|
on Microeconomic European Issues |
| By: | Stephen Lecourt; Clement Palliere; Oliver Sartor |
| Abstract: | From Phase 3 (2013-20) of the European Union Emissions Trading Scheme, carbon-intensive industrial emitters will receive free allocations based on harmonised, EU-wide benchmarks. This paper analyses the impacts of these new rules on allocations to key energy-intensive sectors across Europe. It explores an original dataset that combines recent data from the National Implementing Measures of 20 EU Member States with the Community Independent Transaction Log and other EU documents. The analysis reveals that free allocations to benchmarked sectors will be reduced significantly compared to Phase 2 (2008-12). This reduction should both increase public revenues from carbon auctions and has the potential to enhance the economic efficiency of the carbon market. The analysis also shows that changes in allocation vary mostly across installations within countries, raising the possibility that the carbon-cost competitiveness impacts may be more intense within rather than across countries. Lastly, the analysis finds evidence that the new benchmarking rules will, as intended, reward installations with better emissions performance and will improve harmonisation of free allocations in the EU ETS by reducing differences in allocation levels across countries with similar carbon intensities of production. |
| Keywords: | European Union Emissions Trading Scheme, CO2 allowance allocation, Emissions-performance benchmarking |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:cec:wpaper:1302&r=eur |
| By: | Maja Adena; Michal Myck |
| Abstract: | Using a sample of Europeans aged 50+ from twelve countries in the Survey of Health, Ageing and Retirement in Europe (SHARE) we analyse the role of poor material conditions as a determinant of changes in health over a four-year period. We find that poverty defined with respect to relative incomes has no effect on changes in health. However, broader measures of poor material conditions such as subjective poverty or low relative value of wealth significantly increase the probability of transition to poor health among the healthy and reduce the chance of recovery from poor health over the time interval analysed. In addition to this the subjective measure of poverty has a significant effect on mortality, increasing it by 40.3% among men and by 58.3% among those aged 50-64. Material conditions matter for health among older people. We suggest that if monitoring of poverty in old age and corresponding policy targets are to focus on the relevant measures, they should take into account broader definitions of poverty than those based only on relative incomes. |
| Keywords: | health transitions, material conditions, poverty, mortality |
| JEL: | I14 I32 J14 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1319&r=eur |
| By: | Martin Huber; Michael Lechner; Conny Wunsch (University of Basel) |
| Abstract: | In this paper, we assess the impact of firms introducing part-time work schemes for gradual labour market exit of elderly workers on their employees’ labour market outcomes. The analysis is based on unique linked employer-employee data that combine high-quality survey and administrative data. Our results suggest that partial or gradual retirement options offered by firms are an important tool to alleviate the negative effects of low labour market attachment of elderly workers in ageing societies. |
| Keywords: | part-time work, elderly employees, treatment effects, matching |
| JEL: | J14 J26 C21 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:bsl:wpaper:2013/12&r=eur |
| By: | Mette Foged; Giovanni Peri |
| Abstract: | Using a database that includes the universe of individuals and establishments in Denmark over the period 1991-2008 we analyze the effect of a large inflow of non-European (EU) immigrants on Danish workers. We first identify a sharp and sustained supply-driven increase in the inflow of non-EU immigrants in Denmark, beginning in 1995 and driven by a sequence of international events such as the Bosnian, Somalian and Iraqi crises. We then look at the response of occupational complexity, job upgrading and downgrading, wage and employment of natives in the short and long run. We find that the increased supply of non-EU low skilled immigrants pushed native workers to pursue more complex occupations. This reallocation happened mainly through movement across firms. Immigration increased mobility of natives across firms and across municipalities but it did not increase their probability of unemployment. We also observe a significant shift in the native labor force towards complex service industries in locations receiving more immigrants. Those mechanisms protected individual wages from immigrants competition and enhanced their wage outcomes. While the highly educated experienced wage gains already in the short-run, the gains of the less educated built up over time as they moved towards jobs that were complementary to those held by the non-EU immigrants. |
| JEL: | F22 J24 J61 |
| Date: | 2013–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:19315&r=eur |
| By: | Nina LEHEYDA; Frank VERBOVEN |
| Abstract: | We study the effects of the car scrapping subsidies in Europe during the financial crisis. We make use of a rich data set of all car models sold in nine European countries, observed at a monthly level during 2005-2011.We employ a difference-in-differences approach, exploiting the fact that different countries adopted their programs at different points in time. We find that the scrapping schemes played a strong role in stabilizing total car sales in 2009: they prevented a total car sales reduction of 17.4% in countries with schemes targeted to low emission vehicles, and they prevented a 14.8% sales reduction in countries with non-targeted schemes. In contrast, the scrapping schemes only had small environmental benefits: without the schemes, average fuel consumption of new purchased cars would have been only 1.3% higher in countries with targeted schemes and 0.5% higher in countries with non-targeted schemes. We do not find evidence of crowding out due to substitution from non-eligible to eligible cars in countries with targeted schemes. Finally, we identify some competitive and trade effects from the schemes: domestic car producers benefited at the expense of foreign competitors in the countries where the schemes were not targeted. |
| Date: | 2013–08 |
| URL: | http://d.repec.org/n?u=RePEc:ete:ceswps:ces13.13&r=eur |
| By: | Bernhard Hammer; Alexia Prskawetz; Inga Freund |
| Abstract: | We investigate the reallocation of resources across age and gender in a comparative European setting. Our analysis is based on concepts and data from the National Transfer Accounts (NTA) project, as well as on data from income and time use surveys. We introduce the aggregate NTA life cycle deficit as a concept of an economic dependency ratio. This dependency measure allows for flexible age limits and age-specific levels of economic dependency. We then move beyond the current NTA methodology and study gender differences in the generation of income and extend our analysis by unpaid household work. We find large cross-country differences in the age- and gender-specific levels and type of production activities and consequently in the organisation of the resource reallocation across age. Our results clearly indicate that a reform of the welfare system needs to take into account not only public transfers but also private transfers, in particular the services produced within the households for own consumption (e.g. childcare, cooking, cleaning...). |
| Keywords: | Ageing, challenges for welfare system, demographic change, welfare state |
| JEL: | I38 J10 |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:feu:wfewop:y:2013:m:9:d:0:i:13&r=eur |
| By: | Joachim Merz; Bettina Scherg |
| Abstract: | A growing polarization of society accompanied with an erosion of the middle class experiences more and more attention at least in the German recent economic and social policy discussion. Our study contributes to the polarization discussion with respect to multidimensional theoretical measurement and empirical application in two ways: First, we propose extended multidimensional polarization indices based on a CES-type well-being function and present a new measure to multidimensional polarization, the mean minimum polarization gap 2DGAP. This polarization intensity measure provides transparency with regard to each singular attributes – important for targeted policies – and ensures at the same time its interdependent relations. Second, the empirical application – in addition to the traditional income measure – incorporates time as a fundamental resource for any activity. In particular, genuine personal leisure time will take care of social participation in the spirit of social inclusion/exclusion and Amartya Sen’s capability approach. Instead of arbitrarily choosing the attributes’ parameters in the CES well-being function the interdependent relations of time and income will be evaluated by German Society. With the German Socio-Economic Panel (SOEP) and detailed time use diary data of the available German Time Use Survey (GTUS) 1991/92 and 2001/02 we quantify available and extended multidi-mensional polarization measures as well as our new approach for the polarization development of the working poor and the working rich in Germany. Results: Genuine personal leisure time in addition to income is an important polarization attribute. Compensation is of economic and static significance. In particular supported by the new minimum 2DGAP approach, multidimensional polarization increased over that decade in Germany. |
| Keywords: | Multidimensional polarization, intensity of time and income poverty and affluence, interdependent multidimensional time and income poverty and affluence, minimum multidimensional polarization gap (2DGAP), extended economic well-being, satisfaction/ |
| JEL: | I32 D31 J22 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp574&r=eur |
| By: | International Monetary Fund. European Dept. |
| Keywords: | Bilateral trade;Germany;Czech Republic;Hungary;Poland;Slovak Republic;Central and Eastern Europe;Manufacturing sector;Exports;Trade integration;Staff Reports;Background papers; |
| Date: | 2013–08–20 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfscr:13/263&r=eur |
| By: | Barrett, Alan (ESRI, Dublin); Mosca, Irene (Trinity College Dublin); Whelan, Brendan J. (Trinity College Dublin) |
| Abstract: | Governments are increasingly concerned about the capacity of pensions systems to meet demands in the coming years. According to the OECD, one part of the policy response in many countries will be greater private provision on the part of individuals through occupational and other pension arrangements. If such a strategy is to work, it requires that individuals are well-informed about pensions. However, there are many reasons to believe that individuals may not be well-informed due to the complexity of pensions systems and degrees of myopia. In this paper, we assess levels of knowledge of pensions using a representative sample of older Irish people. Looking at people who are enrolled in pension schemes, we find that two thirds of these people do not know what amount will be paid out on retirement and/or whether the payments will be in the form of lump-sums, monthly payments or both. Women are more likely not to know, as are people with lower levels of education. While one policy conclusion might be to direct pensions-related information at certain groups, another approach might be to extend the mandatory elements in pension systems such as contribution rates. |
| Keywords: | pensions, knowledge, older workers |
| JEL: | I38 J14 |
| Date: | 2013–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7596&r=eur |
| By: | Egger, Peter; Lassmann, Andrea |
| Abstract: | This paper studies the causal effect of sharing a common native language on international trade. Switzerland is a multilingual country that hosts four official language groups of which three are major (French, German, and Italian). These groups of native language speakers are geographically separated, with the corresponding regions bordering countries which share a majority of speakers of the same native language. All of the three main languages are understood and spoken by most Swiss citizens, especially the ones residing close to internal language borders in Switzerland. This unique setting allows for an assessment of the impact of common native (rather than spoken) language as a cultural aspect of language on trade from within country-pairs. We do so by exploiting the discontinuity in various international bilateral trade outcomes based on Swiss transaction-level data at historical language borders within Switzerland. The effect on various margins of imports is positive and significant. The results suggest that, on average, common native language between regions biases the regional structure of the value of international imports towards them by 18 percentage points and that of the number of import transactions by 20 percentage points. In addition, regions import 102 additional products from a neighboring country sharing a common native language compared to a different native language exporter. This effect is considerably lower than the overall estimate (using aggregate bilateral trade and no regression discontinuity design) of common official language on Swiss international imports in the same sample. The latter subsumes both the effect of common spoken language as a communication factor and of confounding economic and institutional factors and is quantitatively well in line with the common official (spoken or native) language coefficient in many gravity model estimates of international trade. |
| Keywords: | Common language; Culture; International trade; Quasi-randomized experiments; Regression discontinuity design |
| JEL: | C14 C21 F14 R12 Z10 |
| Date: | 2013–04 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:9441&r=eur |
| By: | Badinger, Harald; Egger, Peter; von Ehrlich, Maximilian |
| Abstract: | This paper assesses the strength of productivity spillovers non-parametrically in a data-set of 12 industries and 231 NUTS2 regions in 17 European Union member countries between 1992 and 2006. It devotes particular attention to measuring catching up through spillovers depending on the technology gap of a unit to the industry leader and the local human capital endowment. We find evidence of a non-monotonic relationship between the technology gap to the leader as well as human capital and growth. Spillovers are strongest for units with a small technology gap to the leader and with abundant human capital. |
| Keywords: | Absorptive capacity; Nonparametric estimation; Technology spillovers; Total factor productivity |
| JEL: | C14 N10 N14 O33 O47 R11 |
| Date: | 2013–04 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:9425&r=eur |
| By: | Bartolucci, Cristian (Collegio Carlo Alberto); Devicienti, Francesco (University of Turin) |
| Abstract: | We propose a simple test that uses information on workers' mobility, wages and firms' profits to identify the sign and strength of assortative matching. The basic intuition underlying our empirical strategy is that, in the presence of positive (negative) assortative matching, good workers are more (less) likely to move to better firms than bad workers. Assuming that agents' payoffs are increasing in their own types, our test exploits within-firm variation on wages to rank workers by their types and firm profits to rank firms. We use a panel data set that combines social security earnings records for workers in the Veneto region of Italy with detailed balance-sheet data for firms. We find robust evidence that positive assortative matching is pervasive in the labor market. This result is in contrast with what we find from correlating the worker and firm fixed effects in standard Mincerian wage equations. |
| Keywords: | assortative matching, worker mobility, wages, profits, matched employer-employee data |
| JEL: | J6 J31 L2 |
| Date: | 2013–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7601&r=eur |
| By: | Federico Etro (University of Venice, Ca� Foscari, Italy); Silvia Marchesi (University of Milan, Bicocca, Italy); Laura Pagani (University of Milan, Bicocca, Italy) |
| Abstract: | We analyze the labor market for painters in Baroque Rome using unique panel data on primary sales of portraits, still lifes, genre paintings, landscapes and figurative paintings. In line with the traditional artistic hierarchy of genres, average price differentials between them were high. The matched painter-patron nature of the dataset allows us to evaluate the extent to which price heterogeneity is related to unobservable characteristics of painters and patrons. We find that the market allocated artists between artistic genres to the point of equalizing the marginal return of each genre. We explain residual price differences at the employer level in terms of incentive mechanisms to induce effort in the production of artistic quality and compensating wage differentials. |
| Keywords: | Inter-industry wage differentials, Matched employer-employee data, Occupational choice, Art market |
| JEL: | C23 D8 J3 Z11 |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:cue:wpaper:awp-03-2013&r=eur |
| By: | Hudson, Eibhlin (Trinity College Dublin); Barrett, Alan (ESRI, Dublin) |
| Abstract: | Research has shown that employment status, such as being unemployed or retired, can be related to well-being. In addition, the direction and size of these relationships can be influenced by the employment status of one's peer group. For example, it has been shown that the well-being of the unemployed tends to be higher for those living in high-unemployment areas compared to the unemployed living in low-unemployment areas. In this paper, we explore whether such employment peer effects impact upon the well-being of older workers. This is an important issue in the context of promoting longer working lives. If the well-being of older people in employment is lowered by low employment levels in their peer group, then sustaining high employment among older workers will be more difficult. We use data from the Irish Longitudinal Study on Ageing (TILDA) which is a nationally representative sample of people aged fifty and over and living in Ireland, collected between 2009 and 2011. Employment peer effects are proxied using the peer group non-employment rate where a peer is defined as someone in the same age-group and region and of the same gender. We find that for the employed, an increase in peer non-employment is associated with an increase in reported depressive symptoms, whereas for those not employed such an increase is associated with a decrease in reported depressive symptoms. However, these findings hold mainly for men. |
| Keywords: | peer groups, well-being, older adults |
| JEL: | I10 J26 C21 |
| Date: | 2013–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7586&r=eur |
| By: | Grossi, Luigi (Verona University); Waterson, Michael (University of Warwick) |
| Abstract: | The German response to the Fukushima nuclear power plant incident was possibly the most significant change of policy towards nuclear power outside Japan, leading to a sudden and very significant shift in the underlying power generation structure in Germany. This provides a very useful natural experiment on the impact of changing proportions of conventional fuel inputs to power production, helping us to see how changed proportions in future as a result of policy moves in favour of renewables are likely to impact. We find through exploration of a conventional demand- supply framework that despite the swift, significant change, the main impact was a relatively modest increase in prices occasioned by a shift of the supply curve; there were no appreciable quantity effects on the market, such as power outages, despite some views that the impacts would be significant. |
| Keywords: | Atomausstieg; Demand-supply framework; German power market; nuclear power; renewables |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:cge:warwcg:156&r=eur |
| By: | Lee, Neil; Rodríguez-Pose, Andrés |
| Abstract: | The creative industries have long been seen as an innovative sector. More recent research posits that creative occupations are also a fundamental, but overlooked, driver of innovation. Theory also suggests cities are important for both creative industries and occupations, with urban environments helping firms innovate. Yet little empirical work has considered the links between creative industries, occupations, cities and innovation at the firm level. This paper addresses this gap using a sample of over 9,000 UK SMEs. Our results stress that creative industries firms are more likely to introduce original product innovations, but not those learnt from elsewhere. Creative occupations, however, appear a more robust general driver of innovation. We find no support for the hypothesis that urban creative industries firms are particularly innovative. However, creative occupations are used in cities to introduce product innovations learnt elsewhere. The results suggest future work needs to seriously consider the importance of occupations in empirical studies of innovation. |
| Keywords: | Cities; Creative industries; Creative occupations; Innovation; Learning |
| JEL: | O31 O38 R11 R58 |
| Date: | 2013–08 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:9598&r=eur |
| By: | Daxbek, Vincent; Estache, Antonio |
| Abstract: | The main purpose of this paper is to provide an assessment of the impact of the introduction of an alternative minimum tax (AMT) in Belgium with a focus on the impact on various distortions margins. In the process, we provide an up-to date account of the state of effective corporate taxation in the country. The current ETR is 15.7%. For a 1% of GDP increase in revenue, the ETR of an income based AMT would increase to 24.3% illustrating the potential payoff of a significant simplification of the current system. For a politically viable asset based AMT, it would roughly double the ETR. An income based AMT would somewhat reduce the distortions across sectors and firms sizes while an asset based AMT would increase it. As expected, an asset based AMT would penalize more large firms since they are more capital intensive. Small firms could actually be better off under an asset based AMT than under an income based AMT. But any decision on the AMT in Belgium is likely to be polarizing. Small firms currently represent 84% of the number of businesses, 35% of the jobs and 22.4% of the tax revenue. Large and very large firms represent less than 4% of the number of business but almost 50% of the jobs and over 60% of the tax revenue. |
| Keywords: | alternative minimum taxes; Belgium; corporate taxes; effective tax rates; presumptive taxation; tax avoidance |
| JEL: | H20 H25 H26 H32 |
| Date: | 2013–05 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:9481&r=eur |
| By: | Habibi, Shiva (KTH); Sundberg, Marcus (KTH); Karlström, Anders (KTH) |
| Abstract: | In this paper we analyze the prediction problem and focus on building a multinomial logit model (MNL) to predict accurately, the market shares of new cars in the Swedish car fleet in the short-term future. Also, we investigate whether or not different prediction questions lead to different 'best' models specifications. Most of the studies in the field, take an inference-driven approach to select best models to estimate relevant parameters and project the results to the future, whereas we do take a prediction-driven approach. We use feature (variable) selection and cross-validation algorithms to improve predictive performance of models. These methods have been extensively used in other fields such as marketing but are scarce studies employing them in the choice modeling field. Additionally, we introduce four different prediction questions or loss-functions: overall prediction (log-likelihood), brand market share, ethanol (E85)/brand market share, and total share of ethanol cars and the predicted results of these models are compared. The results show that 'best' models prediction depend different prediction questions to answer. Also, they indicate that log-likelihood does not perform accurately when the objective is to predict a sub-section of population such as total share of E85 cars. |
| Keywords: | Hold-out sample; Out of sample prediction; Feature selection; Cross validation; Model selection; Car type choice; Discrete choice modeling; Clean vehicles |
| JEL: | R41 |
| Date: | 2013–09–16 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ctswps:2013_013&r=eur |
| By: | Elish Kelly; Seamus McGuinness; Philip O’Connell; David Haugh; Alberto González Pandiella |
| Abstract: | Young people have been hit hard by unemployment during the Irish recession. While much research has been undertaken to study the effects of the recession on overall labour market dynamics, little is known about the specific effects on youth unemployment and the associated challenges. This paper attempts to fill this gap by comparing the profile of transitions to work before the recession (2006) and as the economy emerged from the recession (2011). The results indicate that the rate of transition of the youth from unemployment to employment fell dramatically. The fall is not due to changes in the composition or the characteristics of the unemployed group but to changes in the external environment, which implied that the impact of certain individual characteristics changed over the course of the recession. In particular, for youth, education and nationality have become more important for finding a job in Ireland. Les transitions de périodes de chômage et emploi parmi les jeunes dans la récession irlandaise Les jeunes ont été durement frappés par le chômage pendant la récession irlandaise. Beaucoup de recherches ont été menées pour étudier les effets de la récession sur la dynamique globale du marché du travail, mais on sait peu de ses effets spécifiques sur le chômage des jeunes et les défis associés. Cet article tente de combler cette lacune en comparant le profil des transitions vers le travail avant la récession (2006) et au moment où l'économie a émergé de la récession (2011). Les résultats indiquent que le taux de transition des jeunes du chômage à l'emploi a diminué de façon spectaculaire. La chute n'est pas due à des changements dans la composition ou les caractéristiques du groupe des chômeurs, mais à des changements dans l'environnement externe, ce qui implique que l'impact de certaines caractéristiques individuelles a changé au cours de la récession. En particulier, pour les jeunes, l'éducation et la nationalité sont devenus plus importants pour trouver un emploi en Irlande. |
| Keywords: | Ireland, youth unemployment, Great recession, longitudinal data, transitions, decomposition techniques, techniques de décomposition, Grande récession, chômage des jeunes, transitions, données longitudinales |
| JEL: | E24 J21 J61 J64 |
| Date: | 2013–08–16 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:1084-en&r=eur |
| By: | Coricelli, Fabrizio; Ravasan, Farshad R; Wörgötter, Andreas |
| Abstract: | The surge in the German current account surplus in the 2000s is often interpreted as the result of efficiency-enhancing structural reforms, especially in the labor market. However, this interpretation is puzzling because the growth rate of the German economy has been one of the lowest in the Euro area in the 2000s. Using empirical evidence and a simple theoretical two-sector model, the paper argues that the German surplus is closely linked to the increasing gap between productivity growth in manufacturing and services. Such gap is due not only to improvements in the manufacturing sector but also to a significant slowdown of productivity growth in services. Therefore, despite the success in export markets, the German surplus may signal long-run weaknesses associated with constraints on service growth and the inability of productivity growth in manufacturing to create positive spill-over effects on services. Persistence of barriers to liberalization in services may partly explain these phenomena. The paper concludes that higher and more balanced growth could lead to an equilibrium reduction of the current account surplus. |
| Keywords: | German current account surplus; structural change; unbalanced productivity change |
| JEL: | E21 E22 F31 F41 O40 |
| Date: | 2013–06 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:9527&r=eur |