|
on Microeconomic European Issues |
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Issue of 2016‒12‒18
28 papers chosen by Giuseppe Marotta Università degli Studi di Modena e Reggio Emilia |
| By: | Hendrik Schmitz; Reinhard Madlener |
| Abstract: | Space heating and hot water expenditures make up the majority of household energy demand in Germany, at 83.2%, making them an attractive target for energy policies. Using a panel dataset derived from yearly residential household surveys covering the years 1996 to 2014, we identify the determinants of heating expenditures for German households. We discover significant heterogeneity in expenditures depending on socioeconomic variables. For the full sample, we find a price elasticity of heating expenditures of 0.629. Elasticities vary significantly between individual groups, with values ranging from 0.523 to 0.716. Furthermore, a large number of technical and socio-demographic factors are significant in determining energy use. Our findings have implications for evaluating the effectiveness of policy measures that aim at influencing energy use across different groups of consumers. |
| Keywords: | Germany, heating demand, heating expenditures, heterogeneity, space heating |
| JEL: | C23 D12 Q41 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp877&r=eur |
| By: | Salvador Barrios (European Commission - JRC); Francesco Figari (University of Insubria and ISER University of Essex); Luca Gandullia (University of Genova); Sara Riscado (European Commission - JRC) |
| Abstract: | Tax expenditures are preferential tax treatments granted to specific individuals or categories of households which aim at achieving social and economic goals – poverty and inequality reduction, and employment promotion, among others. Tax expenditures are widely used by EU Member States. However, their fiscal and equity impacts are not always clear and their effectiveness and efficiency as a policy instrument needs to be carefully evaluated, especially in the present context of constrained public finances. Tax expenditures might in some cases distort economic incentives be it towards consumption or investment, in some case by favouring rent seeking behaviour and making tax systems less transparent and/or regressive from a social viewpoint. While policy recommendations often call for streamlining tax expenditures, in practice policy measures are often difficult to design in particular given the difficulty in measuring the fiscal and equity impact of tax expenditures. This paper quantifies the fiscal and equity effects of tax expenditures in 27 European countries making use of EUROMOD, the EU-wide microsimulation model. We focus on four specific categories of preferential tax treatments affecting personal income taxation related to housing, pension, education and health expenditures. One key feature of the microsimulation model EUROMOD is that it embeds the interaction between different tax instruments and benefits entitlement which, in EU tax systems, proves essentially to fully gauge the fiscal and equity impact of tax expenditures. In order to quantify the impact of tax expenditure on governments' tax revenues and on households' disposable income a benchmark tax system scenario is created where tax expenditures – in the form of allowances, deductions, exemptions, reliefs and credits – are explicitly considered. We find a variety of effects, in terms of sign and magnitude, across Member States, and within these, among types of households and across generations. Overall our findings suggest that the impact of tax expenditure on tax revenues and on income inequalities can be sizeable. The redistributive impact of removing tax expenditures can go both directions, either on the progressive or regressive side, depending on the country and the tax expenditure considered. This result points out to the importance of a careful country specific scrutiny, for each type of tax expenditures. |
| Keywords: | Tax expenditures, microsimulation, fiscal and equity impacts |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:taxref:201601&r=eur |
| By: | Elzbieta Antczak; Ewa Galecka-Burdziak; Robert Pater |
| Abstract: | We analyse the extent to which spatial interactions affect the labour market matching process. We apply spatial econometrics methods, including spatial panel Durbin models, which are rarely used in labour market matching analysis. We use the data on stocks and inflows of unemployed individuals and vacancies registered at public employment offices in Poland. We conduct the analysis at the NUTS-3 and NUTS-4 levels in Poland for the period 2003-2014. We find that (1) spatial interactions affect the matching processes in the labour market; (2) workers commute long distances, and many of these commutes involve crossing only one administrative border; (3) spatial indirect, direct, and total spillover effects determine the scale of outflows from unemployment in the focal and adjacent areas; and (4) spatial modelling is a more appropriate approach than classical modelling for the matching function. |
| Keywords: | spatial interaction; spillover effect; matching function; region; |
| JEL: | C23 J61 J64 |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:cer:papers:wp578&r=eur |
| By: | Marco Di Cataldo; Andrés Rodríguez-Pose |
| Abstract: | The European Union promotes development strategies aimed at producing growth with “a strong emphasis on job creation and poverty reduction”. However, whether the economic conditions in place in EU regions are ideal for the generation of high- and low-skilled employment and labour market inclusion is unclear. This paper assesses how the key factors behind EU growth strategies – infrastructure, human capital, innovation, quality of government – condition employment generation and labour market exclusion in European regions. The findings indicate that the dynamics of employment and social exclusion vary depending on the conditions in place in a region. While higher innovation and education contribute to overall employment generation in some regional contexts, low-skilled employment grows the most in regions with a better quality of government. Regional public institutions, together with the endowment of human capital, emerge as the main factors for the reduction of labour market exclusion – particularly in the less developed regions – and the promotion of inclusive employment growth across Europe. |
| Keywords: | social exclusion; employment; skills; regions; Europe |
| JEL: | J64 O52 R23 |
| Date: | 2016–10–04 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:68510&r=eur |
| By: | Wojciech Hardy (Institute for Structural Research (IBS); Faculty of Economics, University of Warsaw); Roma Keister (Institute for Structural Research (IBS)); Piotr Lewandowski (Institute for Structural Research (IBS); Institute of Labor Economics (IZA)) |
| Abstract: | In this paper we analyse the changes in the task content of jobs in Central and Eastern European countries between 1998 and 2013. We link the O*NET data on occupational characteristics with EU-LFS, following the approach of Autor, Levy and Murnane (2003), and Acemoglu and Autor (2011). We find that the CEE countries witnessed similar trends of rising intensity of non-routine cognitive tasks, and a decreasing intensity of manual tasks, although they differed with regards to changes in the routine cognitive task content. We assess the relative role played by education and technology in the development of task contents. We also decompose the observed changes into the contributions of sectoral, educational and occupational changes as well as the interaction between them. Our results show that workforce upskilling was the major factor behind the evolution of non-routine cognitive and manual tasks in CEE, whereas structural changes and shifts towards work with lower speed of de-routinisation have shaped routine cognitive tasks. |
| Keywords: | task content of jobs, routinization, job polarization, Central and Eastern Europe |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:hku:wpaper:201640&r=eur |
| By: | Odolinski , Kristofer (VTI); Nilsson , Jan-Eric (VTI) |
| Abstract: | One cornerstone of EU’s railway policy is that track user charges should be based on marginal costs for infrastructure use. This paper updates knowledge about the marginal cost of maintaining Sweden’s railway network. Using an extended panel dataset, now comprising 16 years, we corroborate previous results using a static model framework. However, the results from the dynamic model show that an increase in maintenance cost during one year increases costs in the next year, which is contrasting previous estimates on a shorter panel dataset. We conclude that more data made a difference in a dynamic setting, but the estimated cost elasticities are rather robust in a European context. |
| Keywords: | Marginal cost; Rail infrastructure; Maintenance; Access charging; Dynamic model |
| JEL: | L92 R48 |
| Date: | 2016–12–09 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ctswps:2016_027&r=eur |
| By: | Crass, Dirk; Rammer, Christian; Aschhoff, Birgit |
| Abstract: | The paper analyzes how geographical clustering of beneficiaries might affect the effectiveness of public innovation support programs. The geographical proximity of firms operating in the same industry or field of technology is expected to facilitate innovation through knowledge spillovers and other localization advantages. Public innovation support programs may leverage these advantages by focusing on firms that operate in a cluster. We investigate this link using data from a large German program that co-funds R&D projects of SMEs in key technology areas called 'Innovative SMEs'. We employ three alternative cluster measures which capture industry, technology and knowledge dimensions of clusters. Regardless of the measure, firms located in a geographical cluster are more likely to participate in the program. Firms being part of a knowledge-based cluster significantly increases their chance of receiving public financial support. We find no effects, however, of geographical clustering on the program's effectiveness in terms of input or output additionality. |
| Keywords: | Innovation,Government Policy,Regional Government Analysis |
| JEL: | C35 H50 O31 O32 O38 R59 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:16083&r=eur |
| By: | Orea, L.; Álvarez, I; Jamasb, T. |
| Abstract: | An important methodological issue for the use of efficiency analysis in incentive regulation of regulated utilities is how to account for the effect of unobserved cost drivers such as environmental factors. This study combines the spatial econometric approach with stochastic frontier techniques to control for unobserved environmental conditions when measuring firms’ efficiency in the electricity distribution sector. Our empirical strategy relies on the geographic location of the firms as a useful source of information that has previously not been explored in the literature. The underlying idea in our empirical proposal is to utilise variables from neighbouring firms that are likely to be spatially correlated as proxies for the unobserved cost drivers. We illustrate our approach using the data of Norwegian distribution utilities for the years 2004 to 2011. We find that the lack of information on weather and geographic conditions can likely be compensated with data from surrounding firms using spatial econometric techniques. Combining efficiency analysis and spatial econometrics methods improve the goodness-of-fit of the estimated models and, hence, more accurate (fair) efficiency scores are obtained. The methodology can also be used in efficiency analysis and regulation of other types of utility sectors. |
| Keywords: | Spatial econometrics, stochastic frontier models, environmental conditions, electricity distribution networks. |
| JEL: | D24 L51 L94 |
| Date: | 2016–12–12 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:1673&r=eur |
| By: | Eva M. Berger (Johannes Gutenberg University Mainz); Luke Haywood (DIW Berlin (Deutsches Institut für Wirtschaftsforschung)) |
| 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 ?nd that this effect is particularly pronounced in jobs in which the penalties in terms of lower wage growth are highest. We thus argue that the effect of LOC on return is mainly related to differential appreciation of the career costs of longer maternity leave. |
| Keywords: | Locus of Control, Noncognitive Skills, Personality, Maternal Employment, Female Labor Supply, Survival Analysis |
| JEL: | J22 J24 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:jgu:wpaper:1614&r=eur |
| By: | Kai-Uwe Müller; Michael Neumann |
| Abstract: | This paper provides evidence over a long time period on the question of who bears the burden of social security contributions (SSC) in Germany. Following Alvaredo et al. (2016) we exploit kinks in the budget set generated by a drop in the marginal SSC rate at earnings caps. Based on cross-sectional earnings distributions the framework does not rely on policy reforms. Applying the approach to administrative data for West Germany facilitates a comprehensive incidence analysis between 1975 and 2010. We find that neither employers nor employees shift a substantial part of their SSC burden. These results are consistent over the whole time period and in robustness checks corroborating previous findings. A small trend towards a slight increase in the SSC burden falling on employees is not statistically significant. |
| Keywords: | Incidence, social security contributions, discontinuities |
| JEL: | H22 J38 H55 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1627&r=eur |
| By: | Pietro Battiston; Simona Gamba |
| Abstract: | We study the behavior of individuals coming from different geographic regions of Italy, in a same public good game. We confirm previous findings according to which, faced with the same incentives and experimental conditions, Southern citizens exhibit a lower propensity to cooperate than Northern ones. This difference is mainly explained by a gap in the impact of coordination devices available to participants, as we show by manipulating them. Most importantly, when subjects with different geographic origins are teamed up together, their contributions decrease with respect to homogeneous groups, again because of a reduced effect of coordination devices. These findings reinforce the interpretation of the Italian South-North divide as related to trust, prejudice and a consequent path-dependence in levels of social capital, rather than due to the mere effect of differences in institutions and economic opportunities. |
| Keywords: | public good, cooperation, social capital, cultural differences, laboratory experiment |
| Date: | 2016–12–13 |
| URL: | http://d.repec.org/n?u=RePEc:ssa:lemwps:2016/41&r=eur |
| By: | Jessen, Robin |
| Abstract: | I propose a method to decompose changes in income inequality into the contributions of policy changes, wage rate changes, and population changes while considering labor supply reactions. Using data from the Socio-Economic Panel (SOEP), I apply this method to decompose the increase in income inequality in Germany from 2002 to 2011, a period that saw tax reductions and a controversial overhaul of the transfer system. The simulations show that tax and transfer reforms have had an inequality reducing effect as measured by the Mean Log Deviation and the Gini coefficient. For the Gini, these effects are offset by labor supply reactions. In contrast, policy changes explain part of the increase in the ratio between the 90th and the 50th income percentile. Changes in wage rates have led to a decrease in income inequality. Thus, the increase in inequality was mainly due to changes in the population. |
| Keywords: | Inequality,Decomposition,Labor Supply,Microsimulation,Policy Reform |
| JEL: | D31 H23 I38 J31 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:fubsbe:201624&r=eur |
| By: | Isaac Kwame Essien Obeng (Department of Economics, Faculty of Business and Economics, Mendel university in Brno, Zemedelska 1, 613 00 Brno, Czech Republic) |
| Abstract: | The paper investigates economic impact of delayed payments caused by liquidity crisis in the European Union. Using micro data sets on financial statements of 54,277 firms for the period of 2005 to 2014 inclusive, we perform panel data analysis by estimating fixed effects regression models with selected macroeconomic shocks. The results show a high variability of late payments during the financial crisis compared to period of relative stable economic situation and late payments is significantly evident across countries under different economic conditions. Additionally, we identify a positive relationship between the response variable, late payments, and firm profitability measured with returns on assets, but a negative relationship with firm total assets as it depends on the speed of collections from receivables. The results suggest delays in payment of invoices beyond the given credit period across the different European Union member countries. |
| Keywords: | late payments, accounts receivable, accounts payable, credit collection, credit period, financial crisis, macroeconomic shocks |
| JEL: | M21 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:men:wpaper:66_2016&r=eur |
| By: | Romiti, Agnese (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]) |
| Abstract: | "Fertility and female labour force participation are no longer negatively correlated in developed countries. Recently, the role of immigration has been put forward as a driving factor among others. Increased immigration affects supply and prices of household services, which are relevant for fertility and employment decisions. This paper analyses the effect of immigration on labour supply and fertility of native women in the UK, with a focus on the role of immigration on household services. Adopting an instrumental variable approach based on the country-specific past distribution of immigrants at regional level, I find that immigration increases female labour supply, without affecting fertility. My results show that immigration increases the size of the childcare sector, and reduces its prices, suggesting that immigrants may ease the trade-off between working and child rearing among native women." (Author's abstract, IAB-Doku) ((en)) |
| JEL: | D10 F22 J13 J22 J61 |
| Date: | 2016–12–07 |
| URL: | http://d.repec.org/n?u=RePEc:iab:iabdpa:201640&r=eur |
| By: | Roberto Basile (Seconda Università di Napoli); Alessandro Girardi (ISTAT, Istituto Nazionale di Statistica); Marianna Mantuano (ISTAT, Istituto Nazionale di Statistica); Giuseppe Russo (Università di Salerno and CSEF) |
| Abstract: | The role of labour mobility on regional disparities is at the core of a heated debate: while standard competitive models posit that mobility works as an equilibrating device and reduces the unemployment, models featuring externalities lead to opposite conclusions. Against this backdrop, we present a simple two-region model adapted to the main features of the Italian North-South dualism that illustrates the effects of labour mobility with and without human capital externalities. We show that, when externalities are introduced, regional mobility may exacerbate regional unemployment disparities. Using longitudinal data over the years 2002- 2011 for 103 NUTS-3 Italian regions, we document that net outflows of human capital from the South to the North have increased the unemployment rate in the South and decreased the unemployment rate in the North. Our conclusions support the literature that finds an important role of regional externalities, and suggest that reducing human capital flight from Southern regions should be a priority. |
| Keywords: | Unemployment, Migration, Human capital, Externalities, Italian regions |
| JEL: | C23 R23 J61 |
| Date: | 2016–12–08 |
| URL: | http://d.repec.org/n?u=RePEc:sef:csefwp:460&r=eur |
| By: | Lawless, Martina; Lynch, Donal |
| Abstract: | This paper uses recently available information on the composition of household assets and liabilities to examine the impact of a tax on household wealth in Ireland under a wide range of assumptions on how such a tax might be designed. We compare results based on models of existing taxes on household wealth across Europe and a number of hypothetical scenarios to illustrate how the results are affected by varying qualifying thresholds or asset exemptions. We present revenue estimates and calculations for the percentage of households that would be liable for different qualifying thresholds, tax rates and exemptions for specific assets, such as the household main residence and farms. For each scenario, we further examine characteristics of affected households in terms of their income decile and demographic characteristics. Due to the imperfect correlation between income and wealth, we find that in almost every scenario, a non-negligible proportion of the tax would be collected from households in the lowest income deciles. |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:esr:wpaper:wp549&r=eur |
| By: | Eichhorst, Werner (IZA); Rinne, Ulf (IZA) |
| Abstract: | Youth unemployment has become a severe economic and societal problem in many European countries. Based on the existing empirical evidence on different policy options, this chapter draws lessons for future policy making in order to effectively promote youth employment in Europe. In conclusion, one should not be overly optimistic by expecting any short-term remedies. Although effective policy tools are available, they largely require forward-looking structural reforms. |
| Keywords: | labor policy, labor market institutions, vocational education and training, employment protection, minimum wage, activation |
| JEL: | J08 J13 J21 J24 J38 J61 J68 J88 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izapps:pp119&r=eur |
| By: | Brixy, Udo; Murmann, Martin |
| Abstract: | Recent research suggests that employment in young firms is more negatively impacted during economic downturns than employment in incumbent firms. This questions the effectiveness of policies that promote entrepreneurship to fight crises. We complement prior research that is mostly based on aggregate data by analyzing cyclical effects at the firm level. Using new linked employer-employee data on German start-ups we show that under constant human capital of the firms' founders, employment growth in less than 11=2-year-old start-ups reacts countercyclically and employment growth in older start-ups reacts procyclically. The young start-ups realize their countercyclical growth by hiring qualified labor market entrants who might be unable to find employment in incumbent firms during crises. This mechanism is highly important in economic and management terms and has not been revealed by prior research. |
| Keywords: | Firm growth,Entrepreneurship,Business cycle,Crisis |
| JEL: | E32 J23 L26 M13 L25 L11 D22 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:16079&r=eur |
| By: | Giacomo Pasini (Department of Economics, University Of Venice Cà Foscari); Rob Alessie (University of Groningen Faculty of Economics and Business); Adriaan Kalwij (A.S.Kalwij@uu.nl; School of Economics Universiteit Utrecht) |
| Abstract: | This paper investigates the timing of wealth transfers between generations. We develop an overlapping generations model in which each generation can borrow against its future income but not against expected bequest. As a result, generations relatively poorer than their parents may end up not smoothing consumption. We prove that if wealth transfers can take place earlier in life, then each generation smooths consumption despite the constraint on borrowing and the first best solution is restored. The model implies that parents transfer resources when the children are credit constrained. This implication is tested using Dutch survey data on households' intentions to make intervivos transfers matched with administrative data that allow to construct a measure of the probability of being in need of a transfer. All in all, the paper highlights the importance of intervivos transfers as a device that households can resort to in order to mitigate inter-generational wealth inequalities. |
| Keywords: | intervivos transfers, credit constraints, overlapping generations |
| JEL: | D12 D13 D91 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:ven:wpaper:2016:34&r=eur |
| By: | Rudiger Ahrend; Alexander C. Lembcke |
| Abstract: | This study approaches the question whether it “pays” to live in big(ger) cities in a three-fold manner: first, it estimates how city size affects worker productivity (agglomeration benefits) in Germany, based on individual-level wage data. Second, it considers whether productivity benefits translate into real gains for workers by taking local price levels into account. Third, it examines the role of amenities in explaining differences in real benefits across cities. The estimated elasticity for agglomeration benefits is around 0.02, implying that comparable workers in Hamburg (3 million residents) are about 6% more productive than in Recklinghausen (150 000). But agglomeration benefits are, on average, offset by higher prices, i.e. city size does not systematically translate into real pecuniary benefits for workers. Amenities, e.g. seaside access, theatres, universities, or “disamenities”, e.g. air pollution, explain – to a large degree – variation in real pecuniary benefits, i.e. real wages are higher in low-amenity cities. |
| Keywords: | agglomeration benefits, agglomeration costs, cities, cost of living, Functional Urban Areas, local amenities |
| JEL: | J31 R23 R12 |
| Date: | 2016–12–15 |
| URL: | http://d.repec.org/n?u=RePEc:oec:govaab:2016/9-en&r=eur |
| By: | Gerald J. Pruckner; Thomas Schober |
| Abstract: | Healthcare payers try to reduce costs by promoting the use of cheaper generic drugs. We show strong interrelations in drug prescriptions between the inpatient and outpatient sectors by using a large administrative dataset from Austria. Patients with prior hospital visits have a significantly lower probability of receiving a generic drug in the outpatient sector. The size of the effect depends on both the patient and doctor characteristics, which could be related to the differences in hospital treatment and heterogeneity in the physicians’ adherence to hospital choices. Our results suggest that hospital decisions create spillover costs in healthcare systems with separate funding for inpatient and outpatient care. |
| Keywords: | Prescription decision, generic drugs, physician behavior, hospitals. |
| JEL: | I11 I13 I18 H51 |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:jku:econwp:2016_11&r=eur |
| By: | Tânia Fernandes (Universidade do Minho, NIMA); Anabela Botelho (Universidade de Aveiro, GOVCOPP); Isabel Correia Dias (Universidade do Minho, NIMA); Lígia Costa Pinto (Universidade do Minho, NIMA); Jorge Teixeira (Hospital de Braga); Paula Veiga-Benesch (Universidade do Minho, NIMA) |
| Abstract: | The Portuguese national health service (NHS) is expected to provide safe and high quality care 24 hours a day, seven days a week. Everyday, patients with non-life threatening, short-term illnesses or health problems, for which they need convenient treatment or advice, use emergency care departments at hospitals. It is estimated that about one third could have been treated, or advised elsewhere, mainly in primary care (PC), community pharmacies or the national help phone line. This “inappropriate” use of emergency care departments represents an added cost, and a decreased efficiency for the Portuguese NHS. The literature suggests several explanations, either focusing on the system, or patients. This paper analyses whether a misperception of the severity of the health condition by the patients explain the excess demand. Results show that, in fact, there is an overestimation of the degree of severity of some clinical profiles, and therefore a preference for the use of emergency departments. However, when confronted with the real severity of those clinical profiles, only 50% of the cases change the choice of the emergency department (ED). It can also be derived from the results that socio-demographic characteristics and variables related to experience, with the services, and the clinical profiles are important determinants in the perception of severity of the clinical conditions. |
| Keywords: | Emergency department demand; experimental economics; elicitation of beliefs |
| JEL: | I1 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:nim:nimawp:65/2016&r=eur |
| By: | Sylvia Frühwirth-Schnatter (Department of Applied Statistics, Johannes Kepler University Linz, Austria); Stefan Pittner; Andrea Weber; Rudolf Winter-Ebmer |
| Abstract: | In this paper, we study data on discrete labor market transitions from Austria. In particular, we follow the careers of workers who experience a job displacement due to plant closure and observe – over a period of forty quarters – whether these workers manage to return to a steady career path. To analyse these discrete-valued panel data, we develop and apply a new method of Bayesian Markov chain clustering analysis based on inhomogeneous first order Markov transition processes with time-varying transition matrices. In addition, a mixture-of-experts approach allows us to model the prior probability to belong to a certain cluster in dependence of a set of covariates via a multinomial logit model. Our cluster analysis identifies five career patterns after plant closure and reveals that some workers cope quite easily with a job loss whereas others suffer large losses over extended periods of time. |
| Keywords: | Transition data, Markov Chain Monte Carlo, Multinomial Logit, Panel data, Inhomogeneous Markov chains |
| Date: | 2016–09 |
| URL: | http://d.repec.org/n?u=RePEc:jku:econwp:2016_10&r=eur |
| By: | Lerbs, Oliver; Teske, Markus |
| Abstract: | Individual sales prices and local vacancy rates in the housing market pose a natural analogy to the wage curve, a popular concept in labor economics that describes how individual wages decrease with higher local unemployment. While housing search and matching models and housing externalities strongly suggest a stable inverse relationship, there is still a lack of convincing empirical research on the sensitivity of house sales to local vacancy variation. Based on more than 10,000 single-family home transactions from the German market, this paper confirms a robust house price-vacancy curve among individual home prices and adjacent residential vacancies. The economic size of the relationship is highly comparable across all four analyzed states: a doubling of the vacancy rate at the municipality level is associated with a 5-8% discount in quality-controlled selling prices. Despite negative price signals, local vacancy distributions tend to persist over long time horizons, leaving room for policy intervention. |
| Keywords: | House prices,Housing vacancy,Hedonic regression,Wage curve |
| JEL: | R23 R31 R58 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:16082&r=eur |
| By: | Jose-Ignacio Anton (Johannes Kepler University Linz); René Böheim (Johannes Kepler University Linz); Rudolf Winter-Ebmer (Johannes Kepler University Linz) |
| Abstract: | We analyze the effects of increased immigration of foreign workers on the unionisation rates of native workers in Austrian firms over the period 2002–2012. Our results suggest that lower union density of natives’ in firms with more foreign workers is driven not by natives leaving unions, but by the different composition of turnover depending on the share of foreigners in the firm. |
| Keywords: | migration, unions, turnover, hiring |
| JEL: | J51 J61 J63 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:crm:wpaper:1630&r=eur |
| By: | Olena Havrylchyk |
| Abstract: | This study explores the effectiveness of the incentive mechanisms embedded within the UK’s Funding for Lending Scheme (FLS) for banks’ to expand their supply of lending to medium sized enterprises (SMEs). The FLS was announced by the Bank of England and HM Treasury in June 2012, with the aim of improving the supply of credit to the UK real economy. Despite the prevailing low level of risk-free interest rates, UK banks’ funding costs were elevated at the time of the Scheme's introduction, and the intention was to provide lenders with a stable source of lower-cost funding to support credit provision to the real economy. The Scheme’s design built in direct incentives for banks to support lending to the real economy, by linking both the price and quantity of funding available through the Scheme to their lending performance. This paper looks for evidence of the effectiveness of these incentives, exploiting a modification of the Scheme’s design for its extension in April 2013 to help identify changes in credit supply from credit demand. Specifically, the change sharpened incentives to lend to SMEs, relative to larger ones. This facilitates using a difference-in-difference approach, exploiting bank-level data on UK banking groups, to look for a direct impact of incentives on credit supply, considering larger companies as a control group. On the basis of the available dataset, it is not possible to identify that this change in the incentive structure of the FLS directly boosted loan growth to SMEs, relative to large firms, between the extension of the Scheme and the end of 2013. The results seem robust to using different metrics of credit supply. However, the dataset is unavoidably small, both in terms of number of lenders covered and the length of the period after the modification of the design. More generally, reductions in lenders’ market funding costs since the FLS’ introduction may have lessened banks’ incentives to use draw on the Scheme, and so the impact of incentives within it. Les mécanismes d'incitation au crédit aux PME dans le Funding for Lending Scheme : effet constaté à partir des données au niveau des banques au Royaume-Uni La présente étude examine l’effet des mécanismes d’incitation rassemblés dans le Funding for Lending Scheme (FLS) sur l’évolution des volumes de prêt des banques aux petites et moyennes entreprises (PME) britanniques. Le FLS a été lancé en juin 2012 par la Banque d’Angleterre et le Trésor britannique dans le but d’améliorer l’offre de crédit pour l’économie réelle au Royaume-Uni. Malgré le niveau généralement bas des taux d’intérêt sans risque à l’époque, les banques britanniques faisaient face à des coûts de financement élevés au moment de la mise en place du dispositif, et l’intention était d’ouvrir aux établissements prêteurs une source stable de financement à meilleur marché pour appuyer la fourniture de crédit à l’économie réelle. La conception du FLS intégrait des mécanismes directs d’incitation à soutenir l’économie réelle, qui liaient le prix et la quantité des ressources mises à la disposition des établissements aux volumes de prêts consentis par ces derniers. Cette étude vise à trouver des preuves de l’effet de ces mesures d’incitation, en s’attachant en particulier à leur impact après la redéfinition et l’extension du dispositif en avril 2013 pour mettre en évidence les évolutions de l’offre de crédit liées à la demande de crédit. La modification du dispositif intensifiait spécifiquement l’incitation à prêter aux PME par opposition aux grandes entreprises. Cette réorientation facilite l’utilisation d’une méthode d’estimation par différences de différences et la recherche, à partir des données par établissement pour les groupes bancaires britanniques, d’un effet direct des incitations sur l’offre de crédit, les grandes entreprises étant prises comme groupe de contrôle. L’ensemble de données disponible ne permet pas de déterminer que ce changement dans la structure des incitations du FLS a directement renforcé la croissance des prêts aux PME par rapport aux prêts aux grandes entreprises entre le moment de l’extension du dispositif et la fin de 2013. Ces résultats ne semblent pas varier même lorsque l’on utilise d’autres mesures de l’offre de crédit. Cependant, la série de données est inévitablement petite, tant par le nombre de prêteurs couverts que par la période examinée, après la réorientation ; et, plus généralement, la baisse répétée des coûts de financement sur le marché pour les prêteurs depuis la mise en place du FLS a pu amoindrir l’intérêt d’un recours au dispositif pour les banques et, partant, l'impact des mécanismes d'incitation qu'il contenait. |
| Keywords: | banks, monetary transmission, SME lending, unconventional monetary policy |
| JEL: | E51 G28 G21 |
| Date: | 2016–12–15 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:1365-en&r=eur |
| By: | Gerlagh, Reyer (Tilburg University, School of Economics and Management); Van Den Bijgaart, Inge (Tilburg University, School of Economics and Management); Nijland, Hans; Michielsen, Thomas (Tilburg University, School of Economics and Management) |
| Abstract: | To what extent have national fiscal policies contributed to the decarbonisation of newly sold passenger cars? We construct a simple model that generates predictions regarding the effect of fiscal policies on average CO2 emissions of new cars, and then test the model empirically. Our empirical strategy combines a diverse series of data. First, we use a large database of vehicle-specific taxes in 15 EU countries over 2001–2010 to construct a measure for the vehicle registration and annual road tax levels, and separately, for the CO2 sensitivity of these taxes. We find that for many countries the fiscal policies have become more sensitive to CO2 emissions of new cars. We then use these constructed measures to estimate the effect of fiscal policies on the CO2 emissions of the new car fleet. The increased CO2-sensitivity of registration taxes have reduced the CO2 emission intensity of the average new car by 1.3 %, partly through an induced increase of the share of diesel-fuelled cars by 6.5 percentage points. Higher fuel taxes lead to the purchase of more fuel efficient cars, but higher diesel fuel taxes also decrease the share of (more fuel efficient) diesel cars; higher annual road taxes have no or an adverse effect. |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:tiu:tiutis:1d2ea483-9adf-4875-9df0-1113bd1f2366&r=eur |
| By: | Lena Dräger (Johannes Gutenberg University Mainz) |
| Abstract: | Evaluating a new survey dataset of German consumers, we test whether individual consumption plans are formed according to an Euler equation derived from consumption life-cycle models. Estimating several consumption Euler equations, the results are mostly in line with the theory: We ?nd evidence of consumption smoothing, since individual current and planned spending are positively correlated. In addition, current spending is positively correlated with both quantitative and qualitative in?ation expectations, and negatively with quantitative nominal interest rate expectations. Overall, this results in a negative link between current spending and implied real interest rate expectations, where the weaker e?ect of nominal interest rate expectations might be due to the current zero-lower-bound environment. As expected, the e?ect of perceived real interest rates is most pronounced for consumers’ who are active on ?nancial markets. Finally, economic news on in?ation and ?nancial market developments observed by the consumer strengthen the e?ects of their interest rate and in?ation expectations on current spending. |
| Keywords: | Euler equation; consumers; macroeconomic expectations; consumption plans; survey micro data. |
| JEL: | D12 D14 D84 C83 |
| Date: | 2016–11–15 |
| URL: | http://d.repec.org/n?u=RePEc:jgu:wpaper:1621&r=eur |