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on Microeconomic European Issues |
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Issue of 2012‒07‒01
seventeen papers chosen by Giuseppe Marotta University of Modena and Reggio Emilia |
| By: | D'Amuri Francesco; Giovanni Peri (Department of Economics, University of California Davis) |
| Abstract: | n this paper we analyze the impact of immigrants on the type and quantity of native jobs. We use data on fifteen Western European countries during the 1996-2010 period. We find that immigrants, by taking manual-routine type of occupations pushed natives towards more "complex" (abstract and communication) jobs. Such positive reallocation occurred while the total number of jobs held by natives was unaffected. This job upgrade was associated in the short run to a 0.6% increase in native wages for a doubling of the immigrants' share. These results are robust to the use of two alternative IV strategies based on past settlement of immigrants across European countries measured alternatively with Census or Labor Force data. The job upgrade slowed, but did not come to a halt, during the Great Recession. We also document the labor market flows behind it: the complexity of jobs offered to new native hires was higher relative to the complexity of lost jobs. Finally, we find evidence that such reallocation was significantly larger in countries with more flexible labor laws and that his tendency was particularly strong for less educated workers. |
| Keywords: | Immigration, Jobs, Task specialization, Employment Protection Laws, Europe |
| JEL: | J24 J31 J61 |
| Date: | 2012–06–19 |
| URL: | http://d.repec.org/n?u=RePEc:cda:wpaper:12-15&r=eur |
| By: | Alexander Schiersch; Heike Belitz; Martin Gornig |
| Abstract: | Previous research shows that technical progress at the industry level, measured by sectoral TFP growth, is more localized in continental European countries than in Anglo-Saxon countries. We use EU KLEMS data sets to decompose sectoral TFP for nine European countries by means of a Malmquist approach, in order to separate technical change. Applying Harberger diagrams, we describe the sectoral patterns of technical progress. The analysis reveals that in most European countries technological progress is much more evenly distributed across sectors than TFP. |
| Keywords: | TFP, Generalized Malmquist Productivity Index, sectoral technical change |
| JEL: | O14 O47 E23 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1217&r=eur |
| By: | Raffaele Paci; Emanuela Marrocu |
| Abstract: | Regional competitiveness, especially in the industrialised countries, is increasingly reliant on the availability of an adequate endowment of knowledge assets at the local level, like technological and human capital. These intangible factors enhance regional efficiency directly as inputs of the production function, but they also play a crucial role in allowing the territory to absorb the potential knowledge spillovers from the neighbouring regions. The aim of this paper is to analyse the role of the internal and external factors in determining the productivity level for a large set of regions belonging to the EU27 plus Norway and Switzerland. We estimate a Cobb-Douglas production function over the period 2000-2008 where, in addition to the traditional inputs of physical capital and units of labour, we consider innovation activities and human capital endowments as relevant knowledge assets. We also control for other geographical and industrial features of the regions. In order to take into account the commonly found geographic association across regions, our analysis is carried out within the spatial panel econometric framework. Main results, robust to a wide array of sensitivity checks, show that knowledge assets exhibit positive and significant coefficients and the impact of human capital on GDP is higher than the one found for technological capital in most of the estimated empirical models. Moreover, we find evidence of spatial spillovers directly associated with the two immaterial assets, which turn out to be much more effective in the regions of the 12 new accession countries with respect to all other European regions. The significant presence of such spillovers emphasizes the important role played by highly educated labour forces in increasing the regions’ absorptive capacity of new external knowledge and in ensuring its effective use in the production process. |
| Keywords: | knowledge; innovation; human capital; production function; spatial spillovers; European regions |
| JEL: | C23 O33 R11 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:cns:cnscwp:201213&r=eur |
| By: | Richard Ochmann; Frank Fossen |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwddc:dd64&r=eur |
| By: | Katri Kosonen (European Commission) |
| Abstract: | This paper first presents an overview of the various factors that in light of the economic literature should be taken into account in the analysis of tax incidence of environmental taxation. It then explores the main empirical findings, in particular those which make a distinction between the distributional effects of transport-related taxes and those of other environmental taxes. This includes also some less well-known evidence from the Nordic countries. In the final section it presents some recent evidence on the distributional impact of energy taxation in the EU member states included in the impact assessment of the revision of the European Union’s Energy Tax Directive. |
| Keywords: | European Union; taxation; environmental taxes, redistribution |
| JEL: | H23 |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:tax:taxpap:0032&r=eur |
| By: | Ortega, Francesc (Queens College, CUNY); Peri, Giovanni (University of California, Davis) |
| Abstract: | This paper makes two contributions to the literature on the determinants of international migration flows. First, we compile a new dataset on annual bilateral migration flows covering 15 OECD destination countries and 120 sending countries for the period 1980-2006. We also collect data on time-varying immigration policies that regulate the entry of immigrants for our destination countries over this period. Second, we extend the empirical model of migration choice across multiple destinations developed by Grogger and Hanson (2011) by allowing for unobserved individual heterogeneity between migrants and non-migrants. Our estimates show that international migration flows are highly responsive to income per capita at destination. This elasticity is twice as high for within-EU migration, reflecting the higher degree of labor mobility within the European Union. We also find that tightening of laws regulating immigrant entry reduce rapidly and significantly their flow. |
| Keywords: | international migration, labor movements, immigration policies |
| JEL: | F22 E25 J61 |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6655&r=eur |
| By: | Institute for Fiscal Studies |
| Abstract: | In December 2010, the Commission signed a contract for a retrospective evaluation of the consequences, in economic terms, of the functioning of the most pertinent elements of the current EU VAT system, as identified in the "Green Paper on the future of the VAT". The final report was submitted by the external consultants on 5 December 2011. This evaluation looked into the design and implementation of certain VAT arrangements, assessing their effectiveness and efficiency in terms of results and impacts they had created. It examined their relevance and their coherence with the smooth functioning of the single market and the requirement to avoid distortion of competition specified in Article 113 of the Treaty on the Functioning of the European Union. |
| Keywords: | European Union, taxation, VAT |
| JEL: | H25 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:tax:taxstu:0039&r=eur |
| By: | Ferrer, Jorge Núñez |
| Abstract: | What share of the EU’s collective GDP should the EU budget represent? 1%? 1.05%? 0.95%? A Task Force set up by CEPS to explore this question finds that the EU member states, once again, are locked in a pointless battle. Their report argues that the amount is not decisive when it comes to EU spending, but that quality matters far more than quantity. And it is on the quality side that the most significant improvements can be made. This report warns that obsession with net balances is bound to lead to bad decisions and exhorts Europe’s decision-makers to unleash the potential of the EU budget to make a significant contribution to long-term growth. To achieve this end, the report calls for enhanced investment in innovation, infrastructure that reinforces the single market and key European public goods, such as the management of environmental resources. |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:eps:cepswp:6648&r=eur |
| By: | Andrews, Martyn J. (University of Manchester); Gerner, Hans-Dieter (Institute for Employment Research (IAB), Nuremberg); Schank, Thorsten (University of Mainz); Upward, Richard (University of Nottingham) |
| Abstract: | Increases in standard hours have been a contentious policy issue in Germany. Whilst this might directly lead to a substitution of workers by hours, there may also be a positive employment effect due to reduced costs. Moreover, the response of firms differs between firms which offer overtime and those which do not. For a panel of German plants (2001-2006), we analyse the effect of increased standard hours on employment. Using difference-in-difference methods we find that, consistent with theory, overtime plants showed a significant positive employment response, whilst for standard-time plants there is no difference at all between plants which increased standard hours and those which did not. |
| Keywords: | working time, employment, plant-level data, difference-in-differences |
| JEL: | C23 J23 J81 |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6652&r=eur |
| By: | PriceWaterhouseCoopers |
| Abstract: | the Commission has instructed PwC to provide a review of the current tax provisions directed at the Financial Sector and financial instruments. The content of the Study is limited to the questions raised by the Commission in the questionnaires provided and is subject to certain limitations in terms of scoping as agreed by the Commission and detailed below in introduction of the respective Chapters. The Study covers 4 different Chapters, namely: Corporate Taxation of the Financial Sector – Banks, Value-Added Taxation of the Financial Sector, Labour Taxation in the Financial Sector, Taxation of Financial Instruments |
| Keywords: | European Union; taxation; financial transaction tax; financial activities tax;financial institutions |
| JEL: | G20 H21 H22 H23 H25 H27 |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:tax:taxpap:0031&r=eur |
| By: | Aparicio Fenoll, Ainhoa (Collegio Carlo Alberto); Oppedisano, Veruska (University College London) |
| Abstract: | In Southern Europe youngsters leave the parental home significantly later than in Northern Europe and United States. In this paper, we study the effect of a monthly cash subsidy on young adults' emancipation, family formation, and fertility. The subsidy, introduced in Spain in 2008, is conditional on young adults renting accommodation, and it amounts to almost 20 percent of the average youngsters' wage. Our identification strategy exploits the subsidy eligibility age threshold to assess the causal impact of the cash transfer. Difference-in-Differences and Regression Discontinuity estimates show that the policy increases emancipation rates by 0.9-2.3 percentage points, couple cohabitation by 1.2-2.4 percentage points, and the probability of having children by 4.8-8.1 percentage points for 22 year-olds compared to 21 year-olds. The effect is larger among young adults earning lower incomes and living in high rental price areas. This is consistent with the hypothesis that youngsters delay emancipation and family formation because they are budget constrained. |
| Keywords: | rental subsidy, conditional cash transfer, youth emancipation, family formation, fertility |
| JEL: | J1 H2 I3 |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6651&r=eur |
| By: | Bram Timmermans; Ron Boschma |
| Abstract: | This paper investigates the impact of labour mobility on plant performance in Denmark. Our study shows that the effect of labour mobility can only be assessed when one accounts for the type of skills that flow into the plant, and the degree to which these match the existing skills at the plant level. As expected, we found that the inflow of skills that are related to skills in the plant impacts positively on plant productivity growth, while inflows of skills that are similar to the plant skills have a negative effect. We used a sophisticated indicator of revealed relatedness that measures the degree of skill relatedness between sectors on the basis of the intensity of labour flows between sectors. Intra-regional mobility of skilled labour had a negative effect on plant performance, but the impacts of intra- and inter-regional mobility depended on the type of skills that flow into the plant. |
| Keywords: | labour mobility, revealed relatedness, plant performance, geographical proximity, related labour flows, Denmark |
| JEL: | J61 R11 |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:egu:wpaper:1213&r=eur |
| By: | Otto, Alkis Henri; Steinhardt, Max Friedrich |
| Abstract: | This paper provides new evidence on the effect of immigration on election outcomes. Our analysis makes use of data on city districts in Hamburg, Germany, during a period of substantial inflows of immigrants and asylum seekers. We find significant and robust effects for changes in foreigner shares on the electoral success of parties that built up a distinctive reputation in immigration politics. In particular, our fixed-effects estimates indicate a positive effect for xenophobic, extreme right-wing parties and an adverse effect for the Green party that actively campaigned for liberal immigration policies and minority rights. Overall, our results support the hypothesis that changes in local compositional amenities shape individual attitudes towards immigration. -- |
| Keywords: | immigration,elections,xenophobia |
| JEL: | D72 J15 R23 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:hsbawp:022012&r=eur |
| By: | Teusch, Jonas |
| Abstract: | This Policy Brief argues that pursuing the renewables objective could contribute to the completion of the internal electricity market, help to overcome opposition to transmission projects and decrease the market power of incumbents. Conversely, an integrated internal electricity market means less price volatility in specific regional markets, which allows for more efficient deployment and grid integration of renewables. Three sets of recommendations are proposed. |
| Date: | 2012–03 |
| URL: | http://d.repec.org/n?u=RePEc:eps:cepswp:6733&r=eur |
| By: | Ruding, H. Onno |
| Abstract: | This CEPS Policy Brief looks at the ways in which the euro crisis has impacted the successful functioning of the internal market of the EU and the state of play with respect to the creation of a common consolidated corporate tax base in corporate taxation. |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:eps:cepswp:6949&r=eur |
| By: | Virginie Coudert; Cécile Couharde; Valérie Mignon |
| Abstract: | Although nominal parities have been completely fixed within the euro area since the launch of the single currency, real effective exchange rates have continued to vary under the effect of inflation disparities, exhibiting a strong appreciation in the peripheral countries. In this paper, we assess real exchange rate misalignments for euro area countries by using a Behavioral Equilibrium Exchange Rate (BEER) approach on the period 1980-2010. The results show that the peripheral member countries have been suffering from increasingly overvalued exchange rates since the mid-2000s, as their real appreciation has not stemmed from improving fundamentals in terms of productivity or external position. In addition, currency misalignments have been increased on average for all euro area countries since monetary union, while becoming more persistent. More worryingly, our findings highlight different patterns across members, as misalignments have been larger and more persistent in peripheral countries than in core countries. |
| Keywords: | euro area, real equilibrium exchange rates, misalignments, panel cointegration |
| JEL: | F31 C23 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:drm:wpaper:2012-30&r=eur |
| By: | Antonio Nicita; Simona Benedettini |
| Abstract: | We empirically investigate the deterrent and offsetting effects of the introduction of a point–record driving license (PDRL) in Italy. We find that the PDRL resulted in a sharp reduction of seat belt offenses, and in a noticeable decrease of road accidents. However, the reduction in occupant fatalities and injuries was associated with an increase in non-occupant ones, suggesting a remarkable “Peltzman effect”. We then discuss whether a given enforcement design, by inducing drivers to make the best use of safety resources already available to them, may generate more external costs than would otherwise occur. |
| Keywords: | offsetting behavior, point - record driving license, seat belts, traffic law enforcement, traffic fatalities |
| JEL: | D02 K32 K42 L51 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:usi:wpaper:631&r=eur |