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on Microeconomic European Issues |
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Issue of 2018‒12‒03
23 papers chosen by Giuseppe Marotta Università degli Studi di Modena e Reggio Emilia |
| By: | Irene Brunetti; Lorenzo Corsini |
| Abstract: | Youth unemployment is a major problem that the economic systems face. Given this issue, we assess whether school-to-work transition is easier for individuals with secondary vocational education with respect to general secondary education. We want to explore which vocational systems across Europe produce better effects. We use data from a module on "Entry of young people into the labour market" from the 2009 European Labour Survey and we estimate a multinomial probit models allowing for violation of the irrelevance of the alternative assumption. We find that in countries with the dual vocational system, vocational education improves employability whereas in countries with school-based vocational system results are mixed and only in some cases they are significantly positive. We provide policy implications showing that vocational systems can improve school-to-work transitions and that the dual vocational structure appears to be an effective system. Given the relevance of youth unemployment, we provide valuable information on how to mitigate this problem. The use of cross-country comparisons offers great insights on which vocational systems appear to be well-suited to enhance employability. |
| Keywords: | Vocational education; school-to-work transition; multinomial probit |
| JEL: | I21 J24 |
| Date: | 2018–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:pie:dsedps:2018/233&r=eur |
| By: | Sebastian Leitner (The Vienna Institute for International Economic Studies, wiiw) |
| Abstract: | The Effect of Inheritance and Gifts on Household Net Wealth Distribution Analysed by Applying the Shapley Value Approach to Decomposition This paper analyses how microeconomic factors drive inequality in household wealth across nine European countries when applying the Shapley value approach to decomposition. The research draws on micro data from the Eurosystem Household Finance and Consumption Survey 2014. Disparity in inheritance and gifts obtained by households are found to have a considerable effect on wealth inequality that is on average stronger than that of income differences and other factors. In Austria, Germany, France, Portugal and Spain, the contribution of real and financial assets received as bequests or inter vivos transfers attains more than 30% to explained wealth inequality. The distribution of household characteristics (age, education, size, number of adults and children in the household, marital status) within countries however also shapes the observed wealth dispersion. The results resemble those obtained in a similar study (Leitner, 2016) based on data from the first wave of the Eurosystem Household Finance and Consumption Survey (HFCS 2010). |
| Keywords: | inequality, wealth distribution, decomposition analysis, inheritance, inter vivos transfers, income distribution, Europe |
| JEL: | D31 D63 O52 O57 |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:wii:wpaper:155&r=eur |
| By: | Fumarco, Luca; Baert, Stijn |
| Abstract: | We contribute to the literature on relative age effects on pupils’ (non-cognitive) skills formation by studying students’ social network. We investigate data on European adolescents from the Health Behaviour in School Aged Children survey and use an instrumental variables approach to account for endogeneity of relative age while controlling for confounders, namely absolute age, season-of-birth, and family socio-economic status. We find robust evidence that suggests the existence of a substitution effect: the youngest students within a class e-communicate more frequently than relatively older classmates but have fewer friends and meet with them less frequently. |
| Keywords: | Relative age,adolescents,education,Europe,social network |
| JEL: | I21 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:277&r=eur |
| By: | Balogh, J.M. |
| Abstract: | In recent decades, New World has increased their wine export to European markets and became considerable market players. Therefore, it is important to investigate whether the major New World wine producers are able to exploit its market power at the Old World s markets. The paper investigates the pricing behavior of major New World wine exporters in their most significant European destination markets using a pricing-to-market (PTM) model in respect of asymmetric effect of exchange rate changes between 2000 and 2016. First, the results suggest that Chile was able to apply price discrimination across Danish, German, Dutch, the UK wine markets. Second, South Africa set their prices in Belgian, Dutch and Swedish markets while the USA discriminated their wine prices in Denmark and Sweden. In contrast, this advantage was not observable in a case of Argentina, Australia. Third, the local-currency price stability was explored in case of Belgium, the Czech Republic and France (Chilean wine prices), Denmark, Germany (South African wine prices) and Germany, UK (US wine prices). Furthermore, the analysis of the asymmetric effects of exchange rates suggests that depreciation of the exporter s currency relative to the Euro had not a significant impact on wine import prices. Acknowledgement : |
| Keywords: | Demand and Price Analysis |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iaae18:276995&r=eur |
| By: | Petr Janský; Marek Šedivý |
| Abstract: | Regional differences in prices levels are substantial in many countries, but little is known about how important they are for income inequality and relative poverty. To bridge this gap, we provide new evidence on the basis of the best available data and a novel two-step approach. First, we collect the largest cross-country dataset of regional price level estimates from 12 countries and use it to predict regional price levels in other countries. We then combine all these regional prices levels with household-level data from the Luxembourg Income Study, which gives us results for a final sample of 21 countries. We find that for some countries Gini coefficients and headcount poverty ratios are statistically significantly different when adjusted for regional price levels. For example, we show that adjusting for regional price levels would lower the Gini coefficients by 2% for Italy, 3% for Columbia and by 4% for Georgia, while it would increase the headcount poverty ratio by 6% for France and by 7% for Ireland. We conclude that regional price levels affect income inequality to a varying extent and should be taken into account by policy makers and in future research. |
| JEL: | O18 R11 R58 |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:lis:liswps:752&r=eur |
| By: | Lucie Kureková (University of Economics, Prague) |
| Abstract: | Certainly, the spatial distribution of economic activities is far from uniform in many countries European Union and significant differences at national and at regional level are still persistent. The aim of this study is to investigate and compare regional disparities in member states of European Union and estimate the effect of regional migration flows on convergence of regions. This study focuses on income and employment, these two factors are considered as major determinants of migration and on the contrary, migration can contribute to reducing income and employment disparity between regions. The econometric analysis uses panel data primarily from Eurostat Database. |
| Keywords: | disparity, convergence, European Union, regions, migration, income, unemployment rate |
| JEL: | C20 F20 J60 |
| Date: | 2018–06 |
| URL: | http://d.repec.org/n?u=RePEc:sek:iefpro:7109900&r=eur |
| By: | Anastasiya SHAMSHUR (University of East Anglia); Laurent WEILL (LaRGE Research Center, Université de Strasbourg) |
| Abstract: | Using a large sample of firms from nine European countries, this study examines the relationship between bank efficiency and the cost of credit for borrowing firms. We hypothesize that bank efficiency – the ability of banks to operate at lower costs – is associated with lower loan rates and thus lower cost of credit. Combining firm-level and bank-level data, we find support for this prediction. The effect of bank efficiency on the cost of credit varies with firm and bank size. Bank efficiency reduces the cost of credit for SMEs, but does not exert a significant influence for either micro companies or large firms. Furthermore, the effect is driven by large banks, where improvements in bank efficiency tend to be strongly associated with lower cost of credit. We also find that lower bank competition facilitates the transmission of greater bank efficiency to lower cost of credit. Overall, our results indicate that measures that increase bank efficiency can foster access to credit. |
| Keywords: | bank efficiency, cost of credit. Classification-JEL G21, L11. |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:lar:wpaper:2018-06&r=eur |
| By: | Jens Ruhose; Stephan L. Thomsen; Insa Weilage |
| Abstract: | We propose a regression-adjusted matched difference-in-differences framework to estimate non-pecuniary returns to adult education. This approach combines kernel matching with entropy balancing to account for selection bias and sorting on gains. Using data from the German SOEP, we evaluate the effect of work-related training, which represents the largest portion of adult education in OECD countries, on individual social capital. Training increases participation in civic, political, and cultural activities while not crowding out social participation. Results are robust against a variety of potentially confounding explanations. These findings imply positive externalities from work-related training over and above the well documented labor market effects. |
| Keywords: | non-pecuniary returns, social capital, work-related training, matched difference-in-differences approach, entropy balancing |
| JEL: | J24 I21 M53 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_7268&r=eur |
| By: | Christian Pfister |
| Abstract: | France is the European country in which, together with the United Kingdom, the taxation of saving is highest (6% of GDP in 2016, against on average 3.8% in the European Union and 3.5% in the euro area). This situation is evaluated with regard to the theoretical debate on optimal taxation. Although no clear-cut conclusion can be drawn from that debate, it appears that the “dual Nordic” is nowadays widely considered as satisfying. However, theoretical research tends to underestimate the genuine tax burden, as they do not take two factors into consideration, namely cumulated taxation and inflation. In fact, although taxation is only one the factors that influence the allocation of assets, it plays an important role in savers’ choices. As an illustration, an evaluation of the impact of the newly-created ‘prélèvement forfaitaire unique’ (single flat tax on saving income) is provided by Christian Pfister. |
| Keywords: | Taxation, Saving, Optimal Taxation, Asset Allocation. |
| JEL: | E62 G11 H21 H22 H3 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:bfr:banfra:699&r=eur |
| By: | Bütikofer, Aline (Norwegian School of Economics); Riise, Julie (University of Bergen, Department of Economics); Skira, Meghan (Unversity of Georgia, Athens) |
| Abstract: | We examine the impact of the introduction of paid maternity leave in Norway in 1977 on maternal health. Before the policy reform, mothers were eligible for 12 weeks of unpaid leave. Mothers giving birth after July 1, 1977 were entitled to 4 months of paid leave and 12 months of unpaid leave. We combine Norwegian administrative data with survey data on the health of women around age 40 and estimate the medium- and long-term impacts of the reform using regression discontinuity and difference-inregression discontinuity designs. Our results suggest paid maternity leave benefits are protective of maternal health. The reform improved a range of maternal health outcomes, including BMI, blood pressure, pain, and me mntal health, and it increased health-promoting behaviors, such as exercise and not smoking. The effects were larger for first-time and low-resource mothers and women who would have taken little unpaid leave in the absence of the reform. We also study the maternal health effects of subsequent expansions in paid maternity leave and find evidence of diminishing returns to leave length. |
| Keywords: | Maternity Leave; Maternal Health; Regression Discontinuity |
| JEL: | I12 I18 J13 J18 |
| Date: | 2018–03–05 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:bergec:2018_001&r=eur |
| By: | Koen Declercq (IRES, UCLouvain, FNRS, and LEER, KU Leuven); Joris Ghysels (Maastricht University and VDAB); Julia Varga (Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences) |
| Abstract: | We study how admission policies in higher education affect enrollment decisions of men and women and the decision to apply to STEM programs. More specifically, we investigate how an increase in the relative acceptance probability for STEM programs affects these decisions. We apply our analysis to Hungary and we evaluate a policy reform that limited access to subsidized non-STEM programs. We find that this change in the selectivity of the admission system differently affected application decisions of men and women. After the reform, fewer students applied to higher education and the reform especially discouraged the participation of women. After the reform, more men and women applied to STEM programs or non-subsidized non-STEM programs in which they have to pay tuition fees. This last effect is stronger for women. As the reform affected the chance to be admitted to higher education, we estimate a structural model to analyze how the responsiveness to admission probabilities in application decisions differs between men and women. We find that women are more sensitive to admission probabilities. Finally, we use the model to simulate the impact of alternative admission policies on enrollment in STEM programs. We find that an open access policy in STEM programs would stimulate more men and women to apply to these programs. |
| Keywords: | higher education, admission, gender differences, STEM, structural model |
| JEL: | I21 I23 I24 J16 J24 |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:has:bworkp:1806&r=eur |
| By: | Bertocchi, Graziella; Brunetti, Marianna; Zaiceva, Anzelika |
| Abstract: | Using rich Italian data for the period 2006-2014, we document sizeable gaps between native and immigrant households with respect to wealth holdings and financial decisions. Immigrant household heads hold less net wealth than native, but only above the median of the wealth distribution, with housing as the main driver. Immigrant status reduces the likelihood of holding risky assets, housing, mortgages, businesses, and valuables, while it increases the likelihood of financial fragility. Years since migration, countries of origin, and the pattern of intermarriage also matter. The Great Recession has worsened the condition of immigrants in terms of wealth holdings, home ownership, and financial fragility. |
| Keywords: | immigrants,household finance,wealth,financial portfolios,Great Recession |
| JEL: | F22 G11 D14 E21 J15 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:280&r=eur |
| By: | Stefan Jestl (The Vienna Institute for International Economic Studies, wiiw) |
| Abstract: | This paper provides an overview of different inheritance tax regimes in selected European countries and the United States. We identify that in the majority of countries the tax rate is related to the relationship between bequeathing party and the bequeathed as well as the value of the inherited assets. In most countries the transfer of wealth within families is treated preferentially (lower tax rates, tax exemptions and reliefs). This is particularly the case for business assets and family homes. This analysis further discusses the features and effects of inheritance tax regimes based on various criteria. These cover behavioural responses of individuals and different distributional effects of an inheritance tax. Furthermore, the amount of tax revenues varies considerably both between countries and over time. Although the actual revenues of inheritance taxation are quite low in the selected countries (ranging between 0.1% and 0.5% of GDP), some indicators point to higher revenue potentials in the future. Due to an increase in private wealth and its concentration over time, we can expect to observe an increase in inheritance tax revenues, even though countries allow a high tax-free allowance. An appropriate design of inheritance taxation could further help to foster economic growth and decelerate the increase in wealth inequality. |
| Keywords: | inheritance taxation, tax regimes, wealth inequality |
| JEL: | D31 H21 |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:wii:wpaper:152&r=eur |
| By: | Sabine Duvaleix-Treguer (SMART - Structures et Marché Agricoles, Ressources et Territoires - INRA - Institut National de la Recherche Agronomique - AGROCAMPUS OUEST); Charlotte Emlinger (Centre d'Etudes Prospectives et d'Informations Internationales); Carl Gaigné (SMART - Structures et Marché Agricoles, Ressources et Territoires - INRA - Institut National de la Recherche Agronomique - AGROCAMPUS OUEST, CREATE - CREATE); Karine Latouche (SMART - Structures et Marché Agricoles, Ressources et Territoires - INRA - Institut National de la Recherche Agronomique - AGROCAMPUS OUEST) |
| Abstract: | The paper questions the impact of geographical indication labels on firm export competitiveness in the French cheese and cream industry. We use firm level data from the French custom and an original dataset of firms and products concerned by Protected Designations of Origin (PDO). Our estimations show that PDO labeling allows firms to increase their price by 11.5% on average. Moreover these products are perceived by consumers as products of better quality than non-PDO products. Regarding trade margins, while the effect on trade volume (the intensive margin of trade) is not significant, PDO labeling increases the probability of serving a foreign country (the extensive margin of trade). Our estimations show that exports of PDO products would increase by 11.4% if non-EU consumers value PDO label as much as EU consumers. |
| Keywords: | product quality,trade margins,geographical indication,PDO,price |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-01925630&r=eur |
| By: | Giulio Ecchia; Francesca Gagliardi; Caterina Giannetti |
| Abstract: | In this paper, we first rely on small area techniques to derive from EU-SILC survey new indicators of compensatory and investment policies at regional level. While compensatory policies have mainly the goal of protecting individuals from “old” risks (e.g. old-age), investment-related social policies tend to focus more on "new social risks" (i.e. skill deficits). We rely on these new indicators to perform a data-driven SVAR analysis to investigate the casual relationships between youth labour market outcomes and these two types of spending. Our results support the view that investment policies are more effective for tackling new social challenges. |
| Keywords: | small area techniques, investment policies, compensatory policies, SVAR analysis, ICA |
| JEL: | C18 C54 E02 |
| Date: | 2018–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:pie:dsedps:2018/236&r=eur |
| By: | Budzinski, Oliver; Stöhr, Annika |
| Abstract: | The ubiquitous process of digitization changes economic competition on markets in several ways and leads to the emergence of new business models. The increasing roles of digital platforms as well as data-driven markets represent two relevant examples. These developments challenge competition policy, which must consider the special economic characteristics of digital goods and markets. In Germany, national competition law was amended in 2017 in order to accommodate for digitization-driven changes in the economy and plans for further changes are already discussed. We review this institutional change from an economics perspective and argue that most of the reform's elements point into the right direction. However, some upcoming challenges may have been overlooked so far. Furthermore, we discuss whether European competition policy should follow the paragon of the German reform and amend its institutional framework accordingly. We find scope for reform particularly regarding data-driven markets, whereas platform economics appear to be already well-established. |
| Keywords: | competition policy,antitrust,industrial economics,digitization,media economics,institutional economics,industrial organization,big data,algorithms,platform economics,two-sided markets,personalized data,privacy,internet economics,consumer protection |
| JEL: | L40 K21 L86 L82 L81 L10 L15 D80 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:tuiedp:117&r=eur |
| By: | Rahbauer, S.; Staudigel, M.; Roosen, J. |
| Abstract: | This paper investigates fresh meat consumption in Germany during 2012-2014 through the specification of four-equation almost ideal demand systems (AIDS). On the basis of panel data from the GfK consumer research association, price and expenditure elasticities for the meat types (1) poultry, (2) pork, (3) beef and veal and (4) meat mixtures are quantified. Estimated parameters and elasticity coefficients are plausible and consistent with demand theory. The results show that beef and veal is the meat type most sensitive to expenditure. Compensated own-price elasticities indicate elastic demand relationships for beef and veal and meat mixtures with the latter being the most price sensitive meat type. Cross-price elasticities suggest substitutive relationships between the investigated meat types. A comparison of elasticities differentiated according to household groups indicates that households preferring high-quality or organic food are less price-sensitive than the average household across all investigated meat types. Low-income and younger households are further found to react comparatively elastic to price changes. The article closes by emphasizing the limited adequacy of the utilization of average elasticity coefficients for fresh meat. Acknowledgement : |
| Keywords: | Consumer/Household Economics |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iaae18:277058&r=eur |
| By: | Jones, A.M.;; Pastore, C.;; Rice, N.; |
| Abstract: | We explore the effect of tracking pupils by ability into different secondary schools on adult health, well-being and labour outcomes in England. We address selection bias by balancing individual pre-treatment characteristics via entropy matching, followed by parametric regressions estimated via OLS and IV approaches. Ability tracking does not affect long-term health and well-being, while it marginally raises hourly wages for low-ability pupils, compared to a mixed-ability system. Cognitive and non-cognitive abilities measured prior to secondary school are more significant and positive predictors of adult outcomes. Particularly, non-cognitive skills may have a protective role for adult health for lower cognitive ability children. |
| Keywords: | ability tracking; educational reform; well-being; health; entropy balancing; instrumental variables; |
| JEL: | I28 I1 C21 C26 |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:yor:hectdg:18/32&r=eur |
| By: | Michele Battisti; Yvonne Giesing; Nadzeya Laurentsyeva |
| Abstract: | We conducted a field experiment to evaluate the impact of job-search assistance on the employment of recently arrived refugees in Germany. The treatment group received job-matching support: an NGO identified suitable vacancies and sent the refugees' CVs to employers. Results of follow-up phone surveys show a positive and significant treatment effect of 13 percentage points on employment after twelve months. These effects are concentrated among low-educated refugees and those facing uncertainty about their residence status. These individuals might not search effectively, lack access to alternative support programmes, and may be disregarded by employers due to perceived higher hiring costs. |
| Keywords: | refugees, labour market integration, job search assistance, field experiment |
| JEL: | E24 F22 J61 J68 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_7292&r=eur |
| By: | Rune V. Lesner (Department of Economics and Business Economics, Aarhus University, Denmark); Anna Piil Damm (Department of Economics and Business Economics, Aarhus University, Denmark); Preben Bertelsen (Department of Psychology and Behavioural Sciences,, Aarhus University, Denmark); Mads Uffe Pedersen (Department of Psychology and Behavioural Sciences, Centre for Alcohol and Drug Research, Aarhus University, Denmark) |
| Abstract: | We set up an on-the-job learning model to explain how spare-time on-the-job training affects life skills formation of adolescents. We obtain causal estimates by exploiting variation between employed twins and estimation of a value-added model using full population Danish administrative data. We find that spare-time work experience has no effect on school absenteeism, reduces crime, increases school grades and the speed of enrollment into upper secondary education. We interpret our findings as evidence that the positive effect from on-the-job learning in spare-time jobs on life skill formation more than outweigh the potential negative consumption and time-use externalities of spare-time work. |
| Keywords: | Student employment, Spare-time jobs, Teenagers, Youth, Character skills, Life skills, Human capital, Crime, Juvenile Delinquency, Risky behavior, Educational attainment |
| JEL: | J24 J22 I21 |
| Date: | 2018–11–19 |
| URL: | http://d.repec.org/n?u=RePEc:aah:aarhec:2018-09&r=eur |
| By: | Danilo Cavapozzi (Department of Economics, University Of Venice Cà Foscari); Chiara Dal Bianco (University of Padua) |
| Abstract: | In this paper, we analyze the effect of work disability on the desire to retire as soon as possible of older workers. We exploit objective health indicators and anchoring vignettes to develop work disability measures enhancing the comparability across individuals of work disability self-assessments. Our results show that, even once controlling for individual fixed-effects, individuals experiencing work limiting health problems are found to have a stronger propensity to retire. The role of work disability in determining retirement intentions varies with earnings and job characteristics. |
| Keywords: | Retirement intentions, work disability, population ageing |
| JEL: | J21 J14 I15 |
| URL: | http://d.repec.org/n?u=RePEc:ven:wpaper:2018:26&r=eur |
| By: | Libertad González Luna; Núria Rodríguez-Planas |
| Abstract: | We study the effect of social gender norms on the incidence of domestic violence. We use data for 28 European countries from the 2012 European survey on violence against women, and focus on first and second generation immigrant women. We find that, after controlling for country of residence fixed effects, as well as demographic characteristics and other source-country variables, higher gender equality in the country of ancestry is significantly associated with a lower risk of victimization in the host country. This suggests that gender norms may play an important role in explaining the incidence of intimate partner violence. |
| Keywords: | domestic violence, gender, social norms, immigrants, epidemiological approach |
| JEL: | I1 J6 D1 |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:upf:upfgen:1620&r=eur |
| By: | Christophe Courbage (Geneva School of Business Administration (HES-SO), Switzerland); Guillem Montoliu-Montes (University of Lausanne, Department of Actuarial Science, Switzerland); Béatrice Rey (Univ Lyon, Université Lumière Lyon 2, GATE UMR 5824, F-69130 Ecully, France) |
| Abstract: | This paper empirically assesses how financial risk aversion reacts to a change in individuals’ wealth and health and to the presence of both financial and health risks using the Survey of Health, Ageing, and Retirement in Europe (SHARE). Individuals in our sample exhibit financial risk aversion decreasing both in wealth and health. Financial risk aversion is also found to increase in the presence of a background financial risk and a background health risk. Interestingly, risk aversion is shown to be convex in wealth but linear in health. Such findings complement the literature on risk aversion behaviours and can help to better understand various economic decisions in a risky environment. |
| Keywords: | risk aversion, (cross-) DARA, (cross-) risk vulnerability, background risk, health risk |
| JEL: | D01 D81 I12 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:gat:wpaper:1827&r=eur |