nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2017‒04‒30
twenty-six papers chosen by
Giuseppe Marotta
Università degli Studi di Modena e Reggio Emilia

  1. Into the Great Wide Unknown: Untangling the Relationship between Childcare Service Use and In-Work Poverty By Wim Van Lancker; Jeroen Horemans
  2. Do Women in Highly Qualified Positions Face Higher Work-To-Family Conflicts in Germany than Men? By Anne Busch-Heizmann; Elke Holst
  3. A web tool-based equal gender pay analysis for a competitive Europe (equal pacE): Overview, elements and lessons learned By Hammermann, Andrea; Schmidt, Jörg; Stettes, Oliver; Behrmann, Frank; Lonnes, Felicia; Merk, Caroline
  4. The Happiness Function in Italian Cities By Cristina Bernini; Alessandro Tampieri
  5. A new measure of income poverty for Europe By DECERF Benoit; VAN DEN BOSCH Karel; GOEDEME Tim
  6. The Impact of In-Work Benefits on Employment and Poverty By Dieter Vandelannoote; Gerlinde Verbist
  7. Where Do Green Technologies Come From? Inventor Teams’ Recombinant Capabilities and the Creation of New Knowledge. By Orsatti, Gianluca; Pezzoni, Michele; Quatraro, Francesco
  8. Sources of Knowledge Used by Entrepreneurial Firms in the European High-Tech Sector By Amoroso, Sara; Audretsch, David; Link, Albert
  9. Individual Heterogeneity and Pension Choices: How to Communicate an Effective Message? By Giovanni Gallo; Costanza Torricelli; Arthur van Soest
  10. The Rent Impact of Disclosing Energy Performance Certificates: Energy Efficiency and Information Effects By Luisa Dressler; Elisabetta Cornago
  11. What Does It Mean To Live on the Poverty Threshold? Lessons From Reference Budgets By Tim Goedemé; Tess Penne; Tine Hufkens; Alexandros Karakitsios; Anikó Bernát; Bori Simonovits; Elena Carillo Alvarez; Eleni Kanavitsa; Irene Cussó Parcerisas; Jordi Riera Romaní; Lauri Mäkinen; Manos Matsaganis; Marco Arlotti; Marianna Kopasz; Péter Szivós; Veli-Matti Ritakallio; Yuri Kazepov; Karel Van den Bosch; Bérénice Storms
  12. The End of Cheap Talk About Poverty Reduction: The Cost of Closing the Poverty Gap While Maintaining Work Incentives By Diego Collado; Bea Cantillon; Karel Van den Bosch; Tim Goedemé; Dieter Vandelannoote
  13. What drives car use in Europe? By Focas Caralampo; Panayotis Christidis
  14. Wind Providing Balancing Reserves: An Application to the German Electricity System of 2025 By Casimir Lorenz; Clemens Gerbaulet
  15. Atypical Employment and In-Work Poverty: A Different Story for Part-Timers and Temporary Workers? By Jeroen Horemans
  16. The effects of financial education on financial literacy and savings behavior : Evidence from a controlled field experiment in Dutch primary schools By A.S. Kalwij; Rob Alessie; M. Dinkova; Gea Schonewille; Anna van der Schors; Minou van der Werf
  17. Structural inequality: The case of Sweden By Olof Robling; Jon Kristian Pareliussen
  18. A subregional space-time exploration of family change: Italian municipalities, 1991-2011 By Marcantonio Caltabiano; Emanuela Dreassi; Emilia Rocco; Daniele Vignoli
  19. Expenditure responses, policy interventions and heterogeneous welfare effects in Hungary during the 2000s By Zsombor Cseres-Gergely; Gyorgy Molnar; Tibor Szabo
  20. Can Raising Instructional Time Crowd Out Student Pro-Social Behaviour? Evidence From Germany By Christian Krekel
  21. X-efficiency and economies of scale in pension fund administration and investment By Gosse A.G. Alserda; J.A. Bikker; Fieke (S.G.) van der Lecq
  22. Towards an equitable and sustainable points system By SCHOKKAERT Erik; DEVOLDER Pierre; HINDRIKS Jean; VANDENBROUCKE Frank
  23. Smoking Ban and Health at Birth By Tamas Hajdu; Gabor Hajdu
  24. Free digital learning opportunities for migrants and refugees: an analysis of current initiatives and recommendation for their use By Elizabeth Colucci; Hanne Smidt; Axelle Devaux; Charalambos Vrasidas; Malaz Safarjalani; Jonatan Castaño Muñoz
  25. Regional labour market mobility. A network analysis of inter-firm relatedness By Shamnaaz B. Sufrauj; Giancarlo Corò; Mario Volpe
  26. The Rise of the Sharing Economy in Tourism: Exploring Airbnb Attributes for the Veneto Region By Jan Van der Borg; Nicola Camatti; Dario Bertocchi; Andrea Albarea

  1. By: Wim Van Lancker; Jeroen Horemans
    Abstract: In the literature on in-work poverty (IWP), childcare services are often assumed to be an effective policy instrument in reducing the number of working poor. However, such assumption has never been properly put to the test. This chapter provides, for the first time, empirical evidence on the role of childcare services in combating in-work poverty. First, a conceptual overview of the pathways through which childcare service use is expected to reduce in-work poverty. Second, a comprehensive overview of the literature on the employment effects of childcare use is provided. Third, drawing on the 2012 wave of the European Union Statistics on Income and Living Conditions (EU-SILC), the link between using formal childcare and IWP is examined at both the micro and the macro level. The results provide evidence for an aggregation paradox: there is no link between the level of formal childcare use and the IWP rate at the country level, while using childcare at the household level is related to a lower risk of being working poor. This can be explained by the fact that families using formal care are also families with higher levels of work intensity. Finally, we argue that the type of care matters much as we find that informal care arrangements are related to higher levels of IWP.
    Date: 2017–03
  2. By: Anne Busch-Heizmann; Elke Holst
    Abstract: Changing employment conditions lead to new chances, but also new risks for employees. In the literature, increasing permeability between occupational and private life is discussed as one special outcome of this development that employees must face, especially those in highly qualified positions. Drawing on existing research, we investigate in how far women and men in those positions differ in their perceived work-to-family conflicts (WFC), considering the mediating role of gender specific job opportunities. Referring conflicting theoretical arguments, we hypothesize that in Germany - as a conservative welfare state - women, especially those with family responsibilities, will perceive higher WFC than men in those positions. Our analysis is based on data from the German Socio-Economic Panel Study (SOEP). Using the Siegrist instrument on effort-reward imbalance we find that women in highly qualified positions perceive higher WFC than men. This association is explained by women’s lower willingness to take risks, and also party explained by lower job rewards women receive. It gets visible even more strongly if women’s lower time-based burdens in the job are controlled for. Mixed results are observed concerning associations between family responsibilities and WFC, which is in line with ambivalent results in the literature.
    Keywords: Work-to-family conflict, highly qualified positions, managers, gender, SOEP
    JEL: I3 B54 M1
    Date: 2017
  3. By: Hammermann, Andrea; Schmidt, Jörg; Stettes, Oliver; Behrmann, Frank; Lonnes, Felicia; Merk, Caroline
    Abstract: The project equal pacE aimed to provide and promote a web tool by which companies can voluntarily analyse their pay structures and detect a potentially existing gender pay gap and its causes. The equal pacE web tool has been made available in five languages: Dutch, English, Finnish, French, and Polish. Its use is free of charge. The equal pacE web tool is based on the well-established web tool Logib-D that has been funded by the German Federal Ministry for Family Affairs, Senior Citizens, Women and Youth. It was adjusted for the country-specific requirements in Flemish-Belgium and the Netherlands, as well as in Finland, France, Poland, and the United Kingdom.
    JEL: C20 J31 O15
    Date: 2016
  4. By: Cristina Bernini (University of Bologna); Alessandro Tampieri (University of Bologna and CREA, Université du Luxembourg)
    Abstract: We investigate how the city of residence influences subjective well-being. We build up a happiness function that considers city characteristics as determinants of well-being, and we combine individual and city level data through a multi-level analysis. We exploit the dataset HADL on Italian metropolitan area over the period 2010 to 2013. We find a strong variability across cities of the aspects of life that explain subjective well-being. Even accounting for a rich set of individual level variables, the location retains a role in shaping life satisfaction. Surprisingly, economic and familiar aspects explain happiness more at city level than at individual level.
    Keywords: Subjective well-being; happiness function; metropolitan area; multilevel models; city amenities.
    JEL: I31 R10
    Date: 2017
  5. By: DECERF Benoit (Université de Namur); VAN DEN BOSCH Karel (Universiteit Antwerpen); GOEDEME Tim (Universiteit Antwerpen)
    Abstract: In Europe poverty is usually measured with the at-risk-of-poverty indicator which defines the poverty threshold as 60 per cent of national median income. With this indicator, poverty seems to be lower in some ‘poor’ EU countries than in some of the richest EU Member States. Also, when the median income changes quickly, the evolution of poverty as shown by the indicator can be counterintuitive, for instance resulting in stagnation or even a decrease in poverty when median incomes fall and living conditions of the poor deteriorate. In this article we propose a new poverty indicator, the Poverty Gap Ratio with priority to the pan-European poor (PGR-PAN) which is not subject to these limitations. The indicator is based on two lines: a hybrid poverty line which increases with national average income and a pan-European poverty line which is fixed in real terms across time and across countries. We use reference budgets to identify a set of useful poverty thresholds. On the basis of EU-SILC data we show that our indicator results in results that are in better agreement with intuitive notions about poverty within the EU and captures more adequately changes as well as cross-national differences in living standards. Furthermore, we contend that the use of our indicator can lead to a more consistent evaluation of poverty in comparison with other indicators of poverty and social exclusion.
    Keywords: European Union, income poverty, inequality, pan-European poverty, PGR-PAN
    JEL: D63 I32
    Date: 2017–03–01
  6. By: Dieter Vandelannoote; Gerlinde Verbist
    Abstract: This article studies the impact of design characteristics of in-work benefits on employment and poverty in an international comparative setting, taking account of both first and second order effects. We use the microsimulation model EUROMOD, which has been enriched with a discrete labour supply model in order to take account of labour supply reactions. The analysis is performed for four EU-member states: Belgium, Italy, Poland and Sweden. The results show that design characteristics matter substantially, though the specific effects differ in magnitude across countries, indicating there is no one-size-fits-all solution. Throughout the analysis, numerous trade-offs are uncovered: not only between employment and poverty goals, but also within employment incentives itself (extensive vs. intensive margin). Taking account of behavioral reactions attenuates the impact on poverty outcomes, signaling the importance of bringing these effects into the empirical analysis.
    Date: 2017–02
  7. By: Orsatti, Gianluca; Pezzoni, Michele; Quatraro, Francesco (University of Turin)
    Abstract: By exploiting the EPO universe of patent data, we investigate how inventors’ teams recombinant capabilities drive the creation of Green Technologies (GTs).Results suggest the importance of recombinant creation patterns in fostering the generation of GTs. We also find diverse moderating effects of technological green experience and environmental regulation stringency on exploration behaviors. Precisely, the positive effect of team’s explorative behaviors is magnified for teams lacking technological green experience, even more in regimes of weak environmental regulation. Conversely, the effect of explorative behaviors is reduced for green experienced teams, especially in regimes of weak environmental regulation. Finally, we find positive effects of both team’s previous technological green experience and environmental regulation stringency.
    Date: 2017–03
  8. By: Amoroso, Sara (European Commission); Audretsch, David (Indiana University); Link, Albert (University of North Carolina at Greensboro, Department of Economics)
    Abstract: The purpose of this paper is to explore the relationship between an entrepreneur’s experience and education and his/her reliance on alternative sources of knowledge for exploring new business opportunities. The extant literature that is at the crossroads between sources of knowledge and the experiential and intellectual base of an entrepreneur (i.e., dimensions of his/her human capital) suggests that it is through experience and through education that an entrepreneur obtains knowledge. Using information on a sample of high-tech manufacturing firms across 10 European countries, we explore heterogeneities in the influence of experience, age, and education of the firm’s primary founder on the perceived importance of (i.e., use of) alternative sources of knowledge. We find that the association of these characteristics differs significantly across sources of knowledge, and across European regions. Education is positively related to the importance of knowledge from research institutes and internal know-how, while age is negatively related to the importance of research institutes and positively related to publications and conferences. On the one hand, in South/East European countries, the importance of internal know-how is positively associated with age and education, but negatively associated with experience. On the other hand, the characteristics of primary founders of North/West European firms are more linked to the importance of the participation to funded research programmes. This source of knowledge is related positively with age and education and negatively with experience.
    Keywords: Entrepreneurship; Knowledge; Experience; Education; Human Capital
    JEL: D83 J24 L26
    Date: 2017–04–25
  9. By: Giovanni Gallo; Costanza Torricelli; Arthur van Soest
    Abstract: We use the Elaboration Likelihood Model (ELM) to explain how communication influences pension choices in a heterogeneous population. We exploit the 2007 Italian reform that allowed transferring future severance pay contributions into a pension fund and was accompanied by an information campaign with a clear message. According to ELM, individuals follow either a “central route” or a “peripheral route” depending on their motivation and ability to process, and eventually change or retain their initial attitude. Based on data from the Bank of Italy Survey on Household Income and Wealth, we find that not only financial literacy plays a relevant role in the employees’ elaboration process, but also the individual’s comprehension of the specific choice object, the personal relevance of the decision, cognitive skills, and contextual elements (e.g. unions, employer pressure). These considerations have policy implications for the effectiveness of information messages in the pension domain.
    Keywords: pension choices, Elaboration Likelihood Model, cognitive skills, contextual elements,financial literacy
    JEL: A12 C25 D03 D14
    Date: 2017–04
  10. By: Luisa Dressler; Elisabetta Cornago
    Abstract: Energy performance certificates (EPC) can help solve information asymmetries between landlords and tenants about dwellings’ energy performance. EPCs may enable rent premiums for energy efficient dwellings, incentivizing energy efficiency investment in rental property. However, low EPC disclosure rates may undermine their potential to promote investment. Using a cross-sectional dataset of residential rental advertisements from Brussels, we estimate rent premiums from EPCs under de facto voluntary EPC disclosure. We use the Heckman correction and an instrumental variable approach to tackle potential selection bias and endogeneity. First, we find that highly energy-efficient compared to inefficient dwellings earn a rent premium, provided that EPCs are disclosed (energy efficiency effect). This premium may incentivize investment in energy efficiency of rental property. Second, dwellings with average energy performance are penalized from disclosing an EPC (information effect). This may provide a strategic motivation to hide EPCs that indicate mediocre energy performance.
    Keywords: asymmetric information; voluntary information disclosure; energy performance certificates; energy efficiency
    JEL: C21 D82 Q48 R31
    Date: 2017–04
  11. By: Tim Goedemé; Tess Penne; Tine Hufkens; Alexandros Karakitsios; Anikó Bernát; Bori Simonovits; Elena Carillo Alvarez; Eleni Kanavitsa; Irene Cussó Parcerisas; Jordi Riera Romaní; Lauri Mäkinen; Manos Matsaganis; Marco Arlotti; Marianna Kopasz; Péter Szivós; Veli-Matti Ritakallio; Yuri Kazepov; Karel Van den Bosch; Bérénice Storms
    Abstract: Over the past 20 years the use of the at-risk-of-poverty threshold has become increasingly widespread. However, as is well known, the indicator builds on a number of assumptions and simplifications that have given rise to several criticisms. In this paper we illustrate how reference budgets can help to ‘contextualise’ the weaknesses of the at-risk-of-poverty threshold by generating more insight into the kind of living standard that can be afforded with an income at the level of the threshold in different countries. This provides essential background information for those using the indicator. More in particular, we make use of the first effort to construct cross-country comparable reference budgets in Europe to show what the strong cross-national differences in living standards imply in practice for the adequacy of incomes at the level of the at-risk-of-poverty threshold. The budgets show that in the poorest EU Member States, even adequate food and housing are barely affordable at the level of the threshold, whereas a decent living standard is much more in reach for those living on the threshold in the richer EU Member States. The reference budgets also suggest that the poverty risk of some groups (for instance children) is underestimated relative to that of other age groups, while the poverty risk of homeowners is probably relatively overestimated.
    Date: 2017–04
  12. By: Diego Collado; Bea Cantillon; Karel Van den Bosch; Tim Goedemé; Dieter Vandelannoote
    Abstract: How can poverty reduction be improved and at what cost? Available evidence suggests that social investment strategies and employment policies are important but not sufficient. In order to reduce the number of people below the relative at-risk-of-poverty threshold of the EU, countries must develop not only effective employment policies but also ensure adequate social protection. This implies increasing social transfers for working and non-working households, while protecting work incentives. In this paper we show that this is not a cheap option. We calculate the hypothetical cost of closing the poverty gap while maintaining the existing average labour market participation incentives at the bottom of the income distribution. We do it in three of the most developed welfares states of the EU, representing different welfare regimes, namely Belgium, Denmark and the United Kingdom. Results show that this would require around two times the budget needed to just lift all disposable household incomes to the poverty threshold. The cost would obviously be lower in countries with smaller poverty gaps and with weaker participation incentives. Furthermore, the results suggest that for anti-poverty strategies to be effective other factors should be considered more carefully, including the drivers of rising inequalities in market incomes, and especially the downward pressures on low wages, as well as the most appropriate magnitude of financial work incentives.
    Date: 2017–04
  13. By: Focas Caralampo (University of Oxford); Panayotis Christidis (European Commission – JRC)
    Abstract: The methodology is based on the results of a recent EU-wide travel survey that maps user preferences and on the application of a Random Forest classification model that explains the interaction of the main variables that affect these choices. The results of the analysis suggest that it is probably too early to assume that car travel demand is close to a peak throughout Europe. It would be more accurate to claim that a plateau has been reached in a few EU Member States with a developed economy, high car ownership rates and slowly changing demographic profiles. Evidence shows that in some of these countries car use has peaked. However, significant growth in car use should be expected in Eastern Europe. The trends concerning the use of passenger cars are certainly not uniform across the EU since each Member State has its own socio-economic conditions and follows a different path as regards car dependency. In addition, some of the indications of changes in trends can be circumstantial or temporary, as for example the impacts that the economic crisis may have on car ownership and use. Others are long term and perhaps not clearly visible yet. The changing structure of the economy, the longer periods of education for the young, the more fragmented and deregulated labour market and the changing cultural values (i.e. the high value of digital connectivity) may be gradually changing the role of the car in the society in the long term, but there is still not sufficient evidence to suggest that they already are having an impact throughout Europe. Part of the impact of the factors analysed here may simply be the result of postponing decisions related to car use. However, even postponement alters the total level of demand, for if one age group now makes fewer trips than it did before, it lowers the overall level of demand. Evidence also shows that the young groups who are now postponing driving a car do not reach the levels of car use in their 30s and 40s that the generation before had. Some who postpone using the car will forever abandon car driving.
    Keywords: Transport economics, transport policy, mobility, car use, passenger
    JEL: R40 R41 R49
    Date: 2017–04
  14. By: Casimir Lorenz; Clemens Gerbaulet
    Abstract: This paper analyzes the influence of wind turbines as new participants on prices and allocation within balancing markets. We introduce the cost-minimizing electricity sector model ELMOD-MIP, that includes detailed unit-commitment constraints, complex combined heat and power constraints, and minimum bid sizes for balancing capacity reservation. The model also features a novel approach of modeling balancing reservation by considering possible activation costs already during the reservation phase, mimicking the activation anticipation of market participants. The model includes the spot and balancing market of Germany and is applied to scenarios for 2013 and 2025. The results for 2025 show, in comparison to 2013, a price increase for positive and negative reserves, in case no new participants enter the market. With the participation of wind turbines the cost for balancing provision is reduced by 40%, but above 2013 values. The relative cost savings from wind participation are higher for negative reserve provision than positive reserve provision, as wind turbines can use their full capacity if not activated and do not have to be curtailed ex ante. The participation of wind turbines especially reduces the occurrence of peak prices for positive and negative reserves in 2025. This reduction effect occurs even with a relatively low share where wind turbines participate with only five percent of their capacity. Therefore, further fostering the process of allowing wind turbines to participate in the German reserve market seems favorable.
    Keywords: balancing reserves, electricity sector modeling, power plant dispatch, wind participation
    JEL: Q42 Q47 Q48 C61 L94
    Date: 2017
  15. By: Jeroen Horemans
    Abstract: Both part-time and temporary employment have been shown to be associated with particular high poverty rates across Europe. Yet, theoretical arguments as to why this is the case remain scarce. Given the multifaceted nature of in-work poverty, the main aim of this chapter is unravel the different mechanisms that either cause or potentially limit the poverty risk of both groups of atypical workers. The results indicate that both groups are unable to secure a decent income to maintain themselves, not to mention their inability to sustain a family. However, their poverty risk remains remarkably limited when we take all income sources into account. We find that temporary and part-time workers tend to be protected against poverty differently. Government transfers are particularly important for temporary workers as they partially compensate periods out of work. Part-timers are more likely to rely on the earnings of other household members to avoid poverty, but with important differences across countries.
    Keywords: atypical employment, in-work poverty
    Date: 2017–01
  16. By: A.S. Kalwij; Rob Alessie; M. Dinkova; Gea Schonewille; Anna van der Schors; Minou van der Werf
    Abstract: In this paper, we report the results of a controlled field experiment designed to estimate the short-term effects of a 45-minute financial education program on financial literacy and savings behavior in Dutch primary schools. Among fifth and sixth graders, the program led to a pre- to posttest improvement in financial literacy on almost one out of eight questions, with about one-third of the increase in correctness attributable to the program. It also raised the savings probability for fifth graders by seven percentage point but generated no significant increase for sixth graders. Overall, the program appears to have been mainly effective for the questions explicitly addressed in its content. We also note that the significant program effects appear to be driven by the result for girls; however, we cannot reject homogeneous treatment effects with respect to gender.
    Keywords: Education, treatment effects, panel data models
    Date: 2017–02
  17. By: Olof Robling; Jon Kristian Pareliussen (OECD)
    Abstract: Structural trends not directly related to labour market functioning and redistribution have made a sizeable contribution to inequality and poverty in Sweden, but occupy only limited space in the income inequality debate. To fill this gap, we put a quarter of a century of rising inequality in Sweden in a new perspective by quantifying the effect of changing household composition, age structure, industry structure, educational attainment and immigration on inequality. The influence of structural changes on inequality is derived from micro-data from Statistics Sweden. We re-weigh subgroups of the population with certain characteristics by their population shares in 1987 to construct counterfactual income distributions for 2013 and derive inequality measures that we compare to their actual 2013 values. We find that almost half of the inequality increase between 1987 and 2013 can be mechanically ascribed to these factors.
    Keywords: demographics, immigration, Income distribution, poverty, structural trends
    JEL: D31 I24 I32 J11 J12 J14 J15 L16
    Date: 2017–04–22
  18. By: Marcantonio Caltabiano (Dipartimento di Economia, Università di Messina); Emanuela Dreassi (Dipartimento di Statistica, Informatica, Applicazioni "G. Parenti", Università di Firenze); Emilia Rocco (Dipartimento di Statistica, Informatica, Applicazioni "G. Parenti", Università di Firenze); Daniele Vignoli (Dipartimento di Statistica, Informatica, Applicazioni "G. Parenti", Università di Firenze)
    Abstract: This paper posits that the municipality level offers important insights into the study of temporal and spatial patterns of family change. We focus on the diffusion of one-parent families in Italy: variation in the structure of co-resident domestic groups is a crucial indicator of changing diversity in family patterns. We apply a hierarchical Bayesian spatio-temporal model to the data of the last three Italian Population Censuses, at the municipality level. Our results show substantial sub-regional and sub-provincial heterogeneities in the spatial organization of family systems. These patterns might have gone undetected if larger territorial units of analysis had been considered.
    Keywords: Family change; one-parent families; municipality level; Bayesian spatio-temporal model; Italy
    JEL: J12 J13 C33
    Date: 2017–04
  19. By: Zsombor Cseres-Gergely (European Commission, Joint Research Centre and research fellow at Institute of Economics, Centre for Economic and Regional Studies of the Hungarian Academy of Sciences); Gyorgy Molnar (Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences); Tibor Szabo (Credit Risk Modeler at Raiffeisen Bank)
    Abstract: VAT rates have changed multiple times and to a relatively great extent in Hungary during the past years. We use the resulting price changes in estimating the price- and income-elasticity of households’ expenditures. As a novelty, we introduce an interaction term in estimating the demand system and show that the own price elasticity of food is increasing with increasing production for own consumption. Based on the estimation results, we compute the average welfare effect of the changes and describe also its heterogeneity within the population. We find that the VAT-reforms in 2006 and 2009 have both decreased the welfare of those in the first income quintile. We also look at the welfare effect of multiple hypothetic reforms such as the decrease of the VAT rate of food and a decrease of utility prices as well as a subsidy to production for own consumption. We find that the best targeted measure is an income-transfer to the low-income unemployed either directly or through participation in the public works scheme.
    Keywords: QUAIDS model, household expenditures, consumer behaviour, compensating variation, simulation, welfare effect, production for own consumption
    JEL: D12 H20 H31
    Date: 2017–01
  20. By: Christian Krekel
    Abstract: We study whether raising instructional time can crowd out student pro-social behaviour. To this end, we exploit a large educational reform in Germany that has raised weekly instructional time for high school students by 12.5% as a quasi-natural experiment. We find that this rise has a negative and sizeable effect on volunteering, both at the intensive and at the extensive margin. It also affects political interest. There is no similar crowding out of scholastic involvement, but no substitution either. We conclude that instructional time plays an important role in shaping student pro-social behaviour.
    Keywords: Instructional time, student pro-social behaviour, volunteering, scholastic involvement, political interest, quasi-natural experiment, "G8" Reform, SOEP
    Date: 2017
  21. By: Gosse A.G. Alserda; J.A. Bikker; Fieke (S.G.) van der Lecq
    Abstract: Pension funds’ operating costs come at the cost of benefits, so it is crucial for pension funds to operate at the lowest cost possible. In practice, we observe substantial differences in costs per member for Dutch pension funds, both across and within size classes. This paper discusses scale inefficiency and X-inefficiency using various approaches and models, based on a unique supervisory data set, which distinguishes between administrative and investment costs. Our estimates show large economies of scale for pension fund administrations, but modest diseconomies of scale for investment activities. We also found that many pension funds have substantial X-inefficiencies for both administrative and investment activities. The two kinds of inefficiency differ across types of pension funds. Therefore, most pension funds should be able to improve their cost performance, and hence increase pension benefits
    Keywords: Efficiency, operating costs, cost elasticity, stochastic cost frontier analysis, optimal scale
    Date: 2017–02
  22. By: SCHOKKAERT Erik (KU Leuven and CORE); DEVOLDER Pierre (Université catholique de Louvain, ISBA, Belgium); HINDRIKS Jean (Université catholique de Louvain, CORE, Belgium); VANDENBROUCKE Frank (Universiteit Amsterdam)
    Abstract: We describe the points system that has been proosed by the Belgian Commission for Pension Reform 2020-2040. Intragenerational equity can be realised in a flexible and transparent way through the allocation of points within a cohort. The intergenerational distribution is determined by fixing the value of a point for the newly retired and a sustainability parameter for the actual retirees. The value of the point links future pensions to the future average living standard of the populuation in employment. This implies that credible promises can be made to the younger contributing generations. To keep the system economically sustainable, we propose an automatic adjustment mechanism, in which a key role is played by the career length. This adjustment mechanism implements the Musgrave rule by stating that the ratio of pensions over labour earnings net of pension contributions should remain constant. This induces a balanced distribution of the burden of demographic and economic shocks oveor the different cohorts and canbe seen as a transparent mechanism of intergenerational risk sharing.
    Keywords: retirement; pension reform, Musgrave rule; intergenerational risk sharing
    JEL: H55 I38 J18 J26
    Date: 2017–02–27
  23. By: Tamas Hajdu (Institute of Economics, Research Centre for Economic and Regional Studies, Hungarian Academy of Sciences); Gabor Hajdu (Institute for Sociology, Centre for Social Sciences, Hungarian Academy of Sciences and MTA-ELTE Peripato Comparative Social Dynamics Research Group, Hungary)
    Abstract: In 2012, smoking restrictions were extended to hospitality venues in Hungary. Women working in bars and restaurants were primarily affected by the intervention. In this research, we analyze the effect of this smoking ban on the outcomes of their intended pregnancies. Using complete individual live birth, fetal loss (miscarriage, stillbirth), and infant mortality registry data, we examine the probability of live birth, indicators of health at birth, and the probability of death in the first year of life. We perform a difference-in-differences estimation and show that the smoking ban has improved health at birth of the newborns of mothers working in bars and restaurants and has reduced infant mortality among them. Performing a series of robustness tests, we provide evidence that strongly supports the causal interpretation of our results. We also show that the ban was more beneficial for newborns of parents with low educational attainment and with lower fetal health endowments.
    Keywords: smoking ban, policy evaluation, health at birth
    JEL: I18 J13
    Date: 2017–02
  24. By: Elizabeth Colucci (European University Association); Hanne Smidt (European University Association); Axelle Devaux (RAND Europe); Charalambos Vrasidas (Centre for the Advancement of Research and Development in Educational Technology (CARDET)); Malaz Safarjalani; Jonatan Castaño Muñoz (European Commission – JRC)
    Abstract: The final report of MOOCs4inclusion, designed and financed by the Joint Research Center of the European Commission, summarises the research conducted for a five-month study (July-December 2016) on the efficiency and efficacy of free digital learning (FDL) offers for the integration, inclusion and further learning of migrants and refugees in Europe and in neighbourhood regions in conflict. Drawing from a literature review, focus groups with migrant/refugees (third country nationals in Europe) and interviews with representatives of selected FDL initiatives, the report assesses the success factors and limitations of FDL and draws conclusions for enhancing its efficiency and efficacy. The report also proposes a categorisation of FDL offers according to their design and purposes. Emphasis is placed on initiatives that take a ‘blended’ (online and face-to-face) and ‘facilitated’ (support services and mentoring) approach, as this was found to be optimal by both users of FDL and providers. General recommendations are provided for how the European Union and other interested actors can invest in this field, enhance synergies and design effective and efficient FDL offers for migrants/refugees in the future.
    Keywords: migration, refugees, open education MOOCs, free digital learning, e-learning
    Date: 2017–04
  25. By: Shamnaaz B. Sufrauj (Department of Economics, University Of Venice Cà Foscari); Giancarlo Corò (Economics, Languages and Entrepreneurship, University Of Venice Cà Foscari); Mario Volpe (Department of Economics, University Of Venice Cà Foscari)
    Abstract: Labour market rigidity is known to hamper the proper adjustment of an economy, thus, making it less resilient to shocks. This paper investigates the characteristics and resilience of the regional labour flow network in Veneto, a region famous for its industrial districts and the expertise of its workforce. A unique database of inter-firm worker mobility is used and the made-in-Italy relatedness to other industries is quantified. Descriptive results suggest that permanent-contract workers are more mobile within-sector than fixed-term contractors. The latter are more mobile across sectors. A finer disaggregation of the made-in-Italy industries shows that textile, food and woodwork are highly related to leisure-retail, logistics-wholesale and agriculture. These results can orient policy-making in getting faster labour reallocation. Network analysis establishes a number of stylised facts about labour flow networks, in particular, a hierarchical organisation of flows and a preference for workers to move from low-connected to high-connected firms and vice-versa, i.e. disassortativity. Unlike previous research, this paper identifies clusters of a non-spatial nature, that are, based on the intensity of labour flows. Regression analysis shows that labour mobility, both in and out, is beneficial for firms. However, being located inside labour clusters negatively affects firm performance. Interestingly, when these clusters include MNEs, they benefit. These results combined suggest that variety of connections prevails over standardisation.
    Keywords: Labour mobility, network analysis, skill-relatedness cross-industry linkages
    JEL: J24 J62 L14 R23 F23
    Date: 2017
  26. By: Jan Van der Borg (Department of Economics, University Of Venice Cà Foscari, and KU Leuven); Nicola Camatti (Department of Economics, University Of Venice Cà Foscari); Dario Bertocchi (IUAV University of Venice); Andrea Albarea (Department of Economics, University Of Venice Cà Foscari)
    Abstract: In just a couple of years, the sharing economy grew out to become a significant segment of the holiday accommodation market. Online peer-to-peer marketplaces allow people to offer rooms or entire houses to tourists, with Airbnb being the biggest and most famous example. This paper aims to give an insight into explaining which factors and attributes influence the success of Airbnb accommodations in the Veneto Region, using occupancy as a proxy. We analysed characteristics of 19624 Airbnb accommodations. The logistic regression model identifies a number of influential attributes which can be divided between locational characteristics, being located in attractive tourism destinations, and accommodation characteristics, for example the price, rating, number of previous bookings and the status of the host. The quantitative analysis allows to create an attractiveness scale, which is analysed for geographic patterns.
    Keywords: sharing economy, peer-to-peer marketplaces, Airbnb, attractiveness, tourism policy
    JEL: L83 O18 R58
    Date: 2017

This nep-eur issue is ©2017 by Giuseppe Marotta. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.