nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2016‒09‒18
seventeen papers chosen by
Giuseppe Marotta
Università degli Studi di Modena e Reggio Emilia

  1. Determinants of exports: firm heterogeneity and local context By Pietro de Matteis; Filomena Pietrovito; Alberto Franco Pozzolo
  2. Mind the employment gap: an impact evaluation of the Czech “multi-speed” parental benefit reform By Alzbeta Mullerova
  3. Employment insecurity and employees’ health in Denmark By Elena Cottini; Paolo Ghinetti
  4. Mapping public support for further European unification: a multilevel analysis By Kristel Jacquier
  5. Did EU accession improve efficiency of firms from transitional countries? By Jenifer Piesse; Dragana Radicic; Allan Webster
  6. Cluster Policy and Firm Performance: A Case Study of the French Optic/Photonic Industry By Amel Ben Abdesslem; Raphaël Chiappini
  7. Analysing the impact of renewable energy regulation on retail electricity prices By Pablo del Rio; Pere Mir-Artigues; Elisa Trujillo-Baute
  8. The impact of social transfers on income poverty and material deprivation By Geranda Notten; Anne-Catherine Guio
  9. Productivity and reallocation: evidence from the universe of Italian firms By Andrea Linarello; Andrea Petrella
  10. Work-related learning and skill development in Europe: Does initial skill mismatch matter? By Ferreira Sequeda, Maria; Künn, Annemarie; de Grip, Andries
  11. Investing in Photovoltaics: Timing, Plant Sizing and Smart Grids Flexibility By Bertolini, Marina; D’Alpaos, Chiara; Moretto, Michele
  12. Energy efficiency and rebound effect in European road freight transport By Llorca, Manuel; Jamasb, Tooraj
  13. Waste haven effect: unwrapping the impact of environmental regulation By Thais Nuñez-Rocha
  14. Pros and Cons of Introducing a Mandatory Country of Origin Labelling for Dairy Products in Germany By Salamon, Petra; Weible, Daniela; Weber, Sascha; Christoph-Schulz, Inken
  15. Social transfers and poverty in Europe: comparing social exclusion and targeting across welfare regimes By Massimo Baldini; Giovanni Gallo; Manuel Reverberi; Andrea Trapani
  16. STEM graduates and secondary school curriculum: does early exposure to science matter? By Marta De Philippis

  1. By: Pietro de Matteis (Banca d'Italia); Filomena Pietrovito (Università degli Studi del Molise); Alberto Franco Pozzolo (Università degli Studi del Molise)
    Abstract: It is frequently argued that the geographical context in which firms operate can have a crucial impact on their propensity to internationalize. In this paper, we present the results of an empirical analysis that examines the determinants of export performance for a sample including more than 4,300 Italian manufacturing firms over the period 2000-2013, focusing on the role of provincial context, after controlling for firm-level characteristics. To this end, we first adopt a cluster analysis methodology to classify each Italian province in terms of context variables, such as: the distance to foreign markets, the level of human and social capital and the degree of efficiency of the public administration. Second, we estimate a set of binomial choice and linear models to assess the impact of the economic and social environment on the extensive and intensive margins of trade. The results, after confirming that firm-specific factors (size, experience, productivity, capital intensity, innovation, geographical agglomeration and, to some extent, credit constraints) affect both the intensive and the extensive margins of exports, show that context characteristics at the province level have an additional (statistically and economically) significant impact on the export performances of firms.
    Keywords: firm internationalization, local context, firm heterogeneity
    JEL: D22 F10 F14 F18
    Date: 2016–09
  2. By: Alzbeta Mullerova
    Abstract: Parental leave is a key policy tool for addressing work-life reconciliation issues inherent to parenthood, including maternal employment and its continuity. The 2004 Czech accession to the EU shed light on the scope of the employment gap between women with and without children at pre-school age, highest among all the OECD countries (41%). This is due to very long universal paid parental leave: 4 years per child. In order to tackle this gap and to conform to the EU trend, a major reform was designed in 2008, and this paper investigates its effects on mothers’ participation and employment. I use the Labour Force Survey to assess the effect of this reform on maternal employment and activity levels, thanks to a difference-in-differences identification strategy. The reform provided an extensive change in financial incentives in favour of shorter leaves, and I show that effects on return-to-work timing are large and significant. However, if mothers do respond to the incentive by advancing the timing of the return to work by one year, the eligibility restrictions as well as the public childcare shortage narrow - de facto - the scope of the effect, which merely compensates for the massive opposite trend induced in the 1990s.
    Keywords: Parental Leave, Policy Evaluation, Female Labour Force Participation.
    JEL: J16 J18 P30
    Date: 2016
  3. By: Elena Cottini; Paolo Ghinetti (Università Cattolica del Sacro Cuore; Dipartimento di Economia e Finanza, Università Cattolica del Sacro Cuore)
    Abstract: We use register data for Denmark (IDA) merged with the Danish Work Environment Cohort Survey (1995-2000-2005) to estimate the effect of employment insecurity on health for a sample of Danish employees. We consider two health measures from the SF-36 Health Survey Instrument: a vitality scale for general wellbeing and a mental health scale. We use three dimensions of perceived employment insecurity: the fear of job loss (job tenure insecurity), of being transferred against will (job status insecurity) and of not finding another job if the current one is lost (employability insecurity). The nature of the dataset enables us to account for both individual and firm fixed. Results show that, overall, employment insecurity matters for both health measures. All the three insecurity dimensions increase psychological distress of workers, while general wellbeing is negatively affected mostly by employability prospects. We also exploit within country variability in employment protection rules by tenure and between blue and white collars to analyse differences in the health effect of our insecurity measures over these dimensions. We find substantial heterogeneity by tenure (attenuated effects by increasing tenure especially for job tenure insecurity) and occupation (white collars are worse off in their health gradient compared to blue collars).
    Keywords: job insecurity, employability, mental health, vitality, individual plus firm fixed effects.
    JEL: I12 J81 J65
    Date: 2016–07
  4. By: Kristel Jacquier (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics)
    Abstract: Using individual-level data from the European Social Survey, a multilevel analysis involving 21 countries was conducted to identify contextual preference formation. We show that individual predictors such as education work differently in different institutional contexts. Contrary to previous finding in the literature we find that the higher the percentage of tertiary education, the smaller the education gap in public support for the EU.
    Keywords: multilevel data,survey research,european integration
    Date: 2016–04
  5. By: Jenifer Piesse (Bournemouth University and University of Stellenbosch); Dragana Radicic (University of Cambridge); Allan Webster (Bournemouth University, Executive Business Centre)
    Abstract: This empirical study examines the effect of EU accession on firm efficiency in a sample of 27 transitional countries using data from the 2005 and 2013 BEEPS surveys. Using stochastic frontier analysis and a separate propensity score matching approach it finds a statistically significant association between EU membership and firm performance in both cross-sections. Since EU membership involves more than the liberalisation required for the single market it also uses propensity score matching to find a statistically significant association between EU membership and the internationalisation of firms in transitional countries. Finally it uses inverse probability weighted regression adjustment (IPWRA) to test the proposition that stronger firm performance in transitional countries was associated with firms with higher levels of internationalisation (exports and foreign ownership). Our results support the view that EU membership enhanced firm efficiency in new members from transitional economies and that internationalisation was an important mechanism in that process.
    Keywords: firm efficiency; productivity; European Union; transition
    JEL: F14 F15 D22 I25
    Date: 2016–08
  6. By: Amel Ben Abdesslem (LAREFI; University of Bordeaux, France); Raphaël Chiappini (Université Côte d'Azur; GREDEG CNRS)
    Abstract: This study empirically analyzes the effects of a cluster policy on firms' productivity, exports, employment and capital in the French optic/photonic industry. Exploiting firm-level data, we first analyze the selection process of the French cluster policy through a logit model, before combining a propensity score matching procedure and a differences-in-differences estimation in order to capture its impact on firms' performance in the optic/photonic industry. We first show that larger firms are more likely to be selected by the French public policy in the optic/photonic industry. Second, the firms that have received the competitiveness cluster label have become more productive. We also found a positive and significant impact of the public policy on exports, total fixed assets and employment, but no evidence has been found localization economies. Third, when compared to an industrial cluster that only benefits from agglomeration economies, we found that firms from the competitiveness clusters have experienced a labor productivity gain, greater employment, and an increase in total fixed assets.
    Keywords: Cluster policy, productivity, difference-in-difference, optic/phonotic industry
    JEL: L25 L52 R12
    Date: 2016–09
  7. By: Pablo del Rio (IPP-CSIC); Pere Mir-Artigues (UdL & Energy Sustainability Research Group (UB)); Elisa Trujillo-Baute (University of Warwick & Barcelona Institute of Economics,Chair of Energy Sustainability)
    Abstract: Retail electricity prices have substantially increased in the last decade in the European Union (EU) as a result of different regulations, raising the concern of policy makers. The growth in the support costs for electricity from renewable energy sources (RES-E) has often been singled out as a main driver of these prices. The aim of this paper is to analyse the degree of influence of RES-E promotion costs on the evolution of the retail price of electricity in the EU Member States. The analysis is carried out for households as well as for industry, with the help of a panel data econometric model. Our results show that the impact of renewable energy promotion costs on the retail electricity prices is positive and statistically significant, although relatively small. Differences across consumer types can be observed. An increase of 1% in those costs induces an average increase of only 0.023% in industrial retail prices and 0.008% in the residential retail prices. This impact on retail prices is mediated by the type of support scheme being adopted, with price-based support instruments showing a greater effect than quantity-based ones.
    Keywords: Electricity prices, renewable energy, public support
    JEL: L11 Q41 C24
    Date: 2016
  8. By: Geranda Notten; Anne-Catherine Guio
    Abstract: This paper develops a simulation approach to study the effects of income transfers on material deprivation. The method is applied to pre-recession and post-austerity EU-SILC data for Germany, Greece, Poland and the United Kingdom. The results show that income transfers can not only reduce income poverty but they can also substantially reduce the extent and depth of material deprivation. Changes in social transfers have therefore a two-fold effect on the Europe 2020 poverty reduction target.
    Keywords: economic well-being, poverty, social exclusion, income, material deprivation, social transfers, Europe 2020 strategy, simulation
    JEL: D31 I32 I38
    Date: 2016–09
  9. By: Andrea Linarello (Banca d'Italia); Andrea Petrella (Banca d'Italia)
    Abstract: This paper investigates the contribution of allocative efficiency to aggregate labor productivity growth in Italy between 2005 and 2013. Exploiting a unique dataset that covers the universe of active firms, we find that allocative efficiency accounted for 35 per cent of aggregate productivity in 2005 and its weight increased by almost 7 percentage points during the period of observation. We show that the dynamics of aggregate labor productivity benefited from the reallocation of resources among continuing firms and from the net effect of business demography. Among industries, we find that reallocation has been stronger in industries that are more exposed to import competition from developing countries. Moreover, we document that the observed adjustments have not evenly affected all firms across the productivity distribution: selection has become tougher for firms belonging to the lower tail, forcing the exit of the least productive firms and favoring the reallocation of the workforce to the best performing firms.
    Keywords: aggregate labor productivity, allocative efficiency
    JEL: L25 O47
    Date: 2016–09
  10. By: Ferreira Sequeda, Maria (General Economics 2 (Macro)); Künn, Annemarie (ROA / Dynamics of the labour market); de Grip, Andries (Research Centre for Educ and Labour Mark)
    Abstract: This paper provides more insight into the relevance of the assumption of human capital theory that the productivity of job-related training is driven by the improvement of workers’ skills. We analyse the extent to which training and informal learning on the job are related to employee skill development and consider the heterogeneity of this relationship with respect to workers’ skill mismatch at job entry. Using data from the 2014 European Skills Survey, we find – as assumed by human capital theory – that employees who participated in training or informal learning show greater improvement of their skills than those who did not. The contribution of informal learning to employee skill development appears to be larger than that of training participation. Nevertheless, both forms of learning are shown to be complementary. This complementarity between training and informal learning is related to a significant additional improvement of workers’ skills. The skill development of workers who were initially underskilled for their job seems to benefit the most from both training and informal learning, whereas the skill development of those who were initially overskilled benefits the least. Work-related learning investments in the latter group seem to be more functional in offsetting skill depreciation than in fostering skill accumulation.
    Keywords: training, informal learning, skill development, skill mismatch, human capital
    JEL: J24 M53
    Date: 2016
  11. By: Bertolini, Marina; D’Alpaos, Chiara; Moretto, Michele
    Abstract: In Italy and in many EU countries, the last decade was characterized by a large development of distributed generation power plants. Their presence determined new critical issues for the design and management of the overall energy system and the electric grid due to the presence of discontinuous production sources. It is commonly agreed that contingent problems that affect local grids (e.g. inefficiency, congestion rents, power outages, etc.) may be solved by the implementation of a “smarter” electric grid. The main feature of smarts grid is the great increase in production and consumption flexibility. Smart grids give producers and consumers, the opportunity to be active in the market and strategically decide their optimal production/consumption scheme. The paper provides a theoretical framework to model the prosumer’s decision to invest in a photovoltaic power plant, assuming it is integrated in a smart grid. To capture the value of managerial flexibility, a real option approach is implemented. We calibrate and test the model by using data from the Italian energy market.
    Keywords: Smart Grids, Renewable Energy Sources, Real Options, Prosumer, Resource /Energy Economics and Policy, Q42, C61, D81,
    Date: 2016–09–07
  12. By: Llorca, Manuel; Jamasb, Tooraj
    Abstract: Energy efficiency has become a primary energy policy goal in Europe and many other countries and has conditioned the policies towards energy-intensive sectors such as road freight transport. However, energy efficiency improvements can lead to changes in the demand for energy services that offset some of the expected energy savings in the form of rebound effects. Consequently, forecasts of energy savings can be overstated. This paper analyses the energy efficiency and rebound effects for road freight transport in 15 European countries during the 1992-2012 period. We use a recent methodology to estimate an energy demand function using a stochastic frontier analysis approach and examine the influence of key features of rebound effect in the road freight transport sector. We obtain on average a fuel efficiency of 91% and a rebound effect of 18%. Our results indicate that the achieved energy efficiencies are retained to a large extent. We also find, among other results, that the rebound effect is higher in countries with higher fuel efficiency and better quality of logistics. Finally, a simulation analysis shows significant environmental externalities costs even in countries with lower rebound effect.
    Date: 2016
  13. By: Thais Nuñez-Rocha (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)
    Abstract: A new branch of the literature on international trade and environment suggests that developing countries are becoming waste havens for their developed counterparts, due to environmental regulation differences with trade partners. This paper analyses the effectiveness of the Basel Convention formalisation in the European Union (EU-WSR), by studying the impact of the EU-WSR on hazardous waste trade, first on the less developed EU countries, and then on regions of developing countries. It does so, by means of a gravity model framework applied to a panel data-set. Results show that there is no enough evidence to call for waste haven effect in the less developed EU countries, with both aggregated and disaggregated measures of environmental regulations, but increasing institution efficiency differences could lead to increasing imports of waste. In the regional analysis, there is no evidence of the efficacy of the EU-WSR. These findings provide insights into the efficacy of European engagements on waste trade, indicating that there is no simple answer as to its effect.
    Keywords: difference-in-differences,international environmental agreements,Hazardous waste,waste haven effect,international trade,log-linear and ppml gravity model
    Date: 2016–05
  14. By: Salamon, Petra; Weible, Daniela; Weber, Sascha; Christoph-Schulz, Inken
    Abstract: with a regional declaration of the origin concerning main ingredients and their place of processing, protected designations of origin (PDO) and protected geographical indications (PGI) regulated by (EU) No 1151/2012 defined by particular quality or other value-adding characteristics or attributes. The German Food, Consumer Goods and Feed Code (LFGB) contains regulations for the protection of consumers against fraud and deception regarding origin labelling (LFGB, Article 11(1), sentence 2). Article 3(1) German Food Labelling Ordinance (LMKV) deals with indirect declarations of origin for food e.g., for milk products whereas it is mandatory to specify the name of the company or producer by an id-code so that an identification is guaranteed. In this context the main point is discussion is, that consumers may want to identify place of origin of the raw material and or processing of dairy products, but, at the moment, they are unable to do so with respect to all products offered.
    Keywords: Agribusiness,
    Date: 2016–05
  15. By: Massimo Baldini; Giovanni Gallo; Manuel Reverberi; Andrea Trapani
    Abstract: This paper studies whether there are systematic differences in the ability of cash transfers, belonging to different welfare systems, to reach the poor and to lift them out of poverty. We structure the analysis following the classic breakdown of the various European welfare states into welfare regimes, in search of specific features of them that can explain the variable results shown in the ability to effectively tackle economic poverty. The analysis is carried out both with a cross-sectional approach as well as using a more long-run definition of persistent poverty.
    Keywords: Cash transfers; Poverty; Europe; Welfare Regimes; Persistent poverty.
    JEL: I3 I38 H53
    Date: 2016–08
  16. By: Marta De Philippis
    Abstract: Increasing the number of Science, Technology, Engineering and Math (STEM) university graduates is considered a key element for long-term productivity and competitiveness in the global economy. Still, little is known about what actually drives and shapes students' choices. This paper focusses on secondary school students at the very top of the ability distribution and explores the effect of more exposure to science on enrolment and persistence in STEM degrees at the university and on the quality of the university attended. The paper overcomes the standard endogeneity problems by exploiting the different timing in the implementation of a reform that induced secondary schools in the UK to offer more science to high ability 14 year-old children. Taking more science in secondary school increases the probability of enrolling in a STEM degree by 1.5 percentage point and the probability of graduating in these degrees by 3 percentage points. The results mask substantial gender heterogeneity: while girls are as willing as boys to take advanced science in secondary school - when offered -, the effect on STEM degrees is entirely driven by boys. Girls are induced to choose more challenging subjects, but still the most female-dominated ones.
    Keywords: university education; high school curriculum; STEM
    JEL: I21 I28 J16 J24
    Date: 2016–08
  17. By: Alvaro S Almeida (CEF.UP and Faculdade de Economia, Universidade do Porto)
    Abstract: The national health services (NHS) of England, Portugal, Finland and other single-payer universalist systems financed by general taxation, are based on the theoretical principle of an integrated public sector payer-provider. However, in practice one can find different forms of participation of non-public healthcare providers in those NHS, including private for profit providers, but also third sector non-profit organizations (NPO). This paper reviews the role of non-public non-profit healthcare organizations in NHS systems. By crossing a literature review on privatization of national health services with a literature review on the comparative performance of non-profit and for-profit healthcare organizations, this paper assesses the impact of contracting private non-profit healthcare organizations on the efficiency, quality and responsiveness of services, in public universal health care systems. The results of the review were then compared to the existing evidence on the Portuguese hospital devolution to NPO program. The evidence in this paper suggests that NHS health system reforms that transfer some public sector hospitals to NPO should deliver improvements to the health system with minimal downside risks. The very limited existing evidence on the Portuguese hospital devolution program suggests it improved efficiency and access, without sacrificing quality.
    Keywords: health systems, non-profit organizations, privatization
    JEL: I11 I18
    Date: 2016–09

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