzi; D. Moschella
    Abstract: This work investigates how the export status of the firm influences the patterns of growth at different age classes. We address this research question resorting to a novel set of data that links together the universe of Italian firms and detailed data on export transactions. We find that the positive relationship between export status and growth declines with firm age. Further, we also find that, even when accounting for the role of age, the negative size-growth relationship does not disappear, contrary to some recent evidence. These results, which are robust to a series of controls, suggest for a positive signaling role of the export status which is stronger for young exporters or born globals. Exploiting the product-country level dimension of the customs data we also provide, for the first time, evidence on differences in exchange rates pass through between young and experienced exporters. In particular, we find that early exporters appear to be well equipped to face exchange rates variations as their exports decrease less following a currency appreciation.
    JEL: D22 F14 L11 L21 L25
    Date: 2016–06
  12. By: Hänisch, Carsten; Klos, Jonas
    Abstract: This paper provides a micro-simulation study on the long-run effects of career interruptions in Germany, extending earlier work which generally only focuses on the first few years after an interruption. Using data of the German Socio-Economic Panel, it finds that career interruptions will, for the average individual, have lifelong effects on incomes and labor-force participation. It quantifies these effects for the average affected individual as well as on the entire society and therefore provides additional information on the total cost of career interruptions.
    Keywords: micro-simulation,career interruptions,lifetime income
    JEL: H55
    Date: 2016
  13. By: Michal Ludwikowski (Nicolaus Copernicus University)
    Abstract: The issue of the rising number of unemployed young people affects numerous developed countries. The article seeks to discuss methods of addressing the problem of youth unemployment as well as the results of strategies applied in Germany, Austria and the United Kingdom. For Austria and Germany the key issue in combating youth unemployment was the emphasis on acquiring practical experience on early stage of education. In case of the UK however, it was a scheme of financial incentives for employers.
    Keywords: unemployment; youth; labour market; Germany; Austria
    JEL: J01 J21 J29
    Date: 2016–06
  14. By: Aedin Doris (Department of Economics, Finance and Accounting, Maynooth University.); Bruce Chapman (Australian National University)
    Abstract: This paper examines the feasibility of various alternative potential student loan schemes for Ireland. Using National Employment Survey data for 2006, we model the life-cycle earnings distribution for Irish graduates. We then use these estimates to simulate the effects of alternative types of student loans, including mortgage-type (government guaranteed bank) loans and income-contingent loans of various designs, incorporating participation and migration patterns into the simulations. The results show that mortgage-type loans entail unsustainably high repayment rates for low income graduates. Through the specification of several alternative income-contingent loan schemes, it is demonstrated that this approach to higher education financing is feasible in terms of affordability for graduates and with respect to implied government subsidies. There are some important policy design issues to be addressed and we conclude with some recommendations for a future Irish scheme.
    JEL: I22 I28 H52 H81
    Date: 2016
  15. By: Anna Matas (Universitat Autònoma de Barcelona & Barcelona Institute of Economics (IEB)); José-Luis Raymond (Universitat Autònoma de Barcelona); Andrés Domínguez (Universitat de Barcelona)
    Abstract: This paper estimates the role that technological change and car characteristics have played in the rate of fuel consumption of vehicles over time. Using data from the Spanish car market from 1988 to 2013, we estimate a reduced form equation that relates fuel consumption with a set of car characteristics. The results for the sales-weighted sample of vehicles show that energy efficiency would have improved by 32% and 40% for petrol and diesel cars respectively had car characteristics been held constant at 1988 values. However, the shift to bigger and more fuel-consuming cars reduced the gains from technological progress. Additionally, using the results of the fuel equation we show that, besides a natural growth rate of 1.1%, technological progress is affected by both the international price of oil and the adoption of mandatory emission standards. Moreover, according to our estimations, a 1% growth in GDP would modify car characteristics in such a way that fuel consumption would increase by around 0.23% for petrol cars and 0.35% for diesel cars.
    Keywords: fuel efficiency, technological change, car characteristics
    JEL: L62 Q50 R4
    Date: 2016
  16. By: Fornaro, Paolo; Luomaranta, Henri
    Abstract: We contribute to the large literature on the relation between firm size and job creation by examining the effects of dependences between enterprises. Using Finnish monthly data encompassing the population of Finnish private businesses, we calculate gross job creation and destruction, together with net job creation, for different size classes and industries. Importantly, we divide firms into a dependent (i.e. owned, at least partially, by a large company) and independent category. The analysis is based on both a dataset including entry and exit and a sample considering only continuous companies, to control for the effects of firm's age. Due to the quality of the data, we are able to isolate the 'organic' growth of firms, disregarding the effects of mergers and split-offs together with other legal restructurings. We find that independent companies have shown considerably higher net job creation, even after taking age into account. However, dependent firms do not show particularly different behavior with respect to the sensitivity to aggregate conditions, compared to their independent counterparts.
    Keywords: Dependencies, Job Creation, Firm-level Data, Large datasets, Employment statistics
    JEL: E24 E32 J63 L25 L26
    Date: 2016–05–01
  17. By: Dirk Czarnitzki; Julie Delanote
    Abstract: This paper integrates innovation input and output effects of R&D subsidies into a modified Crépon–Duguet–Mairesse (CDM) model. Our results largely confirm insights of the input additionality literature, i.e. public subsidies complement private R&D investment. In addition, results point to positive output effects of both purely privately funded and subsidy–induced R&D. Furthermore, we do not find evidence of a premium or discount of subsidy–induced R&D in terms of its marginal contribution on new product sales when compared to purely privately financed R&D.
    Keywords: CDM model, R&D, subsidies, innovation policy
    Date: 2016–06
  18. By: Tocco, Barbara; Davidova, Sophia; Bailey, Alastair
    Abstract: This paper explores the phenomenon of part-time farming, which is a typical feature in the EU and particularly in Italy, often associated with pluriactivity and small-scale farming. With the aim of improving current understanding on agricultural employment decisions, this study investigates the drivers of farm holders’ on-farm labour supply and tests for labour allocation differences based on the size of the farm. Since the definition of ‘small farm’ is arbitrary, this study explores different criteria taking into account the farm type and the utilised agricultural area. A random effects ordered probit is employed on a balanced panel for the period 2003-2009, using micro-data from the Italian Agricultural Business Survey (REA). The findings indicate significant differences in labour market responses between small and large farms, highlighting the diverse farm structures, incentives and business requirements. Pluriactivity and market integration are found to be important drivers of on-farm labour supply and are fundamental for the stabilisation of incomes of small farmers. The empirical results support the policy claim that for smaller farmers rural development policies which encourage diversification activities and support commercialisation are much more important than farm subsidies.
    Keywords: Part-time farming, labour allocation, farm size, Italy, Farm Management, D13, J22, J43, Q12,
    Date: 2016–04
  19. By: Elisa Gamberoni (European Central Bank); Christine Gartner (European Central Bank); Claire Giordano (Bank of Italy); Paloma Lopez-Garcia (European Central Bank)
    Abstract: We investigate the role of corruption in the business environment in explaining the efficiency of within-sector production factor allocation across firms in nine Central and Eastern European (CEE) countries in 2003-2012. Using a conditional convergence model, we find evidence of a positive relationship between corruption growth and both labour and capital misallocation dynamics, once country framework conditions are controlled for: this link is larger the smaller the country, the lower the degree of political stability and civil liberties, and the weaker the quality of its regulations. As input misallocation is one of the determinants of productivity growth, we further show that the correlation between changes in corruption and TFP growth is indeed negative. Our results also hold when we tackle a possible omitted variable bias by instrumenting corruption with two instrumental variables (the percentage of women in Parliament and freedom of the press). In conclusion, targeted action against corruption in the CEE region would be efficiency-enhancing.
    Keywords: bribes, capital misallocation, labour misallocation, total factor productivity
    JEL: D24 D73 O47
    Date: 2016–06
  20. By: Luca Flóra Drucker (ELTE Department of Economics and Centre for Economic and Regional Studies, Hungarian Academy of Sciences); Daniel Horn (Centre for Economic and Regional Studies, Hungarian Academy of Sciences and ELTE Department of Economics)
    Abstract: The Polish educational reform in 1999 is often considered successful as the results of the Polish students, and especially that of the low-performers, on the OECD PISA tests have improved significantly since the introduction of the new system. The reform extended the previous 8-year undivided comprehensive education to 9 years, core curricula were introduced and the examination, admission and assessment systems were changed. It has been argued before that this longer comprehensive education improved the test performance of worse performing students; hence increasing average performance and decreasing inter-school variation of test scores. However, the lack of reliable impact assessment on long-run labour market effects of this reform is awaiting. In this paper, we aim to fill this gap by looking at the causal effects of the reform. By comparing the labour market outcomes of the pre- and post-reform cohorts, we find a non-negligible and positive effect. We look at employment and wages as outcomes. Using data from the EU-Statistics on Income and Living conditions, and pooling the waves between 2005 and 2013 and taking the 20-27 year-olds, we generate a quasi-panel of observations to estimate the treatment effect by difference-in-difference estimation. We find evidence that the reform was successful on the long-run: the post-reform group is more likely to be employed and they also earn higher wages. On average, the treatment group is around 2-3% more likely to be employed, which effect is driven by the lowest educated. The post-reform cohort also earns more: we find an over 3% difference in real wages, which is also more pronounced for the lowest educated.
    Keywords: education reform, Poland, detracking, labor market, difference-in-difference
    JEL: I21 I24 I26 J24
    Date: 2016–03
  21. By: Peo Hansen
    Abstract: This paper is part of the joint project between the Directorate General for Migration and Home Affairs of the European Commission and the OECD’s Directorate for Employment, Labour and Social Affairs on “Review of Labour Migration Policy in Europe”. This document has been produced with the financial assistance of the European Union. The views expressed herein can in no way be taken to reflect the official opinion of the European Union. Grant: HOME/2013/EIFX/CA/002 / 30-CE-0615920/00-38 (DI130895) A previous version of this paper (DELSA/ELSA/MI(2015)2) was presented and discussed at the OECD Working Party on Migration in June 2015. This paper presents an overview and analysis of the policy development at the EU level regarding external labour migration (ELM). It reviews the shift in ELM policy at the EU level by examining documents and debates. It looks at the treatment of ELM, setting out from the Amsterdam Treaty and then follows the development up to the present, paying close attention to the evolving rational for increasing ELM. The difference between the horizontal approach and the sectoral approach is explained. The major ELM Directives under the sectoral approach are presented and discussed in terms of how they were negotiated and how they fit into the overall ELM policy strategy. The document concludes by identifying current political challenges for expanding the EU approach beyond its present form.
    JEL: F22 K37 N44
    Date: 2016–06–10
  22. By: Marzinotto, Benedicta (University of Udine); Turrini, Alessandro (European Commission)
    Abstract: This paper assesses the relationship between government and manufacturing wages. We find that the long-run relation between the two wages is stronger when the government is a large employer. Manufacturing wages are better aligned with productivity and unemployment when public wages, to which they respond, are set through bargaining. Finally, manufacturing wages react in the same way whether public wages are increased or cut, a relation that seems to hold also under fiscal consolidation provided the public sector is a large employer.
    Keywords: government wages, wage-setting, cost competitiveness, fiscal consolidation, cointegration
    JEL: C32 E24 E62 H59
    Date: 2016–05
  23. By: Loughrey, Jason; Donnellan, Trevor; Lennon, John
    Abstract: In this paper, we seek to identify spatial clusters of farmland size inequality across Western Europe and to discuss the implications for the future of agriculture and agricultural policy reform in the region. We utilise Eurostat data to estimate the degree of inequality in farmland size at the NUTS (Nomenclature of Territorial Units for Statistics) 2 level. We utilise geographical information systems software to illustrate the spatial distribution of farm size inequality and conduct exploratory spatial data analysis techniques to identify spatial dependence between neighbouring NUTS 2 regions. The findings show that there are clusters of low inequality in the countries of Northern Europe and clusters with high inequality in much of Southern Europe. The highlands of Scotland are a notable exception to the general trend in Northern Europe. The variation in farmland size is a key determinant in the distribution of farm income. In combination with high farmland prices and sparse land rental opportunities, a highly unequal farm size distribution can militate against the progress of new-entrant farmers and small farmers wishing to expand their production and increase their farm incomes. A highly unequal farm size distribution can therefore grant an elevated importance to land inheritance as a determinant of relative economic success at the farm level.
    Keywords: Farm Size, Inequality, Western Europe, Spatial Autocorrelation, Agricultural and Food Policy, C21, D31, 013, Q12, Q15, R58,
    Date: 2016–04
  24. By: Lorena Zardo Trindade; Tim Goedemé
    Abstract: Indicators based on EU-SILC should be accompanied by appropriate standard errors, and in order to do so, it is necessary to consider the sample design. Because important sample design variables are missing in the EU-SILC User Database (UDB), the aim of this note is to explain the update of EU-SILC UDB sample design variables for 2012 (version 4), 2013 (version 3) and 2014 (version 1), based on the methodology developed by Goedemé (2010b, 2013a). Although several of the challenges for reconstructing the EU-SILC sample design variables are identical for all releases of the data, the update required minor adjustments in the computation of the new sample design variables psu1 and strata1. The effect of the use of the new sample design variables on standard errors is observed for ‘At risk of poverty’ and ‘Material deprivation’, for which SE values are found to be larger when the sample design variables are considered.
    Keywords: EU-SILC, sample design, sampling variance, Standard error
    JEL: D31 O52
    Date: 2016–06
  25. By: Geiger, Felix; Muellbauer, John; Rupprecht, Manuel
    Abstract: House price booms in Anglo-Saxon economies and their collapse were an important part of the financial accelerator via consumption, construction and the banking system. This paper examines links for Germany between household portfolios, income and consumption in a six-equation system, for 1980-2012 data, for consumption, house prices, consumer credit, housing loans, liquid assets and permanent income with latent variables representing the shifts in the availability of the two types of credit. We find evidence of well specified consumption and house price functions and that Germany differs greatly from the Anglo-Saxon economies: rising house prices do not translate into higher consumer spending. This suggests that the transmission of monetary policy via asset prices, in particular house prices, on consumption is likely to be less effective, and any financial accelerator weaker, in Germany than in the US or the UK. There is little evidence of overvaluation of German house prices by 2012. JEL Classification: E21, E27, E44, E51, E58
    Keywords: consumption, credit conditions, credit market liberalization, household debt, housing collateral, monetary transmission
    Date: 2016–05

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