nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2018‒01‒29
29 papers chosen by
Giuseppe Marotta
Università degli Studi di Modena e Reggio Emilia

  1. The Effect of Multigrade Classes on Cognitive and Non-Cognitive Skills: Causal Evidence Exploiting Minimum Class Size Rules in Italy By Checchi, Daniele; De Paola, Maria
  2. EU-wide income inequality in the era of the Great Recession By Peter, Benczur; Zsombor, Cseres-Gergely; Peter, Harasztosi
  3. Assessing how large is the market for prostitution in the European Union By Philippe Adair; Oksana Nezhyvenko
  4. The Impact of Energy Prices on Employment and Environmental Performance: Evidence from French Manufacturing Establishments By Giovanni Marin; Francesco Vona
  5. Labor markets and labor mobility in the French-German border region By Knörr, Marlene; Weber, Enzo
  6. Local market structure and consumer prices: Evidence from a retail merger By Rickert, Dennis; Schain, Jan Philip; Stiebale, Joel
  7. Firm heterogeneity and aggregate business services exports: micro evidence from Belgium, France, Germany and Spain By Andrea Ariu; Elena Biewen; Sven Blank; Guillaume Gaulier; María Jesús González; Philipp Meinen; Daniel Mirza; César Martín Machuca; Patry Tello
  8. How Immigrants Helped EU Labor Markets to Adjust during the Great Recession By Martin Kahanec
  9. Vintage effects in human capital: Europe versus the United States By Inklaar, Robert; Papakonstantinou, Maria Anna
  10. Regional Purchasing Groups and Hospital Medicine Prices: Evidence from Group Creations By Léa Toulemon
  11. Procurement Centralization in the EU: the Case of Italy By Decarolis, Francesco
  12. EXPORT AND PRODUCTIVITY IN GLOBAL VALUE CHAINS: COMPARATIVE EVIDENCE FROM LATVIA AND ESTONIA By Konstantins Benkovskis; Jaan Masso; Oleg Tkacevs; Priit Vahter; Naomitsu Yashiro
  13. Who Got the Brexit Blues? Using a Quasi-Experiment to Show the Effect of Brexit on Subjective Wellbeing in the UK By Powdthavee, Nattavudh; Plagnol, Anke C.; Frijters, Paul; Clark, Andrew E.
  14. Capturing industrial CO2 emissions in spain: infrastructures, costs and brek-even prices By Olivier Massol; Stéphane Tchung-Ming; Albert Banal-Estanol
  15. i-FRAME – Making sense of social policy innovation: A proposed approach to assess impacts of social investment in the EU By Gianluca Misuraca; Cristiano Codagnone; Giulio Pasi
  16. Neighbors' Income, Public Goods and Well-Being By Abel Brodeur; Sarah Flèche
  17. Heat or power: how to increase the use of energy wood at the lowest costs? By Vincent Bertrand; Sylvain Caurla; Elodie Le Cadre; Philippe Delacote
  18. Norms in bargaining: evidence from government formation in Spain By Thomas Fujiwara; Carlos Sanz
  19. Framing policy on low emissions vehicles in terms of economic gains: might the most straightforward gain be delivered by supply chain activity to support refuelling? By Alabi Oluwafisayo; Martin Smith; John Irvine; Karen Turner
  20. Can survey participation alter household saving behaviour? By Crossley, Thomas; de Bresser, Jochem; Delaney, L.; Winter, Joachim
  21. Three Generations of Intergenerational Transmission of Neighbourhood Context By Hedman, Lina; van Ham, Maarten; Tammaru, Tiit
  22. Should intra-familial time transfers be compensated financially? By Nataliya Kusa
  23. R&D and Innovation across Global Value Chains: Insights for EU Territorial Innovation Policy By Mafini Dosso; Lesley Potters; Alexander Tuebke
  24. Cyclicality of the R&D Share of Investment in the EU over the Period before and after the Crisis By Roberto Censolo; Caterina Colombo
  25. Impacts of the economic crisis on household transport expenditure and public transport policy: Evidence from the Spanish case By Rocío Cascajo; Lourdes Diaz Olvera; Andrés Monzon; Didier Plat; Jean-Baptiste Ray
  26. Clustering regional business cycles By M. D. Gadea-Rivas; Ana Gómez-Loscos; Eduardo Bandrés
  27. The effect of cultural environment on entrepreneurial decisions By Morales, Marina; Velilla, Jorge
  28. Subsidising mature age employment or throwing coins Into a wishing well: a quasi-experimental analysis By Paulino Font; Mario Izquierdo; Sergio Puente
  29. Do Company Builders Create Jobs? Examining the Rise of Incubation Finance in Germany By Scheuplein, Christoph; Kahl, Julian

  1. By: Checchi, Daniele (University of Milan); De Paola, Maria (University of Calabria)
    Abstract: We analyse how schooling in multigrade classes affect the formation of student cognitive and non-cognitive skills. Our identification strategy is based on some institutional features of the Italian educational system establishing a minimum number of students per class. Classes that do not reach the minimum number of pupils are organized in multigrade classes. In addition, the Italian law also establishes a maximum number of students for multigrade classes, leaving a narrow range in the number of students per class which is very similar to small class size in single grade classes when the number of students enrolled in the grade is just above the minimum number of students per class. Using census data on 5th grade Italian students, we find that pupils in multigrade classrooms obtain worse test scores both in literacy and numeracy standardized tests compared to comparable pupils in single grade classroom. While the effect is small and not always statistically significant for the literacy score, we find a large and highly statistically significant effect on the numeracy score. No effect is found on grades assigned by teachers. We also find that pupils placed in multigrade classes tend to have a more external centred locus of control. Our results are robust to different specifications including controls for class size and a number of student and school characteristics.
    Keywords: multigrade classes, mixed-age classes, cognitive skills, non-cognitive skills
    JEL: I21 I28 C36
    Date: 2017–12
  2. By: Peter, Benczur (European Commission – JRC); Zsombor, Cseres-Gergely (European Commission - JRC); Peter, Harasztosi (European Commission - JRC)
    Abstract: This paper uses European micro-data to look at stylised facts of EU-wide income inequality during the 2006-2013 period. Our contribution is to bring together four elements of the analysis that has appeared only in separation so far. Our analysis is EU-wide, but regionally detailed, looks at the longest possible term with harmonized survey data, uses inequality indicators sensitive to different parts of the income distribution and shows the contribution of different income components to income inequality. To our knowledge, this is the first attempt to produce stylised facts with these features at the same time, which, we believe is important in order to ask and answer questions related to the welfare of the people of the EU as a whole. We also take great care of rendering our work as homogeneous and transparent as possible. Because of this, we believe that the evidence we provide can be a starting point to a line of research on EU-wide income inequality.
    Keywords: income inequality; European Union
    JEL: D31 E24 H31 J31
    Date: 2017–12
  3. By: Philippe Adair (ERUDITE - Equipe de Recherche sur l’Utilisation des Données Individuelles en lien avec la Théorie Economique - UPEC UP12 - Université Paris-Est Créteil Val-de-Marne - Paris 12 - UPEM - Université Paris-Est Marne-la-Vallée); Oksana Nezhyvenko (ERUDITE - Equipe de Recherche sur l’Utilisation des Données Individuelles en lien avec la Théorie Economique - UPEC UP12 - Université Paris-Est Créteil Val-de-Marne - Paris 12 - UPEM - Université Paris-Est Marne-la-Vallée, UKMA - National University of Kyiv-Mohyla Academy)
    Abstract: Prostitution regimes in the EU-28 include prohibition, regulation and abolition; we tackle this typology from the perspective of both free sex work and forced labour, in order to gauge the magnitude of the European sex market as of 2010. We document the behaviour of customers on the demand-side for prostitution. Next, we address the supply-side, using HIV prevalence among sex workers to achieve a first series of two estimates. We design a second series of two estimates from miscellaneous sources (NGOS and the police). We investigate forced sexual labour trafficking, providing an additional series of estimates from the ILO and from Eurostat and UNODC. We check the magnitude of prostitution as regards employment figures and ranking with respect to the distribution of population in the EU countries. Thanks to an ordered probit, we test all five estimates; eventually, we come up with one best estimate (from HIV prevalence) that is also the lowest one.
    Keywords: sex work,victims of sexual exploitation trafficking,European Union,informal employment,ordered probit,prostitution
    Date: 2017
  4. By: Giovanni Marin (University of Urbino ‘Carlo Bo' and SEEDS); Francesco Vona (OFCE-SciencesPo and SKEMA Business School)
    Abstract: This paper evaluates the historical influence of energy prices on a series of measures of environmental and economic performance for a panel of French manufacturing establishments over the period 1997-2010. The focus on energy prices is motivated by the fact that changes in environmental and energy policies have been dominated by substantial reductions in discounts for large consumers, making the evaluation of each policy in isolation exceedingly difficult. To identify price effects, we construct a shift-share instrument that captures only the exogenous variation in establishment-specific energy prices. Our results highlight a trade-off between environmental and economic goals: although a 10 percent increase in energy prices brings about a 6 percent reduction in energy consumption and an 11 percent reduction in CO2 emissions, such an increase also has a modestly negative impact on employment (-2.6 percent) and very small impact on wages and productivity. The negative employment effects are mostly concentrated in energy-intensive and trade-exposed sectors. Simulating the effect of a carbon tax, we show that job losses for the most exposed sectors can be quite large. However, these effects are upper bounds and we show that they are significantly mitigated in multi-establishment firms by labor reallocation across establishments.
    Keywords: Energy Prices, Establishment Performance, Environmental and Energy Policy
    JEL: Q52 Q48 H23 D22
    Date: 2017–12
  5. By: Knörr, Marlene (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Weber, Enzo (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])
    Abstract: "This paper examines the cross-border labor market in the French-German Upper Rhine Region. Based on shortage analyses conducted for both sides of the border, a fixed effects panel regression estimates the impact of changing labor market situations on the number of French frontier workers. Although some of the anticipated effects are detected, their size is rather modest and insufficient to balance regional disparities in a way that would be expected in a fully integrated cross-border labor market. By the same token, the quantitative analysis identifies standardized certificates as a barrier to cross-border mobility and confirms a preference of frontier workers for routine tasks. In addition, insufficient public transportation and language skills, missing information about the neighboring country as well as problems with the recognition of degrees are also found among the obstacles to an integrated labor market." (Author's abstract, IAB-Doku) ((en))
    Keywords: Grenzpendler, Grenzgebiet, regionaler Arbeitsmarkt, regionale Disparität, regionale Mobilität, Mobilitätsbarriere, Bundesrepublik Deutschland, Frankreich, Hochrhein, Bundesrepublik Deutschland
    JEL: F22 J2 J61
    Date: 2018–01–08
  6. By: Rickert, Dennis; Schain, Jan Philip; Stiebale, Joel
    Abstract: This paper analyzes the effects of a merger between a German supermarket chain and a soft discounter on consumer prices. We exploit geographic variation in prices within retail chains and brands and use a difference-in-differences estimator to compare regional markets with a change in market structure to a control group in unaffected markets. Our results indicate that both insiders and outsiders raised average prices after the merger, particularly in regions with high expected change in retail concentration. In contrast, we estimate price declines in regions that did not experience a rise in concentration but were potentially affected by cost savings within the merged entity. We also provide evidence that remedies imposed by competition authorities were not sufficient to o set anti-competitive effects.
    Keywords: Mergers and Acquisitions,Ex-post Merger Evaluation,Retail Markets,RetailPrices,Competition
    JEL: D22 L11 L81 L66 K21
    Date: 2018
  7. By: Andrea Ariu (University of Geneva, Switzerland, Georgetown university, USA, and Crenos, Italy); Elena Biewen (Deutsche Bundesbank); Sven Blank (Deutsche Bundesbank); Guillaume Gaulier (Banque de France and CEPII); María Jesús González (Banco de España); Philipp Meinen (Deutsche Bundesbank); Daniel Mirza (University François Rabelais de Tours, LEO-CNRS (Orleans), Banque de France and CEPII); César Martín Machuca (Banco de España); Patry Tello (Banco de España)
    Abstract: This paper uses detailed micro data on service exports at the firm-destination-service level to analyse the role of firm heterogeneity in shaping aggregate service exports in Belgium, France, Germany and Spain from 2003 to 2007. We decompose the level and the growth of aggregate service exports into different trade margins paying special attention to firm heterogeneity within countries. We find that the weak export growth of France is at least partly due to poor performance by small exporters. By contrast, small exporters are the most dynamic contributors to the aggregate exports of Belgium, Germany and Spain. Our results highlight the importance of firm heterogeneity in understanding aggregate export growth.
    Keywords: service exports, firm heterogeneity, micro data panel
    JEL: F14
    Date: 2017–10
  8. By: Martin Kahanec
    Abstract: The economic literature starting with Borjas (2001) suggests that immigrants are more flexible than natives in responding to changing sectoral, occupational, and spatial shortages in the labor market. In this paper, we study the relative responsiveness to labor shortages by immigrants from various origins, skills and tenure in the country vis-à- vis the natives, and how it varied over the business cycle during the Great Recession. We show that immigrants in general have responded to changing labor shortages across EU member states, occupations and sectors more fluidly than natives. This effect is especially significant for low-skilled immigrants from the new member states or with the medium number of years since immigration, as well as with high-skilled immigrants with relatively few (1-5) or many (11+) years since migration. The relative responsiveness of some immigrant groups declined during the crisis years (those from Europe outside the EU or with eleven or more years since migration), whereas other groups of immigrants became particularly fluid during the Great Recession, such as those from new member states. Our results suggest immigrants may play an important role in labor adjustment during times of asymmetric economic shocks, and support the case for well-designed immigration policy and free movement of workers within the EU. Paper provides new insights into the functioning of the European Single Market and the roles various immigrant groups play for its stabilization through labor adjustment during times of uneven economic development across sectors, occupations, and countries.
    Keywords: immigrant worker, labor supply, skilled migration, labor shortage, wage regression, Great Recession
    JEL: J24 J61 J68
    Date: 2018–01–19
  9. By: Inklaar, Robert; Papakonstantinou, Maria Anna (Groningen University)
    Abstract: The standard assumption in growth accounting is that an hour worked by a worker of given type delivers a constant quantity of labor services over time. This assumption may be violated due to vintage effects, which were shown to be important in the United States since the early 1980s, leading to an underestimation of the growth of labor input (Bowlus and Robinson, 2012). We apply their method for identifying vintage effects to a comparison between the United States and six European countries. We find that vintage effects led to increases of labor services per hour worked by high-skilled workers in the United States and United Kingdom and decreases in Continental European countries between 1995 and 2005. Rather than productivity growth advantage of the US and UK, the primary difference with Continental European countries was human capital vintage effects instead.
    Date: 2017
  10. By: Léa Toulemon (Hospinnomics (PSE - AP-HP), PSE - Paris School of Economics, Assistance Publique - Hôpitaux de Paris - Assistance publique - Hôpitaux de Paris (AP-HP))
    Abstract: This paper estimates the impact of group purchasing on medicine prices in French hospitals, taking advantage of the entry of hospitals into regional purchasing groups between 2009 and 2014. This paper uses a new database providing the average annual prices paid for all innovative and costly medicines in public hospitals. Using a fixed effects model that controls for hospitals' medicine-specific bargaining abilities and medicine-specific price trends, I find that group purchasing reduces prices of medicines in oligopoly markets, but has no impact on the prices of medicines with no competitors.
    Keywords: hospital medicine prices,purchasing groups,bargaining ability
    Date: 2017–12–08
  11. By: Decarolis, Francesco
    Abstract: This paper analyzes the process of centralization of public procurement in Europe, with an emphasis on the Italian case. It illustrates the main normative and regulatory reforms that took place between 2000 and 2016 at both EU and Italian levels. It then empirically evaluates the potential distortions induced by the most recent wave of centralization reforms. Using procurement data on all Italian public contracts awarded between 2015 and 2017, it finds that administrations expecting to lose their ability to contract independently game the centralization requirements in three ways. In the short run, they anticipate their purchases to avoid delegating to a central body. In the longer run, they both manipulate contract values, breaking down purchases into smaller lots of amounts below the thresholds driving centralization requirements, and, when given the option, aggregate into the smallest types of centralized purchasing bodies. These three distortions partially offset the potential benefits of the centralization reforms.
    Keywords: Centralization; Procurement; Public Contracts
    JEL: D44 H57 K23 L22 L74
    Date: 2018–01
  12. By: Konstantins Benkovskis; Jaan Masso; Oleg Tkacevs; Priit Vahter; Naomitsu Yashiro
    Abstract: This paper investigates the effect of export entry on productivity, employment and wages of Latvian and Estonian firms in the context of global value chain (GVC). Like in many countries, exporting firms in Latvia and Estonia are more productive, larger, pay higher wages and are more capital intensive than non-exporting firms. While this is partly because firms that are originally more productive and have better performances are more likely to enter export, Latvian and Estonian firms also realise more than 23% and 14% higher labour productivity level as the result of export entry. Export entry also increases employment and average wages. Gains in productivity and employment are particularly large when firms enter exports that are related to participation in knowledge-intensive activities found in the upstream of GVC. For instance, Latvian firms that start exporting intermediate goods or non-transport services (which include knowledge intensive services) enjoy significantly higher productivity gains than those starting to export final goods or transport services. These findings underscore the importance of innovation policies that strengthen firms’ capabilities to supply highly differentiated knowledge-intensive goods and services to GVC.
    Keywords: productivity, global value chain, export, Latvia, Estonia
    JEL: F12 F14 O19 O57
    Date: 2018
  13. By: Powdthavee, Nattavudh (University of Warwick); Plagnol, Anke C. (City University London); Frijters, Paul (London School of Economics); Clark, Andrew E. (Paris School of Economics)
    Abstract: We use the 2015-2016 waves of the UK Household Longitudinal Study (Understanding Society) to look at subjective wellbeing around the time of the June 2016 EU membership Referendum in the UK (Brexit). We find that those reporting a preference for leaving the EU were 0.14 points less satisfied with life pre-referendum, with both misery (life satisfaction below 5) and job uncertainty significantly predicting the preference for a Leave vote. Post-referendum, those with leave preferences enjoyed a life satisfaction rise of 0.16 points, while there was a drop of 0.15 points for those preferring to remain. The initial positive subjective wellbeing effect of the Brexit vote was particularly pronounced for male and older respondents who reported a preference for leaving the EU. However, adaptation to the Brexit result appears to be complete three months after the EU Referendum date, both for those who preferred continued EU membership and those who did not.
    Keywords: life satisfaction, Brexit, United Kingdom, democracy
    JEL: I14 I30 I31
    Date: 2017–12
  14. By: Olivier Massol; Stéphane Tchung-Ming; Albert Banal-Estanol
    Abstract: This paper examines the conditions for the deployment of large scale pipeline and storage infrastructure needed for the capture of CO2 in Spain by 2040. It details a modeling framework that allows us to determine the optimal infrastructure needed to connect a geographically disaggregated set of emitting and storage clusters, along with the threshold CO2 values necessary to ensure that the considered emitters will make the necessary investment decisions. This framework is used to assess the relevance of various policy scenarios, including (i) the perimeter of the targeted emitters for a CCS uptake, and (ii) the relevance of constructing several regional networks instead of a single grid to account for the spatial characteristics of the Spanish peninsula. We find that three networks naturally emerge in the north, center and south of Spain. Moreover, the necessary CO2 break-even price critically depends on the presence of power stations in the capture perimeter. Policy implications of these findings concern the elaboration of relevant, pragmatic recommendations to envisage CCS deployment locally, focusing on emitters with lower substitution options toward low-carbon alternatives.
    Keywords: Carbon capture and storage, CO2 pipeline network, Break-even price for deployment
    Date: 2018
  15. By: Gianluca Misuraca (European Commission - JRC); Cristiano Codagnone; Giulio Pasi (European Commission - JRC)
    Abstract: The European Union aims to forge a better future for Europe through promoting activities that place social innovation at the core of future policies. In order to monitor the implementation of the Social Union a methodological framework to assess the impacts generated by social policy innovations which promote social investment is clearly needed. A proposal for developing such a methodological framework, named i-FRAME, has been advanced by JRC, with the objective to serve as a comprehensive and structured approach for conducting analysis of the economic and social returns on investments of social policy innovations. The i-FRAME may also act as a guide to gather insights into replicability and transferability of such social investment initiatives in the EU. This issue summarises the i-FRAME theoretical and methodological approach proposed, as well as the efforts conducted to validate and pilot test some of its operational components on a number of case studies and scenarios of use, with the help of external experts. An overview of some of the operational components suggested for the implementation of the final proposal for i-FRAME (V2.0) are then presented, together with the key elements that should be planned to develop a comprehensive i-FRAME Web-Platform and simulator for social impact assessment. Conclusions are then offered in terms of directions for future research, paving the way towards the i-FRAME (V3.0) and beyond.
    Keywords: Social Innovation, ICTs, complex systems, dynamic simulation, policy modelling, welfare reforms
    Date: 2017–11
  16. By: Abel Brodeur (Department of Economics, University of Ottawa, Ottawa, ON); Sarah Flèche (Aix-Marseille School of Economics, Marseille, France)
    Abstract: How does neighbors' income affect individual well-being? Our analysis is based on rich US local data from the Behavioral Risk Factor Surveillance System, which contains information on where respondents live and their self-reported well-being. We find that the effect of neighbors' income on individuals' self-reported well-being varies with the size of the neighborhood included. In smaller areas such as ZIP codes, we find a positive relationship between median income and individuals' life satisfaction, whereas it is the opposite at the county, MSA and state levels. We provide evidence that local public goods and local area characteristics such as unemployment, criminality and poverty rates drive the association between satisfaction and neighbors' income at the ZIP code level. The neighbors' income effects are mainly concentrated among poorer individuals and are as large as one-quarter the effect of own income on self-reported well-being.
    Keywords: neighbors' income, public goods, amenities, relative deprivation, well-being.
    JEL: C25 J01 R23
    Date: 2017
  17. By: Vincent Bertrand; Sylvain Caurla; Elodie Le Cadre; Philippe Delacote
    Abstract: We compute the optimal subsidy level to fuelwood consumption that makes it possible to achieve the French biomass energy consumption target. In this view, we model the competitions and trade-offs between the consumption of fuelwood for heat (FW-H) and the consumption of fuelwood for power generation (FW-E). To do so, we couple a forest sector model with an electricity simulation model and we test different scenarios combining FWH and FW-E that account for contrasted potential rise in carbon price and potential reduction in the number of nuclear plants. We assess the implications of these scenarios on (1) the budgetary costs for the Government, (2) the industrial wood producers’ profits, (3) the costs savings in power sector for the different scenarios tested and (4) the carbon balance. We show that the scenario with the highest carbon price and the lowest number of nuclear plants is the less expensive from a budgetary perspective. Indeed, when associated with a high carbon price, co-firing may increase FW-E demand with lower subsidy level, which enables reducing the cost of reaching the target. However, in this case, FW-E crowds-out part of FW-H which may cause political economy issues. From a carbon balance perspective, a FW-H only scenario better performs than any other scenario that combines FW-H and FW-E due to the relatively low emissions factors of alternative technologies for electricity generation, in particular nuclear energy.
    Keywords: Forestry sector, Bioenergy, Biomass-based electricity, Carbon pricing, Nuclear power
    Date: 2017
  18. By: Thomas Fujiwara (Princeton, CIFAR, and NBER); Carlos Sanz (Banco de España)
    Abstract: Theories of multilateral bargaining and coalition formation applied to legislatures predict that parties’ seat shares determine their bargaining power. We present findings that are difficult to reconcile with this prediction. We use data from 2,898 municipal Spanish elections in which two parties tie in the number of seats. The party with slightly more general election votes is substantially more likely to appoint the mayor (form the government). Since tied parties should, on average, have equal bargaining power, this identifies the effect of being the most voted due to a norm prescribing that “the most voted should form government.” The effect of being most voted is comparable in size to the effect of obtaining an additional seat. This norm binds behavior even when the second and third most voted parties can form a winning coalition that prefers the most voted not to appoint the mayor. Voters punish, in future elections, second most voted parties that appoint mayors, suggesting that they enforce the norm. We document a similar second-versus-third most voted effect and provide suggestive evidence of similar norms from 28 national European parliaments. A model where elections play a dual role (aggregating information and disciplining incumbents) and different equilibria (norms) can occur is consistent with our results and yields additional predictions.
    Keywords: keyword, bargaining, elections, government formation, political economy, regression discontinuity
    JEL: C7 D7 D9
    Date: 2017–11
  19. By: Alabi Oluwafisayo (International Public Policy Institute, University of Strathclyde); Martin Smith (St Andrews Centre for Advanced Materials, University of St Andrews); John Irvine (Barelett School of Environment, University College London); Karen Turner (International Public Policy Institute, University of Strathclyde)
    Abstract: A core theme of the UK Government’s new Industrial Strategy is exploiting opportunities for domestic supply chain development. This extends to a special ‘Automotive Sector Deal’ that focuses on the shift to low emissions vehicles (LEVs). Here attention is on electric vehicle and battery production and innovation. In this paper, we argue that a more straightforward gain in terms of framing policy around potential economic benefits may be made through supply chain activity to support refuelling of battery/hydrogen vehicles. We set this in the context of LEV refuelling supply chains potentially replicating the strength of domestic upstream linkages observed in the UK electricity and/or gas industries. We use input-output multiplier analysis to deconstruct and assess the structure of these supply chains relative to that of more import-intensive petrol and diesel supply. A crucial multiplier result is that for every £1million of spending on electricity (or gas), 8 full-time equivalent jobs are supported throughout the UK. This compares to less than 3 in the case of petrol/diesel supply. Moreover, the importance of service industries becomes apparent, with 67% of indirect and induced supply chain employment to support electricity generation being located in services industries. The comparable figure for GDP is 42%.
    Keywords: electric vehicles, input-output model, multipliers, value-added multiplier, employment multiplier, supply chain development
    JEL: C67 Q42 Q43 Q48 R48
    Date: 2018–01
  20. By: Crossley, Thomas; de Bresser, Jochem (Tilburg University, School of Economics and Management); Delaney, L.; Winter, Joachim
    Abstract: We document an effect of survey participation on household saving. Indentification comes from random assignment to modules within a population-representative internet panel. The saving measure is based on linked administrative wealth data. Households that responded to a detailed questionnaire on needs in retirement reduced their non-housing saving rate by 3.5 per- centage points, on a base of 1.5%. The survey may have acted as a salience shock, possibly with respect to reduced housing costs in retirement. Our findings present an important challenge to survey designers. They also add to the evidence of limited attention in household financial decision making.
    Date: 2017
  21. By: Hedman, Lina (Uppsala University); van Ham, Maarten (Delft University of Technology); Tammaru, Tiit (University of Tartu)
    Abstract: The literature on intergenerational contextual mobility has shown that neighbourhood status is partly "inherited" from parents to children where children who spend their childhood in deprived neighbourhoods are more likely to live in such neighbourhoods also as adults. It has been suggested that such transmission of neighbourhood status also is relevant from multiple generation approach. To our knowledge, however, this has only been confirmed by simulations and not empirical research. This study uses actual empirical data covering 25 years and the full Swedish population to investigate intergenerational similarities in neighbourhood status of three generations of Swedish women. Findings suggest that the neighbourhood environments of Swedish women are correlated with the neighbourhood statuses of their mothers and, to some extent, grandmothers. We also find an effect of distance where intergenerational transmission is stronger for those remaining close. Whereas women whose mothers and grandmothers live in high-income areas benefit from staying close, women whose mothers and grandmothers live in low-income areas do better if they live further away. These results are robust over two different analytical strategies – comparing neighbourhood status of the three generations at similar ages and at the same point in time – and two different spatial scales. We argue that the finding of such effects in (relatively egalitarian) Sweden implies that similar, and possibly stronger, patterns are likely to exist in other countries as well.
    Keywords: intergenerational transmission, neighbourhood, low-income neighbours, register data, Sweden
    JEL: I30 J60 R23
    Date: 2017–12
  22. By: Nataliya Kusa (University of Kassel)
    Abstract: This paper deals with social acceptance of applying the equity principle for intra-familial time transfers. Based on a representative survey among German citizens, the author provides empirical evidence on acceptance of financial compensation for different time transfers. Some 80% of the subjects stated that intra-familial long-term care should be compensated. At the same time, only 38% of subjects stated that grandparental childcare should be compensated: The majority accepts equity principle for intra-familial long-term care but not for grandparental childcare. Age has the strongest effect: subjects belonging to the old generation are more likely to accept the equity principle for informal long-term care as well as for grandparental childcare. Family valuation does not matter in any of the dimensions. It is puzzling that being a female by itself does not explain the differences in social acceptance even though females are much more actively involved in all types of time transfers.
    Keywords: intergenerational transfers, long-term care, grandparental childcare, citizens’ view, equity
    JEL: D31 D63 D64
    Date: 2018
  23. By: Mafini Dosso (European Commission - JRC); Lesley Potters (European Commission - JRC); Alexander Tuebke (European Commission - JRC)
    Abstract: * Firms organise innovation activities across a wider range of geographically dispersed and specialized units, as compared to previous decades. Moreover corporate innovation processes are broken up into ever finer stages and tasks at the global scale. * The global dispersion of R&D and innovation activities occurs at a higher pace and goes hand in hand with a stronger regional polarization. Yet, corporate R&D remains a domestic activity, although functional and industry-specific patterns can be observed. * The increased internationalisation of R&D and innovation activities does not imply the hollowing-out of domestic ones. Foreign innovation activities may actually support domestic increases in innovation. * The internal and external connections of national and regional systems matter for their innovation performance. The quality of the regional learning and innovation systems is important to attract "relevant activities or segments" of the GVC. On the other hand, better connecting regions to the global innovation networks is important for local growth and employment. * The extent to which firms co-locate production and innovation activities depends on industry, product and process-specificities. * Evidence is needed on how R&D and innovation activities are sliced and diced across GVCs, on how these global corporate dynamics interact with national and regional innovation systems and on how they impact on local growth and employment.
    Keywords: R&D, Innovation Policy, Industrial Policy, Innovation.
    Date: 2017–09
  24. By: Roberto Censolo; Caterina Colombo
    Abstract: In this paper we investigate the co-movements between the R&D share of total investment and GDP growth in different EU areas over the period 1999-2014. Our empirical analysis shows that only core countries display a common counter-cyclical mechanism leading to an increased share of R&D over prolonged downturns. The lack of any counter-cyclical pattern of R&D share over the evolution of GDP growth in periphery countries makes this area highly vulnerable to persistent recessions, with potentially harmful consequences for longer term growth. For recent EU members the evidence of R&D share pro-cyclicality should be evaluated in the light of the catching-up process still at work in this area. Our analysis suggests that any successful EU innovation policy should not disregard the potential divergence in R&D performance due to the dispersion of the counter-cyclical properties of the share of productivity enhancing activities in the different EU areas.
    Keywords: R&D investment; cyclicality; European Union; economic crisis
    JEL: O52 O30 E32
    Date: 2017–12–27
  25. By: Rocío Cascajo (Transyt - UPM - Universidad Politécnica de Madrid); Lourdes Diaz Olvera (LAET - Laboratoire Aménagement Économie Transports - UL2 - Université Lumière - Lyon 2 - ENTPE - École Nationale des Travaux Publics de l'État - CNRS - Centre National de la Recherche Scientifique); Andrés Monzon (Transyt - UPM - Universidad Politécnica de Madrid); Didier Plat (LAET - Laboratoire Aménagement Économie Transports - UL2 - Université Lumière - Lyon 2 - ENTPE - École Nationale des Travaux Publics de l'État - CNRS - Centre National de la Recherche Scientifique); Jean-Baptiste Ray (Movi'cité)
    Abstract: The objective of this paper is to assess the impacts of the economic crisis in Spain on the transport expenditure of households from 2006 to 2014 and how transport authorities reacted to cope with the decreasing public resources and transport demand. The approach is based on quantitative and qualitative sources of information: the Spanish Household Budget Survey and in-depth interviews with public transport policy makers from six metropolitan areas. Transport is one of the household expenditure items that is the most affected by the crisis. The average amount spent on transport fell to its lowest value in 2013, dropping by 37% in six years. The proportion of budget spent on transport was reduced by a majority of households, whatever the residential location or purchasing power, with the exception of the poorest. Households reacted promptly to the crisis by reducing their purchases of new cars; their spending on transport use was affected less significantly. Poor households or those living in low-density areas were least able to reduce their transport costs. To cope with the crisis, public transport authorities reduced transport supply and increased fares. They also implemented other measures to bring in extra income which had no impact on transport services. The research concludes that sustainability-oriented transport policies promoting public transport and the reduction of car dependency, together with sustainable land-use policies, may help to limit the household transport budget and the impacts of an economic crisis on mobility.
    Keywords: Household transport expenditure,Spanish case,Public transport policy,Economic crisis,Household transport
    Date: 2018
  26. By: M. D. Gadea-Rivas (UNIVERSITY OF ZARAGOZA); Ana Gómez-Loscos (Banco de España); Eduardo Bandrés (UNIVERSITY OF ZARAGOZA)
    Abstract: The aim of this paper is to show the usefulness of Finite Mixture Markov Models (FMMMs) for regional analysis. FMMMs combine clustering techniques and Markov Switching models, providing a powerful methodological framework to jointly obtain business cycle datings and clusters of regions that share similar business cycle characteristics. An illustration with European regional data shows the sound performance of the proposed method.
    Keywords: business cycles, clusters, regions, finite mixture Markov models
    JEL: C22 C32 E32 R11
    Date: 2017–12
  27. By: Morales, Marina; Velilla, Jorge
    Abstract: This paper empirically examines whether the cultural environment plays a role in entrepreneurial decisions in Europe, the United States, Canada, and Australia. To explore this issue, we use data from the Adult Population Survey (APS) of 2010 to 2015 provided by the Global Entrepreneurship Monitor (GEM). To calculate the cultural factor, we utilize data from the GEM National Expert Survey (NES) data and apply a probit model to measure the effect of culture based on an unobserved latent variable of satisfaction, measured through a dichotomous variable identifying entrepreneurs. Results show a positive and statistically significant relationship between the cultural factor and the individual choice of entrepreneurial activity, suggesting that cultural environment is important, especially in European and Mediterranean countries. Our findings are robust to the introduction of several country variables, and to the use of different subsamples. Further, they do not qualitatively depend on the age of individuals.
    Keywords: Entrepreneurship. Culture. Developed countries. GEM Data.
    JEL: L26
    Date: 2018–01–10
  28. By: Paulino Font (Banco de España); Mario Izquierdo (Banco de España); Sergio Puente (Banco de España)
    Abstract: This paper evaluates the effect that subsidies to employment maintenance have on the probability of mature age workers staying in the firm. Implementing a quasi-experimental design provided by changes in Spanish labour market regulations, we are able to estimate that subsidy removal had a small though significant impact on the workers’ firm attachment rate. Our results show that a 1 pp increase in the worker’s cost translates into a 0.11 pp increase in the cumulative probability of the worker separating from the firm in the next five months. This effect was mainly driven by workers with relatively less seniority in the firm, who present lower dismissal costs, and by workers in low-skill jobs, for which the wageproductivity gap seems to negatively evolve with age. In terms of cost-benefit analysis, we document that the previous higher rate of job maintenance was achieved at a disproportionate cost, and therefore the elimination of the subsidy resulted in Social Security efficiency gains.
    Keywords: deadweight loss, labour tax subsidy, labour demand, dismissal costs
    JEL: H21 H31 J23 J32
    Date: 2017–11
  29. By: Scheuplein, Christoph; Kahl, Julian
    Abstract: Over the past decade, new types of business incubation have been developed. One particularly prominent example is company builders, which use their own resources to build up companies, establishing numerous companies in a series. In doing so, this investor type facilitates internal and external business ideas. It offers a new or-ganizational solution that combines both the innovative capacity of founders and the financial resources of a large company with the desire for long-term employment and corporate affiliation. This article examines the economic impact of company builders in Germany compared with other venture capital (VC) investor types on the basis of employment trends in the portfolio companies from 2011 to 2015. It is shown that company builders promote more dynamic employment growth than do other types of investors. This finding suggests that this type of investor is particular-ly well positioned to take advantage of the institutional deficiency in the German VC market. The results are also discussed in the context of the growth of the Berlin-based VC and start-up ecosystem.
    Keywords: venture capital; company builder; incubation; employment; Germany
    JEL: G24 L22 M13 R12
    Date: 2017–11–15

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