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on Microeconomic European Issues |
| By: | Stephen P Jenkins; Philippe Van Kerm |
| Abstract: | The current poverty rate and the persistent poverty rate are both included in the EU's portfolio of primary indicators of social inclusion. We show that there is a near-linear relationship between these two indicators across EU countries drawing on empirical analysis of EU-SILC and ECHP data. Using a prototypical model of poverty dynamics, we explain how the near-linear relationship arises and show how the model can be used to predict persistent poverty rates from current poverty information. In the light of the results, we discuss whether the EU's persistent poverty measure and the design of EU-SILC longitudinal data collection require modification. |
| Keywords: | Persistent poverty, income poverty, poverty, EU-SILC, Europe |
| JEL: | I32 D31 |
| Date: | 2013–03 |
| URL: | http://d.repec.org/n?u=RePEc:cep:sticas:/169&r=eur |
| By: | Ernest Miguelez (World Intellectual Property Organization, Economics and Statistics Division, Geneva, Switzerland) |
| Abstract: | The goal of this paper is to assess the influence of spatial mobility of knowledge workers on the formation of ties of scientific and industrial collaboration across European regions. Co-location has been traditionally invoked to ease formal collaboration between individuals and firms, since tie formation costs increase with physical distance between partners. In some instances, highly-skilled actors might become mobile and bridge regional networks across separate locations. This paper estimates a fixed effects logit model to ascertain precisely whether there exists a ‘previous co-location premium’ in the formation of networks across European regions. |
| Keywords: | inventors’ mobility, technological collaborations, co-location, European regions, panel data |
| JEL: | C8 J61 O31 O33 R0 |
| Date: | 2013–04 |
| URL: | http://d.repec.org/n?u=RePEc:wip:wpaper:7&r=eur |
| By: | Raquel Ortega-Argilés (IN+ Center for Innovation, Technology and Policy Research, Instituto Superior Técnico); Mariacristina Piva (DISCE, Università Cattolica); Marco Vivarelli (DISCE, Università Cattolica) |
| Abstract: | The purpose of this study is to investigate the relationship between a firm's R&D expenditures considered as an investment in knowledge, and its productivity, looking at sectoral peculiarities which may emerge; to this end, we use a large unique longitudinal database consisting of 1,809 US and European manufacturing and service firms over the period 1990-2008, for a total of 16,079 observations. Our main findings can be summarised as follows: knowledge stock has a significant positive impact on a firm's productivity, with an overall elasticity of about 0.10; this general result is largely consistent with findings presented in previous literature in terms of the sign, the significance and the estimated magnitude of the relevant coefficient. More interestingly, the coefficient turns out to be significantly larger in the service and high-tech sectors than in the non-high-tech manufacturing sectors. These outcomes suggest that firms in high-tech sectors are still ahead in terms of the impact on productivity of their R&D investments; moreover, a shift in favour of the service sectors seems to emerge. |
| Keywords: | R&D; Productivity; Knowledge stock; Panel data |
| JEL: | O33 L25 |
| Date: | 2013–03 |
| URL: | http://d.repec.org/n?u=RePEc:ctc:serie2:dises1390&r=eur |
| By: | Katrin Schmitz; Christoph Weber (Chair for Management Sciences and Energy Economics, University of Duisburg-Essen) |
| Abstract: | Germany’s nuclear phase out and an increasing share of fluctuating RES production amplifies the North-South congestion problem in the German electricity grid. But congestion management becomes a serious issue not only in the German but in the whole European electricity system as German wind production does not only affect the German grid. In theory it is well established that nodal pricing is the most efficient congestion management method. In literature the PJM well-established nodal market design often serves as a reference and is viewed as benchmark. To benefit from experiences made in the U.S. the transfer of the PJM market design to Germany could be advantageous. This article compares key elements of the generation mix, the network structure, the cross-border interconnection as well as the congestion situation of both electricity markets to assess potentials and impediments for an implementation of the PJM nodal market design in Germany. We show that both markets are less different in structure than expected but that large differences in performance respectively in congestion frequency lead probably to much lower welfare gains. Transfer of the PJM market design to Germany is possible in principle, but adjustments to RES would be ad-vantageous. |
| Keywords: | Nodal Pricing, Market Design, Electricity Markets |
| Date: | 2013–04 |
| URL: | http://d.repec.org/n?u=RePEc:dui:wpaper:1302&r=eur |
| By: | Francesco Bosello (University of Milan, Euro-Mediterranean Center on Climate Change, Fondazione Eni Enrico Mattei, Italy); Lorenza Campagnolo (Euro-Mediterranean Center on Climate Change, Fondazione Eni Enrico Mattei, Ca’ Foscari University of Venice, Italy); Carlo Carraro (Euro-Mediterranean Center on Climate Change, Fondazione Eni Enrico Mattei, Ca’ Foscari University of Venice, Italy); Fabio Eboli (Euro-Mediterranean Center on Climate Change, Fondazione Eni Enrico Mattei, Italy); Ramiro Parrado (Euro-Mediterranean Center on Climate Change, Fondazione Eni Enrico Mattei, Italy); Elisa Portale (Euro-Mediterranean Center on Climate Change, Fondazione Eni Enrico Mattei, Italy) |
| Abstract: | The reduction of GHG emissions is one of the most important policy objectives worldwide. Nonetheless, concrete and effective measures to reduce them are hardly implemented. One of the main reasons for this deadlock is the fear that unilateral actions will reduce a country’s competitiveness, and will benefit those countries where no GHG mitigation measures are implemented. This kind of argument is also often used to explain why some governments and many business leaders are not in favour of the EU 30% GHG mitigation target that has been proposed to replace the previous 20% GHG emission reduction objective approved by the EU within the well-known 20-20-20 climate and energy package. By developing and applying a recursive, dynamic, very detailed CGE model with energy generation from both fossil fuel and renewable sources, we address this issue by estimating the cost for different EU countries and industries of the EU climate and energy package under a set of alternative international scenarios on global GHG mitigation efforts. Results show that, thanks to the EU economic recession, achieving a 20% GHG emission reduction entails a moderate cost for the European Union - about 0.5% of EU GDP – even in the case of EU unilateral action. This cost could be reduced to almost zero if not only the European Union, but also the other major world economies, comply with the “low pledge” Copenhagen Accord. A 30% GHG emission reduction target would certainly be more costly: the total loss in the European Union would be 1.26% of EU GDP in the case of EU unilateral action, whereas the total cost would be 0.55% of EU GDP if all major economies reduce their own GHG emissions according to the “low pledge” Copenhagen Accord. Both border tax adjustments and free allocation of carbon permits are shown to be successful in reducing some adverse competitiveness effects of the EU GHG mitigation policy into energy intensive sectors, but at the expenses of the other economic sectors. |
| Keywords: | EU Climate Package, UNFCCC Conference of Parties, Kyoto Protocol, Computable General Equilibrium Analysis |
| JEL: | C68 Q43 Q48 Q54 |
| Date: | 2013–03 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2013.28&r=eur |
| By: | Hübler, Michael; Löschel, Andreas |
| Abstract: | We carry out a detailed CGE (Computable General Equilibrium) analysis of the EU Decarbonisation Roadmap 2050 on a macroeconomic and on a sectoral level. Herein, we study a Reference scenario that implements existing EU policies as well as 3 unilateral and 3 global climate action scenarios. We identify global climate action with international emissions trading and the ful l equalization of CO2 prices across all (EU) sectors as a reasonable policy option to avoid additional costs of the Decarbonisation Roadmap to a large extent. This policy option may include CDM (Clean Development Mechanism in the sense of 'where'-flexibility) in an extended form if there are countries without emissions caps. Moreover, we identify diverse sectoral effects in terms of output, investment, emissions and international competitiveness. We conclude that the successful realization of the EU Decarbonisation Roadmap probably requires a wise and joint consideration of technology, policy design and sectoral aspects. -- |
| Keywords: | EU,Decarbonisation Roadmap,Copenhagen Pledges,post Kyoto,energy-intensive sectors,competitiveness,leakage |
| JEL: | C68 F18 Q43 Q54 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:12055r&r=eur |
| By: | Markus Simeth (Ecole Polytechnique Fédérale de Lausanne (EPFL), College of Management, Switzerland); Julio Raffo (World Intellectual Property Organization, Economics and Statistics Division, Geneva, Switzerland) |
| Abstract: | Whereas recent scholarly research has provided many insights about universities engaging in commercial activities, there is still little empirical evidence regarding the opposite phenomenon of companies disseminating scientific knowledge. Our paper aims to fill this gap and explores the motivations of firms that disclose research outcomes in a scientific format. Besides considering an internal firm dimension, we focus particularly on knowledge sourcing from academic institutions and the appropriability regime using a cost-benefit framework. We conduct an econometric analysis with firm-level data from the fourth edition of the French Community Innovation Survey (CIS4) and matched scientific publications for a sample of 2,512 R&D performing firms from all manufacturing sectors. The analysis provides evidence that the access to important scientific knowledge imposes the adoption of academic disclosure principles, whereas the mere existence of collaborative links with academic institutions is not a strong predictor. Furthermore, the results suggest that overall industry conditions are influential in shaping the cost-benefit rationale of firms with respect to scientific disclosure. |
| Keywords: | R&D, Industrial Science, Knowledge Disclosure, University-Industry collaboration |
| Date: | 2013–04 |
| URL: | http://d.repec.org/n?u=RePEc:wip:wpaper:6&r=eur |
| By: | Lundgren, Tommy (CERE, Centre for Environmental and Resource Economics); Marklund, Per-Olov (CERUM, Centre for Regional Science); Samakovlis, Eva (National Institute of Economic Research); Zhou, Wenchao (CERUM, Centre for Regional Science) |
| Abstract: | How to significantly decrease carbon dioxide emissions has become one of the largest challenges faced by modern society. The standard recipe prescribed by most economists is to put a price on carbon, either through a tax or through emissions trading. Such measures can reduce emissions cost-effectively and create incentives for technological development. There is, however, a growing concern that the carbon prices generated through the European Union emission trading system (EU ETS) have been too low to create the incentives necessary to stimulate technological development. This paper empirically analyzes how the Swedish carbon dioxide tax and the EU ETS have affected productivity development in the Swedish pulp and paper industry 1998-2008. A Luenberger total factor productivity (TFP) indicator is computed using data envelopment analysis. How the policy measures affect TFP is assessed using a system generalized method of moments estimator. The results show that climate policy had a modest impact on technological development in the pulp and paper industry, and if significant it has been negative. The price on fossil fuels, on the contrary, seems to have created important incentives for technological development. Hence, results suggest that the carbon prices faced by the industry through EU ETS and the carbon dioxide tax have been too low. |
| Keywords: | CO2 tax; EU ETS; Luenberger productivity indicator; GMM |
| JEL: | D22 D24 Q54 Q55 Q58 |
| Date: | 2013–05–02 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:slucer:2013_004&r=eur |
| By: | Mulder, Machiel; Kuper, Gerard (Groningen University) |
| Abstract: | We estimate the contribution of institutional changes in the Dutch and German gas markets to the integration of these markets. We measure this contribution through the impact of bottlenecks in the cross-border infrastructure on cross-border price differences. In the period 2007-2011, the differences in both price levels and price volatility between these two markets decreased. We find evidence that institutional changes in the Dutch market, in particular the abolishment of the obligation to book quality-conversion capacity, have reduced the impact of cross-border infrastructure bottlenecks on regional price differences. The integration of German regional networks into larger systems, however, appear to have had a negative effect on the integration with the Dutch market. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:rugsom:13004-eef&r=eur |
| By: | Fatih Guvenen; Burhanettin Kuruscu; Serdar Ozkan |
| Abstract: | Wage inequality has been significantly higher in the United States than in continental European countries (CEU) since the 1970s. Moreover, this inequality gap has further widened during this period as the US has experienced a large increase in wage inequality, whereas the CEU has seen only modest changes. This paper studies the role of labor income tax policies for understanding these facts, focusing on male workers. We construct a life cycle model in which individuals decide each period whether to go to school, work, or stay non-employed. Individuals can accumulate skills either in school or while working. Wage inequality arises from differences across individuals in their ability to learn new skills as well as from idiosyncratic shocks. Progressive taxation compresses the (after-tax) wage structure, thereby distorting the incentives to accumulate human capital, in turn reducing the cross-sectional dispersion of (before-tax) wages. Consistent with the model, we empirically document that countries with more progressive labor income tax schedules have (i) significantly lower before-tax wage inequality at different points in time and (ii) experienced a smaller rise in wage inequality since the early 1980s. We then study the calibrated model and find that these policies can account for half of the difference between the US and the CEU in overall wage inequality and 84% of the difference in inequality at the upper end (log 90-50 differential). In a two-country comparison between the US and Germany, the combination of skill-biased technical change and changing progressivity of tax schedules explains all the difference between the evolution of inequality in these two countries since the early 1980s. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgfe:2013-20&r=eur |
| By: | Reto Odermatt; Alois Stutzer (University of Basel) |
| Abstract: | <p style="margin-bottom:0cm; margin-bottom:.0001pt; line-height: normal; text-autospace:none"><span style="font-family: "Arial","sans-serif"">The consequences of tobacco control policies for individual welfare are difficult to assess. We therefore evaluate the impact of smoking bans and cigarette prices on subjective well-being by analyzing data for 40 European countries and regions between 1990 and 2011. We exploit the staggered introduction of bans and apply an imputation strategy to study the effect of anti-smoking policies on people with different propensities to smoke. We find that higher cigarette prices reduce the life satisfaction of likely smokers. Overall, smoking bans are not related to subjective well-being, but increase the life satisfaction of smokers who recently failed to quit smoking. The latter finding is consistent with cue-triggered models of addiction and the idea of bans as self-control devices.</span> |
| Keywords: | Smoking bans, cigarette prices, life satisfaction, addiction, self-control, tobacco, control policies |
| JEL: | D03 D62 I18 K32 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:bsl:wpaper:2013/07&r=eur |
| By: | Luke Haywood; Martin Koning |
| Abstract: | Preferences for transport activities are often considered only in terms of time and money. Whilst congestion in automobile traffic increases costs by raising trip durations, the same is less obvious in public transport (PT), especially rail-based. This has lead many economic analyses to conclude that there exists a free lunch by reducing the attractiveness of automobile transport at no (or little) cost for PT users. This article argues that congestion in PT - crowding - is also costly. Using survey data from the Paris metro we estimate the degree to which users value comfort in terms of less crowding. Using a contingent valuation method (CVM) we describe marginal willingness to pay over different parts of the distribution of in-vehicle crowding and consider moderating factors. We conclude that the total welfare cost for a trip rises from e2.42 for a seated passenger to e3.69 under the most congested conditions. We apply our results to the cost-benefit analysis of a recent investment in PT in Paris and consider broader implications for transport policy. In particular, we highlight that PT congestion is a first-order urban externality. |
| Keywords: | Evaluation of non-market goods, travel comfort, crowding costs, contingent valuation method, Paris subway |
| JEL: | D6 H8 R4 L9 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1293&r=eur |
| By: | Pfeiffer, Friedhelm; Reuß, Karsten |
| Abstract: | The paper studies the power of educational investments in relation to transfers for fostering lifetime income and for reducing income inequality in Germany. The welfare analysis is based on a model of age-dependent human capital accumulation, featuring dynamic complementarities in skill formation over the life cycle, and calibrated for the period of ongoing demographic transition until 2080. If policy aims at reducing the inequality of lifetime income among people of the same generation, educational investments for people younger than or equal to seventeen do a better job compared to transfers in adulthood. In an intergenerational perspective all cohorts born after 1976 will gain from tax-financed additional investments in preschooleducation introduced in 2011. Additional investments into secondary education will, as a rule, not cause life time income to raise enough to compensate its costs. -- |
| Keywords: | early education,demographic change,inequality over the life span,redistributive policy |
| JEL: | D63 H55 I20 J11 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:13021&r=eur |
| By: | Laun, Tobias (Department of Economics, Uppsala University); Wallenius, Johanna (Dept. of Economics, Stockholm School of Economics) |
| Abstract: | In this paper we study the role of social insurance, namely old-age pensions, disability insurance and healthcare, in accounting for the differing labor supply patterns of older individuals across OECD countries. To this end, we develop a life cycle model of labor supply and health with heterogeneous agents. The key features of the framework are: (1) people choose when to stop working, and when/if to apply for disability and pension benefits, (2) the awarding of disability insurance benefits is imperfectly correlated with health, and (3) people can partially insure against health shocks by investing in health, the cost of which is dependent on health insurance coverage. We find that the incentives faced by older workers differ hugely across countries. In fact, based solely on differences in social insurance programs, the model predicts even more cross-country variation in the employment rates of people aged 55-64 than we observe in the data. |
| Keywords: | Life cycle; Retirement; Disability insurance; Health |
| JEL: | E24 J22 J26 |
| Date: | 2013–04–25 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:hastef:0744&r=eur |
| By: | V. Rekers, Josephine (CIRCLE, Lund University) |
| Abstract: | The design and construction of ESS is portrayed as an enormous injection of scientific infrastructure in the (innovation-based) economy of Lund, Skåne and the Øresund region. Innovation processes are however, inherently uncertain, unanticipated and non-linear, where investments do not directly and predictably lead to successful outputs. This chapter presents the theoretical underpinnings of localized knowledge spillovers, and demonstrates that the prospected local benefits associated with ESS are tied to the degree of embeddedness of the facility in regional knowledge networks that facilitate localized learning. This future scenario is challenged by the level of absorptive capacity of university and industry partners in the region, the presence of institutions that support an innovative milieu, and the multiplicity of ambitions set for ESS by the local, multi-national and global bodies. If actors in the regional economy are to take advantage of the opportunity that is associated with the technical design and construction of ESS in Lund, organizational and institutional features of an innovation milieu need to be prioritized. |
| Keywords: | Large research facilities; big science; agglomeration economies; knowledge spillovers; European Spallation Source (ESS) |
| JEL: | O31 R11 |
| Date: | 2012–10–02 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lucirc:2012_009&r=eur |
| By: | Domenico Depalo (Bank of Italy); Raffaela Giordano (Bank of Italy); Evangelia Papapetrou (Bank of Greece) |
| Abstract: | We evaluate the public-private wage differential in ten euro area countries for men in the period 2004-2007. Using the most recent methodologies on a Mincerian equation, we assess how much of the pay differential between public and private sector workers depends on differences in endowments and how much on differences in the remuneration of such skills. For the first time, we look at the contribution of specific covariates at different quantiles of the wage distribution and decompose the variance into an explained and an unexplained component. We find that the pay gap is often decreasing over the distribution, and it is mostly determined by higher endowments in the upper tail of the wage distribution and by higher returns of such endowments at the low tail, with considerable heterogeneity across countries. We further find that the wage distribution in the public sector is more compressed than in the private sector in some countries but not in all countries. This is the results, for all countries, of more dispersed distributions of endowments in the public sector and of returns in the private sector. |
| Keywords: | public employment, wage differentials, wage determination. |
| JEL: | H50 J31 J45 J50 |
| Date: | 2013–04 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:wptemi:td_907_13&r=eur |
| By: | Dachs, Bernhard; Peters, Bettina |
| Abstract: | This paper examines how foreign-owned and domestically owned firms transform innovation into employment growth. The empirical analysis, based on the model of Harrison, Jaumandreu, Mairesse and Peters (2008) and CIS data for 16 countries, reveals important differences between the two groups: Due to general productivity increases and process innovation, foreign-owned firms experience higher job losses than domestically owned firms. At the same time, employment- creating effects of product innovation are larger for foreignowned firms. Together with employment-stimulating effects stemming from existing products, they overcompensate the negative displacement effects resulting in net employment growth in foreign-owned firms. However, net employment growth turns out to be smaller in foreign-owned firms than in domestically owned firms. -- |
| Keywords: | employment,innovation,foreign ownership,Community Innovation Survey,host country effects |
| JEL: | O31 O33 F23 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:13019&r=eur |
| By: | Ludovica Gambaro; Kitty Stewart; Jane Waldfogel |
| Abstract: | This paper examines how the quality of formal early childhood education and care is associated with children's background. By using different indicators of quality, the research also explored how the relationship varies depending on the way quality is measured. The analysis combines information from three administrative datasets - the Early Years Census, the Schools Census and the Office for Standards in Education, Children's Services and Skills (Ofsted) dataset on inspections (2010-11). The results suggest that children from disadvantaged background have access to better qualified staff. However, services catering for more disadvantaged children are more segregated and receive poorer quality ratings from Ofsted, the national inspectorate. |
| Keywords: | Early childhood, Pre-school, childcare, Quality, Disadvantaged families |
| JEL: | I24 I38 J13 |
| Date: | 2013–03 |
| URL: | http://d.repec.org/n?u=RePEc:cep:sticas:/171&r=eur |
| By: | Zabel, Cordula (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]) |
| Abstract: | "This paper investigates employment effects of further vocational training, short classroom training, as well as One-Euro-Jobs for lone mothers receiving Unemployment Benefit II (UB II) in Germany. Lone mothers receiving UB II participate in these active labor market programs at very high rates. As soon as their youngest child is aged three or above, their program entry rates are as high as for childless singles. This paper examines whether lone mothers can actually profit from partici-pating in these programs, given low levels of childcare provision. The empirical analyses are based on administrative data. A timing-of-events approach is used to control for possible selectivity in program entries. Separate models are estimated for entries into minor employment, regular contributory employment in general, and regular contributory employment connected to a complete exit from benefit receipt. Findings are that lone mothers profit especially strongly from participating in vocational training programs in terms of entering regular contributory employment in general as well as regular contributory employment connected to a complete exit from benefit receipt. Presumably, they can particularly benefit from updating their job skills after interrupting their employment for some time to care for their children. Effects of short classroom training programs are somewhat smaller, and One-Euro-Jobs have small positive effects for some, but not all, groups of lone mothers." (Author's abstract, IAB-Doku) ((en)) |
| Keywords: | allein Erziehende, Mütter, Arbeitslosengeld II-Empfänger, arbeitsmarktpolitische Maßnahme - Erfolgskontrolle, Weiterbildungsförderung, Arbeitsgelegenheit, Trainingsmaßnahme, berufliche Reintegration |
| JEL: | J12 J68 I38 |
| Date: | 2013–04–16 |
| URL: | http://d.repec.org/n?u=RePEc:iab:iabdpa:201303&r=eur |
| By: | Leonardo Becchetti (University of Rome "Tor Vergata"); Massimo Ferrari (University of Rome "Tor Vergata"; Poste Italiane) |
| Abstract: | We analyse the impact of the introduction of the French Tobin tax on volumes, liquidity and volatility of affected stocks with parametric and non parametric tests on individual stocks, difference in difference tests and other robustness checks controlling for simultaneous month-of-the-year and size effects. Our findings document that the tax has a significant impact in terms of reduction in transaction volumes and intraday volatility. The reduction in volumes traded occurs in similar proportion in non taxed small cap stocks. |
| Keywords: | Financial Transaction Tax; intraday volatility; liquidity, transaction volumes |
| JEL: | G18 G12 G14 |
| Date: | 2013–03 |
| URL: | http://d.repec.org/n?u=RePEc:ent:wpaper:wp47&r=eur |