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on Microeconomic European Issues |
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Issue of 2016‒09‒04
sixteen papers chosen by Giuseppe Marotta Università degli Studi di Modena e Reggio Emilia |
| By: | Lajos Barath (ETH Zürich, Agricultural Economics Group); Imre Ferto (Institute of Economics - Centre for Economic and Regional Studies, Hungarian Academy of Sciences) |
| Abstract: | In the paper we investigate relative productivity levels and decompose productivity change for European agriculture between 2004 and 2013. More specifically (1) we contribute to the debate whether agricultural Total Factor Productivity (TFP) has declined or not in the European Union (EU); (2) we compare the relative TFP level across EU member states and investigate the difference between ‘old’ member states (OMS, i.e. the EU-15) and ‘new’ member states (NMS) and (3) we test whether TFP is converging or not among member states. The empirical analysis applies the aggregate quantity framework developed in O’Donnell (2008), using country level panel data from the Economic Accounts for Agriculture for 23 EU member states. The results imply that TFP has slightly decreased in the EU over the analysed period; however there are significant differences in this respect between the OMS and NMS and across member states. Finally, our estimations support the productivity convergence hypothesis across the member sates. |
| Keywords: | Total Factor Productivity (TFP) level, Agricultural productivity in the EU; Färe-Primont TFP index; TFP components; technical efficiency, scale efficiency, mix efficiency |
| JEL: | Q12 |
| Date: | 2016–08 |
| URL: | http://d.repec.org/n?u=RePEc:has:discpr:1626&r=eur |
| By: | Maniquet, François (CORE, Université catholique de Louvain); Neumann, Dirk (Université catholique de Louvain) |
| Abstract: | In a model in which agents differ in wages and preferences over labor time-consumption bundles, we study labor income tax schemes that alleviate poverty. To avoid conflict with individual well-being, we require redistribution to take place between agents on both sides of the poverty line provided they have the same labor time. This requirement is combined with efficiency and robustness properties. Maximizing the resulting social preferences under incentive compatibility constraints yields the following evaluation criterion: tax schemes should minimize the labor time required to reach the poverty line. We apply this criterion to European countries and the US. |
| Keywords: | well-being, poverty, labor income taxation |
| JEL: | D63 H21 I32 |
| Date: | 2016–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10181&r=eur |
| By: | Vigren, Andreas (VTI) |
| Abstract: | The Swedish market for passenger railway services has been open to competition since the year 2010. Although minor entries have been made since this date, the incumbent SJ only faced substantial competition when MTR Express entered the Stockholm-Gothenburg line in March 2015. Using unique Sweden ticket price data from operators' websites, this paper investigates what effects this entry has had on market prices. The results show that the incumbent's prices decreased by 12.8 percent on average between March 2015 and June 2016. The price level of the competitor is well below the average price that was offered on the railway market in the pre-entry period. Further, the largest price reduction, in percentage terms, was found on tickets booked 10 days before the departure date. Finally, the decrease in the average price of the incumbent seems to be an ongoing process, and a further drop in price would not be unexpected. |
| Keywords: | Railway; Entry; Open access; Competition; Prices; Web crawler |
| JEL: | C10 L19 L92 R40 |
| Date: | 2016–08–29 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ctswps:2016_018&r=eur |
| By: | Caliendo, Marco (University of Potsdam); Künn, Steffen (Maastricht University); Uhlendorff, Arne (CREST) |
| Abstract: | In some countries including Germany unemployed workers can increase their income by working a few hours per week. The intention is to keep unemployed job seekers attached to the labour market and to increase their job-finding probabilities. To analyze the unemployment dynamics of job seekers with and without marginal employment, we consider an inflow sample into unemployment and estimate multivariate duration models. While we do not find any significant impact on the job finding probability in a model with homogeneous effects, models allowing for time-varying coefficients indicate a decreased job finding probability of marginal employment at the beginning of the unemployment spell and an increased job finding probability for the long-term unemployed. Our results suggest that job seekers with marginal employment find more stable post-unemployment jobs, and we find some evidence that the relationship between marginal employment and wages and employment stability varies with respect to skill levels, sector and labor market tightness. |
| Keywords: | marginal employment, mini-job, unemployment duration, job search, employment stability, multivariate duration models |
| JEL: | J64 C41 C33 |
| Date: | 2016–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10177&r=eur |
| By: | Porcelli, F.; Trezzi, R. |
| Abstract: | Although earthquakes are large idiosyncratic shocks for affected regions, little is known of their impact on economic activity. Seismic events are rare, the data is crude (the Richter scale measures the magnitude but says nothing of the associated damages) and counterfactuals are often entirely absent. We suggest an innovative identification strategy to address these issues based on the so-called ’Mercalli scale’ ranks - a geophysical methodology devised to gauge seismic damages relying on a newly compiled dataset following 95 Italian provinces from 1986 to 2011 (including 22 seismic episodes) offering an ideal ground for identification. Also, we carry out counterfactuals taking advantage of ex ante identical neighboring provinces that only differ ex post in terms of damages. Contrary to conventional views, we find that the impact of seismic events on output is negligible (or even positive) including after the most devastating events. |
| Keywords: | Natural disasters, Mercalli scale |
| JEL: | Q54 E00 J01 |
| Date: | 2016–08–24 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:1650&r=eur |
| By: | Marco Cucculelli (Università Politecnica delle Marche); Valentina Peruzzi (Università Politecnica delle Marche); Alberto Zazzaro (Università di Napoli Federico II) |
| Abstract: | In this paper we empirically investigate the effects of active family involvement in the company’s management on bank-firm lending relationships and access to credit. Based on the trade-off between relational and management human capital, we explore whether the relational capital embodied in the family leadership of the company influences the lending relationships with the main bank in terms of information sensitivity and duration. Then, we test whether family firms with family CEOs are more likely to experience a credit restriction from banks than family firms appointing professional CEOs external to the family. Results indicate that family businesses appointing family managers are significantly more likely to maintain soft-information-based and longer-lasting lending relationships. However, having family executives does not have a negative impact on firm’s access to credit, while the creation of soft-information-based and long-lasting lending relationships significantly reduces the likelihood of experiencing credit restrictions. In view of these findings, family relational capital seems to have a univocal beneficial impact on bank-firm relationship in our sample. |
| Keywords: | Family firm, family CEO, soft-information, relational capital, relationship lending, credit rationing. |
| JEL: | D22 G21 G22 |
| Date: | 2016–08 |
| URL: | http://d.repec.org/n?u=RePEc:lsa:wpaper:wpc12&r=eur |
| By: | West, Jens (KTH); Börjesson, Maria (KTH) |
| Abstract: | This paper performs an ex-post cost- benefit and equity analysis of the Gothenburg congestion charges introduced in 2013. We base the analysis on observed effects transport model that is able to predict the effect of the charges on travel times and traffic volumes with high accuracy. We find that the net social benefit of the charge is positive. However, we also show that the system is regressive. Low income citizens pay a larger share of their income for three reasons. First, all income classes are highly car dependent in Gothenburg, due to the relatively low public transport share. Second, workers in the highest income class have considerably higher access to company cars, and are therefore either exempt from paying the charge, or can deduce the charge from their income tax. Third, high income individuals have higher values of time. Moreover, the revenue is spent mainly on a rail tunnel, which primarily benefits commuters residing far out in the region. |
| Keywords: | Congestion charges; Cost-benefit analysis; Welfare analysis; Equity; Transport policy; Decision support |
| JEL: | R41 R42 R48 |
| Date: | 2016–08–29 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ctswps:2016_017&r=eur |
| By: | Adams, R.; Jamasb, J. |
| Abstract: | In recent years, geopolitical events have raised questions about the security of European energy supplies and which electricity generation technologies present an optimal fuel mix. Likewise, private investors need to allocate their capital efficiently by devising portfolios of generation assets. This paper applies the Modern Portfolio Theory to determine an optimal portfolio with four electricity generation technologies. Using UK electricity and fuel price data and European carbon allowance prices for the period 2009-2013, we find that coal assets increase portfolio risk and decrease overall returns, whilst a combination of gas, nuclear and wind assets allows an investor to maximise risk-adjusted return. In addition, we examine the role of power purchase agreements (PPAs) to assess whether predictable revenues create more appealing portfolio characteristics. We find that such contracts reduce portfolio returns, highlighting the importance of the set prices and their possible fluctuations over time. The findings support electricity market reform that discourages coal investment and supports investment in renewable technologies. The results also suggest that PPAs could make sense for independent renewable generators, although this would require modelling of the uncertainty of variable load factors and operating costs. |
| Keywords: | Electricity, portfolio theory, technology, risk |
| JEL: | Q40 Q42 Q49 |
| Date: | 2016–08–24 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:1646&r=eur |
| By: | Mathieu Lefebvre; Sergio Perelman |
| Abstract: | It has been long suggested that public pension wealth may crowd out household savings. However, there remains controversy about the extent of this displacement effect. In this paper we use an original microsimulation model based on retrospective survey data collected through the third wave of the Survey of Health, Ageing and Retirement in Europe (SHARE) to estimate the displacement effect of public pension wealth on other wealth in Belgium. Combining this rich dataset with an accurate estimation of the individual pension entitlements allows us to circumvent some of the main measurement errors problems faced by previous studies. We estimate that an extra euro of public pension wealth is associated with about 14-25 cent decline in non-pension wealth. |
| Keywords: | Social security, saving, microsimulation, crowding-out effect. |
| JEL: | D91 H55 E21 J14 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:ulp:sbbeta:2016-38&r=eur |
| By: | Bick, Alexander (Arizona State University); Brüggemann, Bettina (McMaster University); Fuchs-Schündeln, Nicola (Goethe University Frankfurt) |
| Abstract: | We use national labor force surveys from 1983 through 2011 to construct hours worked per person on the aggregate level and for different demographic groups for 18 European countries and the US. We find that Europeans work 19% fewer hours than US citizens. Differences in weeks worked and in the educational composition each account for one third to one half of this gap. Lower hours per person than in the US are in addition driven by lower weekly hours worked in Scandinavia and Western Europe, but by lower employment rates in Eastern and Southern Europe. |
| Keywords: | labor supply, employment, hours worked, Europe-US hours gap, demographic structure |
| JEL: | E24 J21 J22 |
| Date: | 2016–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10179&r=eur |
| By: | Welteke, Clara (DIW Berlin); Wrohlich, Katharina (DIW Berlin) |
| Abstract: | This paper analyzes to what extent parental leave decisions of mothers with young children depend on the decisions made by their coworkers. The identification of peer effects, which are defined as indirect effects of the behavior of a social reference group on individual outcomes, bears various challenges due to correlated characteristics within social groups and endogenous group membership. We overcome these challenges by exploiting quasi-random variation in the costs of parental leave during a narrow window around a cutoff date, induced by a parental leave benefit reform in Germany. The reform encourages mothers to remain at home during the first year following childbirth. Administrative linked employer-employee panel data enable us to assign a peer group to all individuals who work in the same establishment and occupational group. While there is a growing literature on peer effects, few studies look at peer effects in the context of parental leave decisions. We argue, however, that mothers with young children are particularly susceptible to peer behavior at the workplace due to preferences for conformity with peer group behavior as well as the career-related uncertainty that mothers face. Our results suggest that maternal decisions regarding the length of parental leave are significantly influenced by coworker decisions, in particular in situations with high uncertainty. |
| Keywords: | peer effects, social interaction, labor supply, family policy |
| JEL: | C31 J22 D04 |
| Date: | 2016–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10173&r=eur |
| By: | Imre Ferto (Institute of Economics - Centre for Economic and Regional Studies, Hungarian Academy of Sciences); Jeremias Mate Balogh (PhD candidate, Corvinus University of Budapest, Department of Agricultural Economics and Rural Development) |
| Abstract: | In recent decades, New World has increased its wine export to European markets and became considerable in the global wine competition. However, the export share of traditional wine producers has decreased; Europe still remained market leader on world wine market. Moreover, the global wine market is characterised by progressively concentrated production, France, Italy and Spain accounting for about 50% of world wine production. Consequently, it is important to investigate what kind of pricing strategy the largest wine exporters of the world including France, Italy, Spain, Portugal and Germany can employ in their foreign wine export markets. The pricing behavior of five European wine exporters in their major destination markets is examined using a pricing-to-market (PTM) model for noncompetitive and exchange rate related pricing behaviour between 2000 and 2013. The results suggest that France and Italy were able to pursue price discrimination in many wine export destinations by contrast this advantage was not observable in a case of Spain, Portugal and Germany. The analysis of the asymmetric effects of exchange rates on wine export prices suggests that in many cases the depreciation of Australian, Hong Kong’s; Singapore’s dollar relating to euro had a greater impact than the appreciation while appreciation of Canadian and Singaporean dollar exceeded the effect of depreciation. |
| Keywords: | price discrimination, pricing to market (PTM), wine industry |
| JEL: | Q17 F13 F14 |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=RePEc:has:discpr:1624&r=eur |
| By: | Kieron Barclay (Max Planck Institute for Demographic Research, Rostock, Germany); Martin Hällsten; Mikko Myrskylä (Max Planck Institute for Demographic Research, Rostock, Germany) |
| Abstract: | Previous research on birth order has consistently shown that later-borns have lower educational attainment than first-borns, however it is not known whether there are birth order patterns in college major. Given empirical evidence that parents disproportionately invest in first born children, there are likely to be birth order patterns attributable to differences in both opportunities and preferences, related to ability, human capital specialization through parent-child transfers of knowledge, and personality. Birth order patterns in college major specialization may shed light on these explanatory mechanisms, and may also account for long-term birth order differences in educational and labour market outcomes. Furthermore, given that within-family differences in resource access are small compared to between-family differences, the explanatory potential of these mechanisms has the potential to say much more about inequality production mechanisms in society at large. Using Swedish population register data and sibling fixed effects we find large birth order differences in university applications. First-borns are more likely to apply to, and graduate from, medicine and engineering programs at university, while later-borns are more likely to study journalism and business programs, and to attend art school. We also find that these birth order patterns are stronger in high SES families. These results indicate that early life experiences and parental investment shapes sibling differences in ability, preferences, and ambitions even within the shared environment of the family. |
| Keywords: | Sweden, birth order |
| JEL: | J1 Z0 |
| Date: | 2016–08 |
| URL: | http://d.repec.org/n?u=RePEc:dem:wpaper:wp-2016-008&r=eur |
| By: | Sittl, Roman; Warnke, Arne Jonas |
| Abstract: | In this paper we consider trends in the distribution of player talent across association football clubs over time. Player talent is the most important prerequisite for team success in professional sports leagues and changes in players' assortativeness in regard to the clubs they play for may arguably be an important factor for changes in competitive balance. We offer a new approach for measuring player talent and its distribution - the partial correlation of each player with the goal margin. We use this measure to analyze the degree of competitive balance over time. This approach enables us to examine how player mobility drives competitive balance over time. Empirical results are based on 19 seasons of the first two divisions of the German Bundesliga as well as domestic cup games. Our results show a decrease in competitive balance over time; better teams tend to attract increasingly better players. We show that this is driven by an increasingly unequal inter-divisional distribution of teams, coaches and players, as well as increasing assortativeness in the 1st Bundesliga. We further demonstrate that player transfers between Bundesliga teams results in assortative matching between players and teams. These domestic transfers do not, however, explain the reduction in competitive balance over time. Furthermore, we show that UEFA Champions League payments may have contributed to the reduction in competitive balance over the last two decades. |
| Keywords: | competitive balance,uncertainty of outcome,player mobility,playing talent,football,association football,soccer,sports economics,Bundesliga,UEFA champions league |
| JEL: | Z2 J44 J63 L51 L83 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:16058&r=eur |
| By: | Katharina Jaik (Department of Business Administration, University of Zurich); Stefan C. Wolter (University of Bern; Swiss Coordination Center for Research in Education; CESifo and IZA) |
| Abstract: | The transition from compulsory schooling to upper-secondary education is a crucial and frequently difficult step in the educational career of young people. In this study, we analyze the impact of one non-cognitive skill, locus of control, on the intention and the decision to delay the transition into post-compulsory education in Switzerland. We find that locus of control, measured at ages 13–14, has a significant impact on the intention to delay the transition into upper-secondary education. Furthermore, we find that the intention to delay the transition is strongly correlated with the actual delay, measured one and a half years after the intention. Finally, students with the initial intention to delay but successfully continuing into upper-secondary education show a stronger internal locus of control than comparable students who do delay their transition. |
| Keywords: | Locus of control, school-to-school transition |
| JEL: | I21 J24 |
| Date: | 2016–08 |
| URL: | http://d.repec.org/n?u=RePEc:iso:educat:0118&r=eur |
| By: | Rasmus Landerso (Aarhus Universitet); James J. Heckman (The University of Chicago) |
| Abstract: | This paper examines the sources of differences in social mobility between the U.S. and Denmark. Measured by income mobility, Denmark is a more mobile society, but not when measured by educational mobility. There are pronounced nonlinearities in income and educational mobility in both countries. Greater Danish income mobility is largely a consequence of redistributional tax, transfer, and wage compression policies. While Danish social policies for children produce more favorable cognitive test scores for disadvantaged children, these do not translate into more favorable educational outcomes, partly because of disincentives to acquire education arising from the redistributional policies that increase income mobility. |
| Keywords: | Inequality, education, social mobility, comparative analysis of systems |
| JEL: | I24 I28 I32 P51 |
| Date: | 2016–08 |
| URL: | http://d.repec.org/n?u=RePEc:hka:wpaper:2016-017&r=eur |