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on European Economics |
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Issue of 2008‒02‒16
fifteen papers chosen by Giuseppe Marotta University of Modena and Reggio Emilia |
| By: | Pilar García Gómez |
| Abstract: | This paper investigates the relationship between health shocks and labour outcomes in 9 European countries using the European Community Household Panel. In order to control for the non-experimental nature of the data I use matching and matching combined with difference-in-differences techniques. My results suggest that there is a significant effect running from health to the probability of employment and to income: individuals who suffer a health shock are significantly more likely to leave employment, and in several countries this is associated to a significant reduction in some types of income. There are differences in the estimates across countries, with the largest employment effects being found in the Netherlands, Denmark and Ireland, and the smallest in France, Italy and Greece. The differences in Social Security arrangements help to explain the differences in the estimates for the effects of the health shocks. |
| Date: | 2008–01 |
| URL: | http://d.repec.org/n?u=RePEc:fda:fdaddt:2008-01&r=eec |
| By: | Arpaia, Alfonso; Pichelmann, Karl |
| Abstract: | Both common macroeconomic shocks and country-specific developments have subjected the flexibility of wage setting mechanisms in the euro area to a stress test in recent years. Against this background, this paper takes a fresh look at wage flexibility in EMU and attempts to draw a few lessons from the experience of the early years. First, we set the stage for the analysis by providing a brief description of the stylised facts regarding nominal and real wage and unit labour cost developments in the euro area over the recent business cycle. Then, the paper presents an empirical assessment of wage inertia based on new econometric estimates of a Phillips-curve type wage equation across euro area countries and offers an interpretation of the main findings with respect to nominal and real wage flexibility. Finally, we investigate the cyclical responsiveness of relative competitive positions among euro area countries. We conclude that from a bird's eye perspective euro area wage and labour cost dynamics have been quite benign in the past couple of years. However, our estimates suggest that persistent cross-country differences in wage and labour cost developments have not always reflected warranted adjustment needs; they are rather indicative of an eventually insufficient degree of nominal and real wage flexibility in the euro area. |
| Keywords: | Phillips curve; nominal and real rigidities; unit labour costs; EMU |
| JEL: | J0 J30 E30 E31 |
| Date: | 2007–06 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:4364&r=eec |
| By: | Edward Christie (The Vienna Institute for International Economic Studies, wiiw) |
| Abstract: | This study seeks to answer two questions: first, which countries and industries within the EU-15 group of countries are most vulnerable to possible supply shocks with respect to crude oil and with respect to natural gas and, second, what is the current state of the EU's debate on Europe's energy security. The most vulnerable countries with respect to petroleum products are Finland, Belgium and Greece, while the most vulnerable countries with respect to natural gas are Finland, Austria and Italy. The least vulnerable countries in both cases are first and foremost those with currently high North Sea extraction levels such as the UK, Denmark and, in the case of gas only, the Netherlands. Leaving those countries aside (while bearing in mind that their resources are running out), the least vulnerable countries are Spain and France in the case of petroleum products, and France and Ireland in the case of natural gas. The focal point of the EU's energy security debate is its relationship with Russia and the Russian gas monopoly exporter, Gazprom. The EU is already quite strongly dependent on Russian resources, and this dependence is set to rise if current trends continue. Furthermore, Gazprom's very active corporate expansion strategy, both downstream within the EU and upstream in Central Asia and elsewhere, further heightens the EU's energy security problem. The European Commission, which was previously seeking to achieve a fully competitive internal energy market through unbundling of supply and distribution, has responded to this challenge by proposing new legislation that would effectively impose unbundling on EU companies and on non-EU companies that operate inside the EU, Gazprom included. The legislation that the European Commission proposes is, from an economic point of view, possibly the best response to the EU's current energy challenges. It would limit (and, in theory, possibly reverse) Gazprom's downstream penetration in the EU, in addition to contributing to a better functioning of the EU's internal energy market. Moreover, the Commission's approach implicitly leaves an open door for Russia to choose between a first-best solution and a second-best solution with respect to EU-Russian energy relations. If liberalization were to occur bilaterally, both entities would be able to invest in each other's energy markets, leading to improved efficiency and security for all concerned. If Russia were to refuse, the EU would have in place a mechanism that would enable it to prevent Gazprom from entering the EU's downstream market, thus contributing to improving the EU's energy security at the expense of Gazprom profits. |
| Keywords: | energy dependence, energy security, EU-Russia relations |
| JEL: | Q32 Q34 Q38 |
| Date: | 2007–12 |
| URL: | http://d.repec.org/n?u=RePEc:wii:rpaper:rr:343&r=eec |
| By: | Didier Blanchet (INSEE institut national de la statistique et des études économiques); Thierry Debrand (IRDES institut for research and information in health economics) |
| Abstract: | This work uses the first wave of SHARE to analyze the impact of health and satisfaction at work on preferences concerning age at retirement in 10 European countries. Preferences concerning age at retirement are measured by the rate of people wishing to retire as soon as possible. We examine how health and work conditions contribute to explain differences in these preferences both at the individual level and between countries. At the individual level, the effects that are obtained are consistent with expectations, but they are of little help for explaining international differences. Fixing health and work conditions, we observe a north-south gradient of preferences for early retirement which remains close to the gross cross country differentials. All these results are robust to control by institutional features of pension systems (overall generosity of pension systems) and to control for the selection bias implied by the fact that preferences are only measured on people that are still in employment. |
| Keywords: | retirement, monetary factor, Health, job satisfaction |
| JEL: | J28 I10 J26 |
| Date: | 2007–02 |
| URL: | http://d.repec.org/n?u=RePEc:irh:wpaper:dt1&r=eec |
| By: | Thierry Debrand (IRDES institut for research and information in health economics); Nicolas Sirven (IRDES institut for research and information in health economics) |
| Abstract: | Promoting social participation of the older population (e.g. membership in voluntary associations) is often seen as a promising strategy for 'healthy ageing' in Europe. Although a growing body of academic literature challenges the idea that the link between social participation and health is well established, some statistical evidence suggest a robust positive relationship may exist for older people. One reason could be that aged people have more time to take part in social activities (due to retirement, fewer familial constraints, etc.); so that such involvement in voluntary associations contributes to maintain network size for social and emotional support; and preserves individuals' cognitive capacities. Using SHARE data for respondents aged fifty and over in 2004, this study proposes to test these hypotheses by evaluating the contribution of social participation to self-reported health (SRH) in eleven European countries. The probability to report good or very good health is calculated for the whole sample (after controlling for age, education, income and household composition) using regression coefficients estimated for individuals who do and for those who do not take part in social activities (with correction for selection bias in these two cases). Counterfactual national levels of SRH are derived from integral computation of cumulative distribution functions of the predicted probability thus obtained. The analysis reveals that social participation contributes by three percentage points to the increase in the share of individuals reporting good or very good health on average. Higher rates of social participation could improve health status and reduce health inequalities within the whole sample and within every country. Our results thus suggest that 'healthy ageing' policies based on social participation promotion may be beneficial for the aged population in Europe. |
| Keywords: | Healthy ageing, Self-reported health, Social participation, Social capital, SHARE data, Counterfactual analysis, Stochastic dominance |
| JEL: | I12 Z13 |
| Date: | 2008–01 |
| URL: | http://d.repec.org/n?u=RePEc:irh:wpaper:dt7&r=eec |
| By: | Michael D. Bordo; Harold James |
| Abstract: | This study grounds the establishment of EMU and the euro in the context of the history of international monetary cooperation and of monetary unions, above all in the U.S., Germany and Italy. The purpose of national monetary unions was to reduce transactions costs of multiple currencies and thereby facilitate commerce; to reduce exchange rate volatility; and to prevent wasteful competition for seigniorage. By contrast, supranational unions, such as the Latin Monetary Union or the Scandinavian Currency Union were conducted in the broader setting of an international monetary order, the gold standard. There are closer parallels between EMU and national monetary unions. Historical monetary unions also were associated with fiscal unions (fiscal federalism). Both fiscal and monetary unions were an important part of the process of political unification. In the past, central banks, and the currencies they managed, have been discredited or put under severe strain as a result of: severe or endemic fiscal problems creating pressures for the monetization of public debt; low economic growth may produce demands for central banks to pursue more expansionary policies; regional strains producing a demand for different monetary policies to adjust to particular regional pressures; severe crises of the financial system; and tensions between the international and the domestic role of a leading currency. In particular, there is the possibility for the EMU that low rates of growth will produce direct challenges to the management of the currency, and a demand for a more politically controlled and for a more expansive monetary policy. Such demands might arise in some parts or regions or countries of the euro area, but not in others and would lead to a politically highly difficult discussion of monetary governance. |
| JEL: | F02 F33 N20 |
| Date: | 2008–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:13815&r=eec |
| By: | Melad, Khaled |
| Abstract: | In fact The EU is the most important trading partner for the Mediterranean countries accounting for about 45% of both MED exports (€40 billion) and imports (€42 billion) in 2004. This corresponds to approximately 5% of both the EU’s imports and exports, where The most important EU exports to the Mediterranean countries are in machinery and mechanical appliances (15%), electrical machinery (11%)and vehicles (8%),while EU imports from Med countries are dominated by fuels and oil (40%) and to a lesser extent by textiles (10%). |
| Keywords: | foreign trade; EU; EU-Mediteraneean countries agreements |
| JEL: | F15 F13 |
| Date: | 2008–02–09 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:7085&r=eec |
| By: | Peter Havlik (The Vienna Institute for International Economic Studies, wiiw) |
| Abstract: | This paper investigates the process of trade integration between the enlarged European Union and the Newly Independent States (NIS), focusing on the new EU member states (NMS) and selected NIS (Russia, Ukraine, Belarus, Moldova and Kazakhstan). The paper analyses the evolution of the regional and commodity composition of trade in the countries concerned. A detailed market share analysis reveals the emerging trade specialization patterns. There has been a general trade reorientation of both NMS and (less so) the NIS towards the West. The recent trade developments on EU¿NIS borders indicate a closer trade integration among the NMS, declining trade integration among the NIS, as well contradictory shifts in NMS¿NIS exports and imports. The importance of the NIS as export markets for the NMS is growing, in particular for the NIS neighbours. The bulk of EU exports is made up of manufacturing products. By contrast, EU imports from the NMS and NIS display a much more diversified pattern. The key NMS manufacturing export commodities to the NIS are chemicals, machinery & equipment, motor vehicles and food products, whereas NMS manufacturing imports from the NIS are dominated by basic metals, refined petroleum, chemicals and fabricated metal products, and there is a high concentration on just a few basic manufactures. The NMS increasingly specialize on high-tech and medium-high-tech products. The wide-ranging modernization and industrial restructuring in the NMS has been facilitated by the process of EU integration and by massive inflows of FDI whereas in the NIS the resource specialization generally increased as reforms and restructuring were delayed. It is questionable whether the NIS will be able to revamp their industrial structure without significantly stepping up reform efforts, trade integration and attracting more FDI. |
| Keywords: | EU integration, foreign trade, EU New Member States, Newly Independent States, Russia, Ukraine, Belarus, Moldova, Kazakhstan. |
| JEL: | F14 F15 F59 L60 P52 |
| Date: | 2007–05 |
| URL: | http://d.repec.org/n?u=RePEc:wii:rpaper:rr:340&r=eec |
| By: | Carole Nakhle (Surrey Energy Economics Centre (SEEC), Department of Economics, University of Surrey) |
| Abstract: | In the 1980s and 1990s the North Sea emerged as a key non-OPEC oil producing province. Yet today overall production is declining, in both the British and Norwegian sectors and the big oil companies and investors are losing interest in what they now see as a mature province. But apparent maturity is not a bar to new prospects and new possibilities. This paper analyses not merely the still significant potential of the North Sea, but also the wider and increasingly attractive prospects offered by the opening up of the High North, the Barents Sea and part of the Arctic region – all areas of rapidly growing interest which are on Europe’s doorstep. Success will depend heavily on key questions such as the world oil price trend, technological advance and the structure of fiscal regimes for oil and gas extraction. But the opportunities are there and they could be to Europe’s great advantage. |
| Keywords: | North Sea, High North, Fiscal Regime, Oil Price, Mature Oil Province |
| Date: | 2007–10 |
| URL: | http://d.repec.org/n?u=RePEc:sur:seedps:119&r=eec |
| By: | Andrew Street (Centre for Health Economics, University of York); Kirsi Vitikainen; Afsaneh Bjorvatn; Anne Hvenegaard |
| Abstract: | We review and evaluate the international literature on activity-based funding of health services, focussing especially on experience in Australia (Victoria), Denmark, Norway and Sweden. In evaluating this literature we summarise the differences and pros and cons of three different funding arrangements, namely cost-based reimbursement, global budgeting and activity-based financing. The institutional structures of the four jurisdictions that are the main focus of the review are described, and an outline is provided about how activity-based funding has been introduced in each. We then turn to the mechanics of activity-based funding and discuss in detail how patients are classified, how prices are set and how other services are funded. Although concentrating on the four jurisdictions, we draw on wider international experience to inform this discussion. We review evidence of the impact of activity-based funding in the four jurisdictions on efficiency, activity rates, waiting times, quality and overall expenditure. Finally we conclude with a brief commentary of some of the challenges that would have to be faced if implementing activity-based funding. |
| Date: | 2007–10 |
| URL: | http://d.repec.org/n?u=RePEc:chy:respap:30cherp&r=eec |
| By: | Massimo Guidolin; Stuart Hyde |
| Abstract: | We use multivariate regime switching vector autoregressive models to characterize the time-varying linkages among short-term interest rates (monetary policy) and stock returns in the Irish, the US and UK markets. We find that two regimes, characterized as bear and bull states, are required to characterize the dynamics of returns and short-term rates. This implies that we cannot reject the hypothesis that the regimes driving the markets in the small open economy are largely synchronous with those typical of the major markets. We compute time-varying Sharpe ratios and recursive mean-variance portfolio weights and document that a regime switching framework produces out-of-sample portfolio performance that outperforms simpler models that ignore regimes. Interestingly, the portfolio shares derived under regime switching dynamics implies a fairly low committment to the Irish market, in spite of its brilliant unconditional risk-return trade-off. |
| Keywords: | Stock exchanges |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedlwp:2008-005&r=eec |
| By: | Rafael Boix Domenech (Departament d'Economia Aplicada, Universitat Autonoma de Barcelona) |
| Abstract: | El presente trabajo ofrece una comparación de los mapas de distritos industriales marshallianos de España e Italia, elaborados a partir de la metodología Sforzi - ISTAT (2006). Como principales similitudes se destaca que los distritos industriales son una realidad generalizada en ambos países y su importancia relativa es equivalente, se especializan principalmente en industria ligera y mecánica, y muestran una elevada concentración territorial. Como principales diferencias se destaca la mayor especialización relativa de los distritos industriales de España en productos para la casa e industria alimentaria, mientras que en Italia es superior la especialización relativa en industria mecánica, y en textil y confección; la menor dimensión de los distritos industriales españoles respecto de los italianos; y que los distritos industriales españoles tienen una dinámica positiva y superior a la del resto del país, mientras en Italia su dinámica negativa contrasta con la del resto de la economía. |
| Keywords: | distritos industriales marshallianos, mercados locales de trabajo, pequeñas y medianas empresas |
| JEL: | L60 R12 R23 |
| Date: | 2008–02 |
| URL: | http://d.repec.org/n?u=RePEc:uab:wprdea:wpdea0804&r=eec |
| By: | Nadja Dwenger |
| Abstract: | In Germany, the tax loss carry-forward of corporations significantly increased over the last decade. At the same time only a small percentage of losses have been effectively offset in the following periods. One potential reason for this puzzle is that stricter loss offset restrictions have been introduced in recent years. I use a newly developed micro simulation model for the corporate sector in Germany to evaluate the fiscal effects of these restrictions. Additionally, distributional breakdowns concerning the amounts of tax loss carry-forward and the effects of loss offset restrictions are provided. I find that the restrictions on the use of tax loss carryback are rather ineffective while the newly introduced minimum taxation considerably increases yearly tax revenue by 1.1 billion €. |
| Keywords: | Micro simulation, loss offset restrictions, corporate taxation, tax loss carryforward, tax loss carry-back, tax reform |
| JEL: | H25 C8 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp764&r=eec |
| By: | Manuel Bagues; Mauro Sylos Labini; Natalia Zinovyeva |
| Abstract: | This paper documents that grades vary significantly across Italian public universities and degrees. We provide evidence suggesting that these differences reflect the heterogeneity of grading standards. A straightforward implication of this result is that university funding schemes based on students' academic performance do not necessary favour universities that generate higher value added. We test this for the case of the Italian funds allocation system, which rewards universities according to the number of exams passed by their students. We find that university departments that rank higher according to this indicator actually tend to be significantly worse in terms of their graduates' performance in the labour market. |
| Date: | 2008–02 |
| URL: | http://d.repec.org/n?u=RePEc:fda:fdaddt:2008-07&r=eec |
| By: | Klinger, Sabine (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Wolf, Katja (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]) |
| Abstract: | "From 1992 to 2005, part-time employment in Western Germany has grown by 82 percent, whereas full-time employment has shrunk by 14 percent. Behind these general figures there is substantial variation of employment schemes across industries. Beside this, the share of the service industries in gross value added has grown, whereas the importance of manufacturing and construction has decreased considerably. We analyse the extent to which the changes in part-time and full-time employment can be explained by changes in the sectoral composition of the economy or by other factors. Using West German yearly data from 1992-2005, we estimate a regression analogue shiftshare model. It allows us to divide the overall development of employment into the business cycle effect, the sector effect and the employment status effect. Moreover, we control for sectoral gross value added, unit labour costs and working time. As a methodological contribution we extend the shift-share approach into a dynamic panel model. We use a bias-corrected least squares dummy variable (LSDVc) estimator which is appropriate for our data structure. As a second step, we decompose the fixed effects of the LSDVc estimation into parameters for part-time, full-time, and self-employment as well as six sectors. Our results confirm previous deterministic shift-share analyses: Characteristics inherent in full-time or part-time employment dominantly explain changes in employment patterns in Western Germany. The sectoral composition of the economy plays a significant but minor role. The model extensions reveal that much of the status and sector effects in the simple shiftshare analysis can be captured by determinants of labour demand." (author's abstract, IAB-Doku) ((en)) |
| Keywords: | Vollzeitarbeit - Determinanten, Teilzeitarbeit - Determinanten, Wirtschaftsstrukturwandel, Shift-Analyse, Arbeitskräftenachfrage, Westdeutschland, Bundesrepublik Deutschland |
| JEL: | C33 E24 J21 J23 |
| Date: | 2008–02–15 |
| URL: | http://d.repec.org/n?u=RePEc:iab:iabdpa:200807&r=eec |