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on Microeconomic European Issues |
| By: | Jascha Dräger; Nora Müller; Klaus Pforr |
| Abstract: | This study investigates how actual and anticipated intergenerational wealth transfers (i.e., inter-vivo gifts and inheritances) contribute to social stratification in the transition to homeownership. Utilizing discrete-time survival analysis on data from the German Socio-Economic Panel Study (N=13, 018), we find that individuals whose parents were manual workers or service workers are less likely to become homeowners. Receiving inheritances or inter-vivo gifts substantially increases the probability of becoming a homeowner, with the effect being most pronounced in the transfer year and diminishing rapidly after that. Anticipated future transfers also increase homeownership probability before transfer receipt. Anticipated and received together transfers explain up to 56% of the variation in homeownership transition rates by parental socio-economic status but the importance of transfers for the transition to homeownership varies strongly across class contrasts. Ignoring expected transfers leads to a significant underestimation of the importance of transfers on the effect of parental SES on homeownership. |
| Keywords: | Social stratification, homeownership, inheritance, intergenerational transfers |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp1210 |
| By: | Sebastian Becker; Annica Gehlen; Johannes Geyer; Peter Haan |
| Abstract: | We provide novel evidence about the incentive and welfare effects of an increase in the generosity of disability benefits. Importantly, a unique policy variation in Germany allows us to isolate the income effect of a change in benefit generosity. We leverage this quasi-experimental policy variation using an RD design to estimate the effect of increasing disability benefits on employment, earnings, labor market transitions, and mortality outcomes using administrative data on the universe of new disability benefit recipients. Contrary to previous literature, our analysis reveals no significant impact on the employment and earnings of DI recipients due to the increased benefits. However, we find a sizable effect of the probability of returning to the labor market. We find no effects on recipient mortality six years after benefit award, but estimates imply a notable reduction in poverty risk, highlighting meaningful welfare implications of increased generosity. |
| Keywords: | disability insurance, pension reform, wealth effect, labor supply, mortality, RDD |
| JEL: | H55 I12 J22 J26 |
| Date: | 2024–09–23 |
| URL: | https://d.repec.org/n?u=RePEc:bdp:dpaper:0050 |
| By: | Marbach, Moritz; Vallizadeh, Ehsan; Harder, Niklas; Hangartner, Dominik; Hainmueller, Jens |
| Abstract: | Given the global displacement crisis, the integration of refugees has emerged as a critical policy issue for many host countries. A key challenge involves supporting refugees in learning the language of their host country. While several European nations have instituted publicly funded language training for asylum seekers and refugees soon after their arrival, evidence on the efficacy of these early language programs in promoting economic integration remains limited. This study examines the impact of a pioneering, large-scale ad hoc program introduced by German policymakers, which provided basic language training to over 230, 000 refugees arriving in 2015-16. Utilizing register data on the population of asylum seekers and exploiting a cutoff date in program eligibility, we assess the program's effectiveness using a regression discontinuity design. Our findings reveal no discernible effect on refugee employment over the subsequent two years. To explore whether language programs are generally ineffective during refugee crises, we contrast these results with the impacts of a more comprehensive, preexisting, yet smaller-scale program. Using a variety of difference-in-differences estimators, we find that this program considerably increased refugee employment. These contrasting findings offer important insights for policymakers on designing effective language training programs for refugees. |
| Date: | 2024–10–04 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:2ysd6 |
| By: | Carmen Sillero Illanes (European Commission - JRC); Rosa Gallardo Cobos; Pietro Moncada Paterno' Castello (European Commission - JRC); Karel Haegeman (European Commission - JRC) |
| Abstract: | To enhance EU competitiveness and foster the transition to sustainability, the Draghi Report underscores the necessity of enhanced policy coordination across EU Member States and European institutions. This paper advocates a systemic approach that integrates subnational governance to expedite sustainability transitions, applying the concept of climate neutrality to the European aviation system. In 2023, Europe’s top 40 airports handled 10.2 million flights and 1.19 billion passengers, driving mobility, tourism, and economic growth. However, aviation is classified by the IPCC as a ‘hard-to-abate’ sector, contributing 2% of global energy-related CO2 emissions in 2022, with a total warming impact 2.6 times that of CO2 alone. With an expected annual passenger increase of 4.7%, emissions could triple in coming decades, threatening net-zero goals by 2050. Following a systematic literature review on sustainable aviation, policy initiatives at European, national, and regional levels are mapped and classified according to transition intervention points. Gaps and barriers are identified, and a place-based dimension of the sociotechnical transition is introduced using smart specialisation strategies. The paper argues that effective sustainability transition pathways require a deep understanding of problems and solutions from the perspective of those directly affected, suggesting a place-based approach to align territorial policies with European initiatives. The conclusions emphasize the need for systemic, transformative, and place-based policies to achieve aviation climate neutrality. Coordinating efforts across local, regional, national, and European levels is vital. The paper illustrates that considering place-based dimensions early in EU policies can enhance sustainability transitions for competitiveness. |
| Keywords: | aviation, Net Zero Industry Act, sustainability, transition, multilevel perspective, transformative innovation, competitiveness |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:ipt:trater:202401 |
| By: | Angela Stefania Bergantino (UNIBA - Università degli studi di Bari Aldo Moro = University of Bari Aldo Moro); Christian Bontemps (ENAC-LAB - Laboratoire de recherche ENAC - ENAC - Ecole Nationale de l'Aviation Civile, TSE-R - Toulouse School of Economics - UT Capitole - Université Toulouse Capitole - UT - Université de Toulouse - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Mario Intini (UNIBA - Università degli studi di Bari Aldo Moro = University of Bari Aldo Moro); Ada Spiru (UNIBA - Università degli studi di Bari Aldo Moro = University of Bari Aldo Moro) |
| Abstract: | The purpose of this study is to assess the impact of Lufthansa's bid to acquire the Italian airline ITA Airways. On the basis of different scenarios, we aim to estimate the impact on the supply of air products and on consumers. To simulate the impact of such a merger on the European market, we rely on standard structural models of demand and supply used in the empirical IO literature. Since Berry (1994), many papers have used them to estimate demand in various sectors, including the airline sector, mostly at the US level. In particular, Berry et al. (2006) use a random coefficients model to study the role of hubs, while Berry and Jia (2010) compare the years 1999 and 2006. We want to compare the variation in consumer surplus and equilibrium fares under different scenarios. In particular, we need to model different possibilities for the range of products offered by the new merged entity. We also want to compare these scenarios with others in which ITA Airways could have merged with another airline, such as Air France. In our paper, in our attempt to simulate the impact of the merger on consumer surplus and fares, we face an additional challenge due to the possibility of repositioning the products offered by the competitors of ITA Airlines and LuftHansa. A particular feature of the European market is the presence of many low-cost carriers. These airlines are more likely to react to a reduction in the number of competitors and we need to model their strategies too. |
| Date: | 2024–07–01 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-04709659 |
| By: | Fructuoso Borrallo (BANCO DE ESPAÑA); Lucía Cuadro-Sáez (BANCO DE ESPAÑA); Corinna Ghirelli (BANCO DE ESPAÑA); Javier J. Pérez (BANCO DE ESPAÑA) |
| Abstract: | This paper challenges the prevailing assumption that the intensification of the weather phenomena known as El Niño and La Niña generally exert upward and downward pressures, respectively, on international food commodity prices that, in turn, affect consumer prices even in distant jurisdictions such as Europe. As regards the first point, we show that there are nuances that have to do with composition effects (the type of commodity) and sample periods (more recent decades present a different frequency of weather events, with producers having adopted mitigation strategies over time), in such a way that the impact is weaker nowadays and, in some cases, may even change sign (for some commodities, depending on the period of reference). With regard to the second point, and focusing on consumer price inflation in the euro area and its four largest constituent countries (Germany, France, Italy, and Spain), we show that it is crucial to account for the mitigating and sample-period-specific role of domestic agricultural policies (in the euro area, the European Union’s Common Agricultural Policy, CAP). To carry out our analysis, we construct a detailed database for the 1970–2023 period and use a local projections empirical framework. Among other results, we show that when using a sample period that starts at the time of the creation of the euro area (in the late 1990s), an intensification of El Niño actually decreases euro area headline inflation by about 0.3 percentage points (pp) after 12 months, while La Niña increases it by 0.6 pp over the same horizon. We explain our results on the basis of the aforementioned factors: composition effects, sample periods, and the CAP. |
| Keywords: | El Niño, La Niña, food prices, euro area inflation |
| JEL: | C32 F62 F64 O13 Q54 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:bde:wpaper:2432 |
| By: | Fernando, Gonzalez Laxe; José Francisco, Armesto Pina; Patricio Sanchez, Sanchez Fernandez |
| Abstract: | In 2023, like most of the economies in its environment, the Galician economy experienced a significant slowdown in its growth rate. Thus, Galician GDP grew by 1.8%, seven-tenths less than in Spain, this growth being not only higher than the European average and the Eurozone but also higher than countries such as France and Italy. The aggregate GDP growth in 2023 was based on the positive contribution of external demand, which contributes one point compared to eight-tenths in the case of internal demand, with Spain presenting a greater contribution from internal demand (1.7 points). Among the different components, the marked slowdown in household consumption stands out, with a growth of 0.5% (4.5% in the previous year), and the contraction of 0.7% in investment, contrary to what happened in the previous two years. |
| Keywords: | Galicia, Spain, Europe, National Accounts, GDP, foreign trade |
| JEL: | E01 E02 H00 J08 |
| Date: | 2024–09–01 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:122203 |
| By: | Vincenzo Lanzetta; Cristina Ponsiglione |
| Abstract: | The European Union Regional Innovation Scoreboard (EURIS) is currently and broadly used for the definition of regional innovation policies by European policymakers; it is a regional innovation measuring tool for the analysis of each specific innovation indicator, from which it is possible to analyze the overtime evolution of each regional innovation indicator; according to the importance of the European Union Regional Innovation Scoreboard for innovation policy purposes, we state that European regional policymakers need integrative and synergistic methodological tools, with respect to the EURIS one, for innovation policy purposes. Thus, we highlight the need to integrate the current methodology of the European Regional Innovation Scoreboard with a Factorial K-means (FKM) tool for clustering purposes, and with a neural network (NN) tool for performing what-if policy analyses. We claim that our proposed FKM-NN tool could be used, by regional innovation policymakers, as a very effective synergistic instrument of the European Union Regional Innovation Scoreboard. |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2409.13316 |
| By: | Bernardo Caldarola; Luca Fontanelli |
| Abstract: | Recent empirical evidence finds positive associations between digitalisation and industry concentration. However, ICT may not be all alike. We investigate the effect of the purchase of cloud services on the long run size growth rate of French firms. Our findings suggest that cloud services positively impact firm growth rates, with smaller firms experiencing more significant benefits compared to larger firms. This evidence suggests that the diffusion of cloud technologies may help mitigate concentration in the era of the digital transition by favouring the digitalisation and growth of smaller firms, especially when the cloud services provided are more advanced. |
| Keywords: | cloud, ICT, concentration, firm growth rate, firm performance |
| Date: | 2024–10–02 |
| URL: | https://d.repec.org/n?u=RePEc:ssa:lemwps:2024/25 |
| By: | Alienor Cameron; Maria Garrone |
| Abstract: | To reach its 2050 objective of carbon neutrality, the European Union (EU) must continue to step up its climate efforts, while ensuring the competitiveness of its industries is not harmed. The EU Emission Trading Scheme (ETS) is at the core of the bloc's industrial decarbonization efforts. This paper explores this topic by digging into whether there is a causal relationship between industrial firms' emission intensity and their economic and financial performance. We construct a dataset covering around 1, 200 industrial firms covered by the EU ETS' third phase and estimate a novel indicator of volume-based emission intensities for these firms. Applying an IV approach to a within-firm panel model, we find that firms' emission intensity is negatively related to their corporate performance, and that this does not depend on the competitive environment they operate in. |
| Keywords: | EU ETS, heavy industry, emission intensity, corporate performance. |
| JEL: | D22 H23 L51 Q58 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:drm:wpaper:2024-26 |
| By: | McDaid, David; Treasure, Janet; Fernandez-Aranda, Fernando; Herpertz-Dahlmann, Beate; Quoidbach, Vinciane; Dickson, Suzanne; Gorwood, Philip |
| Abstract: | Background Anorexia nervosa (AN) is a serious mental illness. One third of people develop severe, enduring, illness, adversely impacting quality of life with high health system costs. This study assessed the economic case for enhanced care for adults newly diagnosed with AN. Methods A five-state 312 month-cycle Markov model assessed the economic impact of four enhanced care pathways for adults newly diagnosed with AN in England, Germany and Spain. Enhancements were halving wait-times for any outpatient care, receiving specialist outpatient treatment post-referral, additional transitional support post-referral, and all enhancements combined. Care pathways, estimates of impact, resource use and costs were drawn from literature. Net monetary benefits (NMBs), impacts on health system costs and Disability Adjusted Life Years (DALYs) averted were estimated. Parameter uncertainty was addressed in multi-way sensitivity analyses. Costs are presented in 2020 purchasing power parity adjusted Euros. Results All four enhanced care pathways were superior to usual care, with the combined intervention scenario having the greatest NMBs of €248, 575, €259, 909 and €258, 167 per adult in England, Germany and Spain respectively. This represented maximum NMB gains of 9.38% (€21, 316), 4.3% (€10, 722) and 4.66% (€11, 491) in England, Germany and Spain compared to current care. Healthcare costs would reduce by more than 50%. Conclusions Early and effective treatment can change the trajectory of AN. Reducing the untreated duration of the disorder is crucial. There is a good economic case in different country contexts for measures to reduce waiting times between diagnosis and treatment and increase access to enhanced outpatient treatment. |
| Keywords: | healthcare costs; net monetary benefits; anorexia nervosa; economic modelling; enhanced care pathways |
| JEL: | J1 |
| Date: | 2024–05–23 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:123629 |
| By: | Chiara Mio (Dept. of Management, Venice School of Management, Università Ca' Foscari Venice); Francesco Scarpa (Dept. of Management, Venice School of Management, Università Ca' Foscari Venice); Elisa Trevisani (Dept. of Management, Venice School of Management, Università Ca' Foscari Venice) |
| Abstract: | Given recent debate on the quality of sustainability disclosure and its determinants, this study examines the role of sustainability reporting assurance in improving the quality of sustainability reporting. Drawing from a sample of 111 companies listed in the EURO STOXX 600 and located in Italy, France and Spain - where sustainability reporting assurance is mandatory - we find that the quality of the sustainability assurance process generally enhances the quality of assured reports. In essence, a well-executed assurance process positively impacts on sustainability reports’ readability, completeness and standardization, thereby enhancing their overall quality. Our study has important implications for the literature on the quality of sustainability disclosure and the role of mandatory assurance, offering important insights for policy makers in light of the forthcoming implementation of the Corporate Sustainability Reporting Directive (CSRD), which requires assurance of mandatory sustainability reports throughout Europe. |
| Keywords: | Sustainability reporting, Assurance, Quality, Non-financial disclosure. |
| JEL: | M14 M41 Q56 |
| Date: | 2024–04 |
| URL: | https://d.repec.org/n?u=RePEc:vnm:wpdman:212 |
| By: | Amit Garg; Kruti Upadhyay; Sanjay Kumar Jain |
| Abstract: | This study is an attempt to compare and contrast the existing sustainability-related frameworks – Sustainable Finance Disclosure Regulations (SFDR) introduced by the European Union, Business responsibility and sustainability reporting (BRSR) introduced by the Securities and Exchange Board of India (SEBI) and the International Finance Corporation Performance Standards (IFC PS) developed by the International Finance Corporation. The content analysis method has been employed to gain an in-depth understanding of the indicators included in these frameworks. Our key findings suggest that SFDR is the most comprehensive of the three frameworks considered. The BRSR framework stops at the disclosures related to the business itself. However, the IFC PS is the most adaptable as compared to the other two frameworks considered for this study. |
| Date: | 2024–10–07 |
| URL: | https://d.repec.org/n?u=RePEc:iim:iimawp:14717 |
| By: | Gergely Hudecz; Alexandre Lauwers; Yasin Mimir; Graciela Schiliuk |
| Abstract: | Geoeconomic fragmentation is on the rise amidst heightened geopolitical tensions and a surge in inward-looking policies to strengthen economic and national security. Focusing on trade and capital flows, this paper takes a closer look at the implications of geoeconomic fragmentation for the ASEAN+3 and euro area regions, respectively. Both regions exhibit high degrees of trade openness that expose them to repercussions from geoeconomic fragmentation. Our analysis shows that overall ASEAN+3 trade values remain stable, but trade patterns have shifted. While China's exports have been affected by trade tensions with the United States, ASEAN exports have benefited from the region’s “connector” role. From the European perspective, we document an increase in the euro area’s financial exposures to geopolitically distant countries over the last two decades, and our analysis points to the vulnerability of capital flows to geopolitical risks. Regional financing arrangements should stand ready to support members as they navigate the risks of geoeconomic fragmentation, adapting tools and policies as necessary in line with their mandates. This paper is prepared jointly by staff from AMRO and the ESM. |
| Date: | 2024–10–07 |
| URL: | https://d.repec.org/n?u=RePEc:stm:dpaper:23 |
| By: | Natalie Dvorakova; Tomas Sestorad |
| Abstract: | This paper examines the drivers of the post-pandemic surge in inflation in four small open economies: Czechia, Hungary, Poland, and Slovakia. For this purpose, a Bayesian structural vector autoregressive model with sign-zero restrictions and block exogeneity is employed. The results show that both foreign demand and foreign supply shocks have contributed significantly to inflation in the post-2020 period across countries, alongside notable contributions from domestic factors explaining differences among economies. Specifically, supply-side shocks are identified as the primary domestic factor across all countries, whereas domestic demand shocks were much less influential. Exchange rate shocks were pronounced in Hungary only, while monetary policy shocks have had a minimal impact on inflation since 2022 in all the countries considered. Additionally, we provide decompositions of core inflation, highlighting the predominance of domestic factors. |
| Keywords: | Bayesian VAR, extraordinary events, inflation, sign-zero restrictions, small open economies |
| JEL: | C32 E31 E32 E52 F41 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:cnb:wpaper:2024/5 |
| By: | Thi Ngoc Nguyen; Felix Muesgens |
| Abstract: | The continued transition towards electric mobility will decrease energy tax revenues worldwide, which has substantial implications for government funds. At the same time, demand for transportation is ever increasing, which in turn increases congestion problems. Combining both challenges, this paper assesses the effectiveness of congestion pricing as a sustainable revenue stream to offset fuel tax loss in 2030 while simultaneously enhancing efficiency in the transport sector. A congestion-based toll that is road-and-time-variant is simulated for the greater Berlin area in Germany using the multi-agent transport simulation (MATSim) software. Through the simulation results, this paper quantifies the impacts of the toll on the governmental revenue, traffic management, environment, social welfare, and the distribution effects. We find that the revenue from congestion tolls in a metropolitan area can compensate the reduction in passenger car fuel tax. Furthermore, a remarkable welfare surplus is observed. The toll also successfully incentivises transport users to adjust their travel behaviour, which reduces traffic delay time by 28%. CO2 emissions as a key metric for decarbonisation of the transport sector decrease by more than 5%. The analysis of the distribution effects suggests that a redistribution plan with a focus on the middle-low-income residents and the outer boroughs could help the policy gain more public acceptance. |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2409.20033 |
| By: | Giorgio Stefano Bertinetti (Dept. of Management, Università Ca' Foscari Venice); Licia Ferranna (Dept. of Management, Università Ca' Foscari Venice); Gloria Gardenal (Dept. of Management, Università Ca' Foscari Venice) |
| Abstract: | The pandemic caused by the Covid-19 virus has severely impacted the real estate industry. The research investigates the relationship between the spread of the virus and REITs performances in Europe, considering the role played by localization and diversification of properties in the real estate portfolios. The results show that Covid-19 had heterogeneous impacts depending on property types. Moreover, risks associated to Covid-19 may be described by synthetic indexes that represent the degree of vulnerability of economic activities carried out in the real estates. |
| Keywords: | Covid-19, commercial real estates, REITs, vulnerability, abnormal returns. |
| JEL: | G1 I10 D80 R10 R30 |
| Date: | 2023–01 |
| URL: | https://d.repec.org/n?u=RePEc:vnm:wpdman:200 |
| By: | Dimitrios Bakas (Nottingham Business School, Nottingham Trent University (UK) and Rimini Centre for Economic Analysis (RCEA) (USA)); Ioanna Konstantakopoulou (Centre for Planning and Economic Research (Greece)); Athanasios Triantafyllou (IESEG School of Management, Univ. Lille (France)) |
| Abstract: | This paper examines the validity of the tourism-led economic growth hypothesis for the Euro Area economies. We employ linear and nonlinear autoregressive distributed lag cointegration approaches to examine the symmetric and asymmetric effects of tourism on economic growth. Furthermore, we control for the presence of structural breaks in the time series which account for the recent financial and debt crises in the Euro Area. The results support the positive impact of tourism on economic growth for most of the Euro Area economies and are robust to alternative tourism measures. The findings indicate that an asymmetric impact exists both in the long and the short run. Positive and negative shocks of tourism and real exchange rate result to very different effects, in the sign and magnitude, on economic growth. |
| Keywords: | Tourism-Led Growth Hypothesis; Euro Area; ARDL; Nonlinear ARDL; Structural Breaks |
| JEL: | E00 F00 C32 L83 O10 O11 Z32 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:awm:wpaper:20 |
| By: | Philipp Heimberger (The Vienna Institute for International Economic Studies, wiiw) |
| Abstract: | This paper is about fiscal consolidation measures (i.e. tax hikes and government spending cuts motivated by a desire to reduce the fiscal deficit and public debt) in euro area (EA) countries. The focus is on analysing the growth effects of fiscal adjustments as well as their implications for debt sustainability assessments. I discuss the size and composition of fiscal consolidation by distinguishing three periods the run-up to the EA, when governments faced the Maastricht criteria for joining the monetary union (1992-1998); before and during the recession triggered by the global financial crisis (1999-2009); and the euro crisis (with a specific focus on the 2011-2013 period). The empirical evidence on the growth effects of fiscal consolidation shows that while fiscal adjustments are contractionary, the negative growth effects were particularly strong and persistent during the euro crisis. With regard to the austerity outlook, I show that, beginning in 2025, EA countries are set to implement fiscal consolidations over multiple years so as to meet reformed EU fiscal rules. The adjustment requirements for some member countries are large in historical comparison. The paper argues that the framework for debt sustainability analysis at the heart of the reformed EU fiscal rules downplays the domestic growth impacts of fiscal adjustments and ignores cross-country spill-overs that magnify domestic growth effects. In all likelihood, the reformed framework underestimates the negative growth effects of fiscal consolidation. I conclude that implementing the multi-year fiscal adjustments required to meet EU fiscal rules may not reduce public debt ratios across the EA’s member countries, as the European Commission expects, and that the economic and political implications of austerity may complicate the governance of a fragile EA. |
| Keywords: | Fiscal policy, fiscal consolidation, fiscal multiplier, growth, public debt, euro area |
| JEL: | H30 H63 O47 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:wii:wpaper:253 |