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on Microeconomic European Issues |
|
Issue of 2016‒07‒30
thirty papers chosen by Giuseppe Marotta Università degli Studi di Modena e Reggio Emilia |
| By: | Nestor Duch-Brown (European Commission – JRC); Andrea de Panizza (European Commission – JRC); Ibrahim Kholilul Rohman (European Commission – JRC) |
| Abstract: | This paper adds to the empirical literature on the relationships between R&D, innovation and productivity at the firm level. The focus is on Spanish enterprises in Information industries, which are acknowledged to be at the forefront for both innovative activity and R&D performance. The analysis is performed on ca. 1800 enterprises included in the PITEC database (the Spanish source of the EU Community Innovation Survey) for the period 2004-2013. Using a three-stage "CDM" model we consider: (i) factors affecting the decision to conduct R&D, including the role of perceived importance of innovation on firm's R&D performance, (ii) the impact of the predicted R&D effort on companies' effective undertaking of product, process, organisational and marketing innovations, as well as their simultaneous occurrence and (iii) whether and to what extent such innovations boost productivity. In the specific context of this R&D intensive array of industries, the decision of undertaking R&D appears to be strongly influenced by the importance attributed to enhancing existing products or creating new ones, as well as by the size of the company, the fact of being young and local, and the availability public funding. These elements also greatly impact on enterprises' R&D effort, thus providing some arguments in favour of R&D promotion policies, in particularly addressed to start-ups. Expected R&D performance, in turn, appears to be strongly related to the actual achievement of such innovations, including non-technical ones. By focusing on innovation patterns, it was possible to ascertain a strong complementarity between different families of innovation (as expected, given these industries' specificities), as well as to qualify existing evidence on the innovation-productivity conundrum. Indeed, we show that results depend on the way innovation types are modelled and combined. Controlling for complementarities, enterprises performing focused non-technical innovations and joint technical and non-technical ones (mixed-mode innovators) are likely to be more productive (in terms of sales per capita) than their peers, while stand-alone technical innovations give inconclusive results. |
| Keywords: | R&D, innovation, ICT sector, productivity, firm level data, panel |
| JEL: | O00 O31 O32 O47 |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc101847&r=eur |
| By: | Vassilis Monastiriotis |
| Abstract: | The EU association framework provides European businesses with an entry advantage into the associated countries by facilitating production links and encouraging institutional convergence. It is believed that this has multiple beneficial effects for the associated countries, including ones related to productivity spillovers accruing to domestic firms. However, no empirical evidence exists to show that the presence of European firms produces larger productivity spillovers in recipient economies compared to firms from other world regions. We examine this question using firm-level data covering 28 transition countries over the period 2002-2009. We estimate the intra-industry productivity effects of foreign ownership and examine how these differ across regional blocks (CEE, SEE and ENP), by origin of investor (EU15 versus non-EU15), across geographical scales (national versus regional) and for different types of locations (capital-city regions versus the rest). Our results suggest that investments of EU origin play a distinctive role, helping raise domestic productivity in the associated countries unlike investments from outside the EU. However, this process operates in a spatially selective manner, potentially enhancing regional disparities and spatial imbalances. This assigns a particular responsibility for EU policy to devise interventions that will help redress these problems within its existing association framework. |
| Keywords: | EU neighbourhood; FDI spillovers; institutional proximity; regional disparities |
| JEL: | R14 J01 |
| Date: | 2016–06–24 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:66141&r=eur |
| By: | Paetzold, Jörg (University of Salzburg); Tiefenbacher, Markus (University of Salzburg) |
| Abstract: | Contrary to frequent recommendations of the public finance literature and international institutions, a persistently high tax wedge on labor is observed in Europe. At the same time, the scope for shifting taxes from labor to more growth-friendly revenue sources appears underused in many European countries. This motivates our simulation of a revenue-neutral property tax reform for Germany, a country in which tax receipts from land are particularly low. More precisely, we assess by how much social insurance contributions (SIC) can be reduced when Germany switches from its current property tax scheme based on outdated cadastral values to one based on market property values. In order to make such a simulation possible, we match property related information with the input dataset of EUROMOD, the tax-benefit simulation model for the EU. Our results suggest that the implicit tax rate on labor could be reduced from currently 37,2% to 36,5%. Furthermore, we simulate different scenarios of the SIC reduction. Redistributive effects of these different scenarios tend to be modest and depend crucially on the design of the SIC reduction. |
| Keywords: | Statistical Matching; Labor Tax; Property Tax; EUROMOD |
| JEL: | C15 C83 D31 H12 R28 |
| Date: | 2016–07–22 |
| URL: | http://d.repec.org/n?u=RePEc:ris:sbgwpe:2016_003&r=eur |
| By: | Adams, Zeno; Blickle, Kristian |
| Abstract: | Since house prices govern the consumption decisions of renters and owners alike, changing house prices can have far-reaching macroeconomic consequences. We analyze how the disposable income and consumption decisions of households are affected by exogenous house price changes in Switzerland. We look at consumption of both housing and non-durable goods to establish a comprehensive picture. We ensure that our house price variation is exogenous by instrumenting house prices with origin-shift immigration. Our unique dataset includes information on every immigrant that entered Switzerland between 1990 and 2013, house price data for every community, and detailed survey data for over 5000 households. We can show three things. Firstly, different types of immigrants influence house prices to different degrees. This finding allows us to structure a valid instrument while also contributing to an ongoing European discussion over the effects of immigration. Secondly, rising house prices reduce the disposable income of renters. This is particularly pronounced for renters who are forced to relocate in times of rising prices. We find, therefore, that renters consume less while owners do not necessarily consume more. This is different from the US/UK context and may reflect the inability of households to extract home equity in central Europe. Thirdly, households transition to ownership less frequently or move away more often following an exogenous price increase. We add novel insights on household consumption and tenure-/location choice in response to exogenous changes in the cost of housing. |
| Keywords: | immigration, home ownership, consumption, house prices, gentrification |
| JEL: | D14 D9 J61 R21 R23 |
| Date: | 2016–06 |
| URL: | http://d.repec.org/n?u=RePEc:usg:sfwpfi:2016:15&r=eur |
| By: | Andrea Cegolon (UCL Institute of Education) |
| Abstract: | Lifelong learning over the life course is becoming important in order to compete in a knowledge-based global economy. Adult education and Training (AET) are a possible strategy of adjusting the skills of the adult population to the needs of either the changing occupational structure and aging societies. Nevertheless, despite the importance of AET, empirical evidence on the topic is still scarce, particularly as regards the cross-national comparative research. In this sense, this paper aims to contribute to this field of studies by gaining a better understanding of how AET can influence the level of skills in individuals. In view of this, I use data from Programme for the International Assessment of Adult Competencies (PIAAC) to investigate four different countries - Italy, France, UK and Sweden - the influence of individual characteristics on participation in formal and non-formal AET on one side and, on the other, the effect of both different types of AET on the skills (literacy and numeracy) of adult individuals. The results from the four countries show that participation in both types of AET, on average, increases skills levels. I also found that, for both literacy and numeracy, on average the formal AET has a smaller impact on skills compared to non-formal AET. Another important finding is how the effect of learning activities varies across skills distribution: both of them take different trajectories in each of the countries selected. In conservative and southern countries, such as Italy and France, the effect of AET tend to be a bit unequal, being more efficient for groups of people at the top of the skill distributions, whereas, in Nordic and liberal countries, such as Sweden and the UK, the differences are less marked across all distributions, suggesting a fairer effect of both types of AET. |
| Keywords: | Adult Education and Training, Skills, Economics of Education, Cross-National Comparisons, PIAAC |
| JEL: | I26 |
| Date: | 2016–01–16 |
| URL: | http://d.repec.org/n?u=RePEc:qss:dqsswp:1511&r=eur |
| By: | François Rycx; Yves Saks; Ilan Tojerow |
| Abstract: | This paper is one of the first to estimate how the region in which an establishment is located affects its productivity, wage cost and cost competitiveness (i.e. its productivity-wage gap). To do so, we use detailed linked employer-employee panel data for Belgium and rely on methodological approaches from both Hellerstein and Neumark (1995) and Bartolucci (2014) to estimate dynamic panel data models at the establishment level. Our findings show that inter-regional differences in productivity and wages are significant but vanish almost totally, both in industry and services, when controlling for a wide range of covariates, establishment fixed effects and endogeneity. Thus, our results suggest that wage cost and productivity differentials are ceteris paribus relatively well aligned across regions. |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbb:reswpp:201606-300&r=eur |
| By: | Francesca Carta; Lucia Rizzica |
| Abstract: | We theoretically show that when mothers need to buy childcare services not only if they work but also if they want to search actively for a job, a reduction in the price of childcare will increase their likelihood of searching but may decrease their willingness to accept a job offer and therefore lower employment. We test these predictions empirically by means of a Regression Discontinuity design and find that the introduction in Italy of pre-kindergarten, a much cheaper alternative to day care for 2-year-old children, increased both participation in the labour market and employment of mothers of eligible children. This effect was driven largely by a significant decrease in the stated reservation wage. For a full evaluation of the policy we finally provide evidence that pre-kindergarten did not affect childrenÕs cognitive development as measured at second grade. Length: 56 pages |
| Keywords: | child care, female labour supply, public services |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=RePEc:don:donwpa:091&r=eur |
| By: | Fernanda Ricotta (Dipartimento di Economia, Statistica e Finanza, Università della Calabria) |
| Abstract: | This paper examines the effect of the quality of regional government (QoG) on firm Total Factor Productivity (TFP) in a multi-country context. The analysis is based on comparable cross-country data of manufacturing firms operating in seven European countries (Austria, France, Germany, Hungary, Italy, Spain and the United Kingdom). The measure of the ‘quality of government’ is the European quality of government index (EQI), calculated at regional level over twenty-seven EU members. To disentangle internal from external productivity drivers, the multilevel approach is employed. Results refer to 2008 and show, as expected, the importance of firm-specific determinants of TFP. As far as the specific scope of this paper is concerned, firms located in regions with high quality regional government show higher levels of TFP. When considering the QoG components, corruption and the quality of services positively affect TFP, while the evidence is inconclusive for impartiality. |
| Keywords: | Institutions, firm performance, European regions, multilevel model |
| JEL: | O43 D24 C30 |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=RePEc:clb:wpaper:201606&r=eur |
| By: | Alex Bryson (University College London, National Institute of Social and Economic Research and Institute for the Study of Labor) |
| Abstract: | This is the first paper to identify the correlates of workplace managers' perceptions of the health and safety risks faced by workers and the degree to which workers have control over those risks. The risks workers face and the control they have over those risks are weakly negatively correlated. Managerial risk ratings are positively associated with both injury and illness rates, but not with absence rates. The control rating is also positively associated with injury and illness rates, but it is negatively correlated with absence rates. Workers are more likely to be exposed to health and safety risks when their workplace is performing poorly and where it has been adversely affected by the recession. Union density is positively associated with risks but is not associated with worker control over risks. Having on-site worker representatives dealing with health and safety is linked to lower risks than direct consultation between management and employees over health and safety. However, there is no evidence that particular types of health and safety arrangement are related to worker control over health and safety risks. |
| Keywords: | Workplace safety; Working conditions; Unions |
| JEL: | J81 |
| Date: | 2016–03–30 |
| URL: | http://d.repec.org/n?u=RePEc:qss:dqsswp:1605&r=eur |
| By: | Federico Biagi (European Commission - JRC); Annarosa Pesole (European Commission - JRC); Juraj Stancik (European Commission - JRC) |
| Abstract: | This report was prepared in the context of the three-year research project on European Innovation Policies for the Digital Shift (EURIPIDIS). This project was jointly launched in 2013 by JRC-IPTS and DG CONNECT of the European Commission. It aims to improve understanding of innovation in the ICT sector and ICT-enabled innovation in the rest of the economy. In the context of the EURIPIDIS project, this report analyses innovative activities by ICT-producing firms and provides evidence on innovative activity in the ICT sector, compared to the overall economy. This analysis, based on a set of different indicators, aims to provide a deeper understanding of the modes of innovation adopted by ICT producing firms. To carry out the analysis, we created a panel dataset which matched the information collected by different Community Innovation Survey (CIS) waves from 2004 up to 2012 in twenty EU Member States. We then investigated the major innovation patterns that emerged, and compared the ICT sector to the whole economy. The main findings show that, in general, firms in the ICT sector tend to innovate more with respect to the economy as a whole: the shares of both innovators and technological innovators are consistently higher within the ICT sector than they are in the economy as a whole. Moreover, the ICT sector has a higher share of innovative firms which perform R&D and a higher share of Framework Programme-funded innovative firms. In order to capture the modes of innovation of ICT-producing firms, we used "complex" indicators that condense information from more than one measure and allow us to make multi-dimensional phenomena uni-dimensional. These complex indicators indicate that the share of international and domestic innovators is higher among ICT firms than it is in the economy as a whole. In other words, ICT firms tend to have a higher than average in-house R&D capability and are more likely to introduce new-to-the-market product or process innovations in both international and domestic markets. Looking at international or domestic "modifiers" (i.e. firms that mainly adopt and/or modify innovation made by others), we find no evidence that ICT-producing firms are more likely than the average firm to modify or adopt innovations developed elsewhere. |
| Keywords: | ICT sector, ICT-enabled innovation, ICT Innovation System, Community Innovation Survey |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc101636&r=eur |
| By: | Lerche, Katharina |
| Abstract: | This paper evaluates the effect of replacing traditional German five-year degrees with three-year bachelor programs on the duration until graduation and dropping out of university. Using an extensive dataset containing detailed administrative data on more than 9000 students, competing risks models are estimated. The results reveal that the Bologna process reduced the duration until graduation in absolute and relative terms, indicating that one of the reform´s main objectives was achieved. In addition, there is a favorable impact of being enrolled in a bachelor program on the probability of dropping out of university for students enrolled at the faculty of humanities. However, the results concerning university drop out are less conclusive for the other faculties. |
| Keywords: | tertiary education,Bologna process,bachelor,survival analysis,competing risks |
| JEL: | I21 I28 H75 J24 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:cegedp:287&r=eur |
| By: | Jens Sörvik (European Commission – JRC); Alexander Kleibrink (European Commission – JRC) |
| Abstract: | Information and Communication Technologies (ICTs) are major drivers of social and economic change. They are also one of the key Thematic Objectives (TOs) in the European Structural and Investment Fund (ESIF). The aim of these funds is to strengthen economic, social and territorial cohesion within the European Union. ICTs not only constitute an important sector themselves, but are also an important enabler of other sectors. This is why, analysis of ESIF data on planned ICT investments show EUR 12.2 billion encoded in the dedicated TO, but when ICT categories in other TOs are included, this amount almost doubles, to EUR 21.4 billion. Finding out more about the ICT investment plans of EU Member States and regions is not always a straightforward process. The available data for ESIF are structured in TOs and Categories of Intervention (CoIs); however, ICT investment often funds activities beyond the dedicated TOs and CoIs. To obtain a better picture of planned ICT investments, the European Commission Directorate General for Communications Networks, Content & Technology (DG CONNECT) and the JRC Institute for Prospective Technological Studies (JRC-IPTS) have developed an online tool to display planned ICT investment data on a regional basis. This tool will help EC officials, national and regional policymakers working on ICT issues, and beneficiaries of ESIF, to understand what kind of ICT activities are being planned in Europe. The ICT monitoring tool can be searched using a number of predefined filters, or searches of TOs and CoIs can be customised. The tool also contains a database of keywords built up by a semantic search for keywords in Operational Programmes (OPs). This database allows the user to identify OPs that mention a number of ICT activities more frequently than others, and to identify if a specific topic is mentioned in a region at all. The data set included in the tool is based on an in-depth study of individual OPs, as well as on aggregated data sets. When studying the available data, we found that Thematic Objective 2 (TO2) does not account for all planned ESIF investments in ICT. Using a broader set of CoIs, planned spending on ICT almost doubled, from 3.8 % to around 6.6 % of the combined total of European Regional Development Funds (ERDF), the European Social Fund (ESF), Cohesion Funds (CF) and European Agricultural Fund for Rural Development (EAFRD). However, it is likely that even this method fails to capture all planned investments, as respondents to our study indicated that substantial investments in ICT will be allocated to other categories, which would increase ESIF investments in ICT to EUR 35.5 billion. However, this estimate is not currently included in the tool, as the methods of estimating investments are not judged to be adequate. This range of different amounts of investment reflects the dual nature of ICT as an important sector and activity in itself, as well as an enabling technology in other public and private activities. Taking the moderate estimates, the EU Member States that plan by far the largest investments in ICT in absolute terms are Poland, Italy and Spain; the regions with the largest planned investments are Campania (IT), Sicilia (IT), Andalucía (ES), Slaskie (PL) and Puglia (IT). For example, the region of Campania plans to invest more ESIF in ICT than the whole of Germany. The greatest investments will be in broadband and ICT infrastructures (EUR 6.9 billion), e-Inclusion and digital skills (EUR 3.9 billion), e-Government (EUR 3.4 billion), and smart cities and smart grids (EUR 3.1 billion). To get a more in-depth view of future plans, we carried out a keyword search of ESIF data. Among the most frequently mentioned keywords are ICT innovation, e-Inclusion, broadband and digital content. This is partly because these keywords are broad and all-encompassing, but the findings also reflect the ambition of many regions to invest in ICT-based innovation activities. Quite substantial ICT investments will go to ICT-based innovation and digital content, but this will be listed under CoIs related to support of small and medium-sized enterprises (SMEs) and research and innovation, rather than the core CoIs for planned ICT investments. |
| Keywords: | ICT, digital growth, monitoring, smart specialisation, structural funds, data for public policy |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc102233&r=eur |
| By: | Effrosyni Adamopoulou (Bank of Italy); Emmanuele Bobbio (Bank of Italy); Marta De Philippis (Bank of Italy); Federico Giorgi (Bank of Italy) |
| Abstract: | Aggregate wages display little cyclicality compared with what a standard model would predict. Wage rigidities are an obvious candidate, but a recent strand of the literature has emphasized the need to take into account the growing importance of worker composition effects during downturns. With reference to the Italian case we document that firm composition effects also matter increasingly in explaining aggregate wage dynamics, i.e. aggregate wage growth has been raised by the increase in the employment weight of high-wage firms. To the extent that this reallocation occurs towards more productive firms, the composition effects may also reflect an efficiency enhancing mechanism. We use a newly available dataset based on social security records covering the universe of Italian employers from 1990 to 2013 and employ a standard measure of allocative efficiency on wages paid across firms. We show that this measure has improved progressively since before the recent downturn, being aligned at the sectoral level with measures of productivity growth and market openness to competition. We then focus on the recent downturn and find that large firms were able to adjust wages more than small firms and that small firms instead adjusted employment to a larger extent. Finally, we document that the continued improvement in the measure of allocative efficiency over this period correlates positively with measures of economic activity (evolution of employment and value added) across sectors. |
| Keywords: | Wage dynamics, allocative efficiency |
| JEL: | D22 J31 |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:opques:qef_340_16&r=eur |
| By: | Ayuso, Mercedes (University of Barcelona); Bravo, Jorge Miguel (Universidade Nova de Lisboa); Holzmann, Robert (University of New South Wales) |
| Abstract: | Heterogeneity in longevity between socioeconomic groups is increasingly documented for developed economies and is reviewed in the paper. Heterogeneity in life expectancy disaggregated by main socioeconomic characteristics – such as age, gender, race, health, education, profession, income, and wealth – is sizable and has not declined in recent decades. The prospects for future decline are not strong, either; perhaps even to the contrary. As heterogeneity is closely linked to income or earnings (i.e., the contribution base of earnings‐related social programs such as pensions) and as heterogeneity is empirically sizable, the result is major implicit taxes for some groups – particularly the less educated and low earners –and major subsidies for other groups – particularly highly educated individuals and high‐income earners. The implications for pension reform and scheme design are substantial as taxes/subsidies counteract the envisaged effects of (i) a closer contribution‐benefit link, (ii) a later formal retirement age to address population aging, and (iii) more individual funding and private annuities to compensate for reduced public generosity. |
| Keywords: | implicit tax, lifetime income, gender, life expectancy, implicit subsidy |
| JEL: | D9 G22 H55 J13 J14 J16 |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10060&r=eur |
| By: | Joachim Merz; Tim Rathjen |
| Abstract: | Entrepreneurs and freelancers, the self-employed, commonly are characterized as not only to be relatively rich in income but also as to be rich in time because of their time-sovereignty in principle. Our introducing study scrutinises these results and notions about the well-being situation of self-employed persons not only by asking about traditional single income poverty but also by considering time poverty within the framework of a new interdependent multidimensional (IMD) poverty concept. The German Socio-economic panel with satisfaction data serves as the data base for the population wide evaluation of the substitution/compensation between genuine, personal leisure time and income. The available detailed Time Use Surveys of 1991/92 and 2001/2 of the Federal Statistics Office provide the data to quantify the multidimensional poverty in all the IMD poverty regimes. Important result: self-employed with regard to single income poverty, single time poverty and interdependent multidimensional time and income poverty in both years are much more affected by time and income poverty than all other active persons defining the working poor. A significant proportion of non-income-poor but time poor of the active population are not able to compensate their time deficit even by an above poverty income. These people are neglected so far within the poverty and well-being discussion, the discussion about the “working poor” and in the discussion about time squeeze and time pressure in general and in particular for the self-employed as entrepreneurs and freelancers. |
| Keywords: | Liberal professions (Freie Berufe), entrepreneurs, self-employed, interdependent multidimensionaltime and income poverty, time and income substitution, extended economic well-being, satisfaction/happiness,CES welfare function estimation, working poor, German Socio-Economic Panel, German Time Use Surveys1991/02 and 2001/02 |
| JEL: | D31 D13 J22 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp851&r=eur |
| By: | Madden, D. |
| Abstract: | This paper examines developments in childhood and adolescent obesity in Ireland using two waves of the Growing Up in Ireland survey. Obesity appears to level off between the two waves though there is tentative evidence that the socioeconomic gradient, measured with respect to maternal education and family income, becomes steeper. Exploiting the longitudinal nature of the data, transitions into and out of obesity are examined, with higher rates of transition into obesity observed for those whose mothers have the lowest level of education. Decomposition of the concentration index with respect to income reveals a greater role for income related obesity mobility rather than obesity related income mobility. |
| Keywords: | obesity; socioeconomic gradient; longitudinal |
| JEL: | I12 I14 |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=RePEc:yor:hectdg:16/12&r=eur |
| By: | Christoph Böhringer (University of Oldenburg, Department of Economics, Germany); Florian Landis (ETH Zürich, Switzerland); Miguel Angel Tovar Reaños (Center for European Research (ZEW), Mannheim, Germany) |
| Abstract: | Over the last decade Germany has boosted renewable energy in power production by means of massive subsidies. The flip side are very high electricity prices which raises concerns that the transition cost towards a renewable energy system will be mainly borne by poor households. In this paper, we combine computable general equilibrium and microsimulation analysis to investigate the cost-effectiveness and incidence of Germany's renewable energy promotion. We find that the regressive effects of renewable energy promotion could be attenuated by alternative subsidy financing mechanisms which achieve the same level of electricity generation from renewable energy sources. |
| Keywords: | Renewable energy policy, feed-in tariffs, CGE, microsimulation |
| JEL: | Q42 H23 C63 |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=RePEc:old:dpaper:390&r=eur |
| By: | Pavel Ciaian (European Commission – JRC); d'Artis Kancs (European Commission – JRC); Maria Espinosa (European Commission – JRC) |
| Abstract: | Decoupled direct payments were introduced in the European Union (EU) by the 2003 CAP reform in form of the Single Payment Scheme (SPS) and the Single Area Payment System (SAPS). The 2013 CAP reform changed both the implementation of decoupled payments as well as its budget. We assess the possible effects of the 2013 CAP reform on the capitalization of decoupled payments in land rental values. Our estimates suggest that the CAP reform leads to an increase in the capitalization of decoupled payments by additional 16 cents for each EUR of decoupled payments relative to the pre-reform situation. However, there is a relatively large variation in the reform effects between MS particularly between Old Member States (OMS) and New MS (NMS). In NMS the capitalization rate slightly reduces from 76% in the pre-reform period to 72% in the post-reform period. Although, the rate is significantly lower in OMS, it almost doubles (from 20% to 39%) due to the reform. The main source of the post-reform capitalization in the EU are the entitlement stock changes accounting for 19% of total post-reform capitalization level, followed by the internal convergence of payments with 18%, the budget change (including external convergence) with 1%, and the differentiation of payments (redistributive payment) with -7%. Overall, our estimates suggest that on average in the EU, the non-farming landowners’ policy gains are 25% of total decoupled payments in the post-reform period compared to 17% in the pre-reform period. |
| Keywords: | Capitalization, Decoupled subsidies, CAP reform, Land market, Land prices, Land rents, SAPS, SPS, EU |
| JEL: | H22 Q11 Q18 |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc101619&r=eur |
| By: | Hummels, David (Purdue University); Munch, Jakob R. (University of Copenhagen); Xiang, Chong (Purdue University) |
| Abstract: | Increased job effort can raise productivity and income but put workers at increased risk of illness and injury. We combine Danish data on individuals' health with Danish matched worker-firm data to understand how rising exports affect individual workers' effort, injury, and illness. We find that when firm exports rise for exogenous reasons: 1. Workers work longer hours and take fewer sick-leave days; 2. Workers have higher rates of injury, both overall and correcting for hours worked; and 3. Women have higher sickness rates. For example, a 10% exogenous increase in exports increases women's rates of injury by 6.4%, and hospitalizations due to heart attacks or strokes by 15%. Finally, we develop a novel framework to calculate the marginal dis-utility of any non-fatal disease, such as heart attacks, and to aggregate across multiple types of sickness conditions and injury to compute the total utility loss. While the ex-ante utility loss for the average worker is small relative to the wage gain from rising exports, the ex-post utility loss is much larger for those who actually get injured or sick. |
| Keywords: | demand shocks, worker effort, health |
| JEL: | I1 F1 J2 F6 |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10036&r=eur |
| By: | Irene Mosca (TILDA, Trinity College Dublin); Robert E Wright (Department of Economics, University of Strathclyde) |
| Abstract: | Previous research suggests that taller individuals have greater cognitive ability. The aim of this paper is to empirically investigate whether the relationship between height and cognition holds in later-life using data from the first wave of The Irish Longitudinal Study on Ageing. Seven novel measures of cognition are used. These measures capture important aspects of cognition which are more likely to decline in old age, such as cognitive flexibility, processing speed, concentration and attention. It is found that height is positively and significantly associated with cognition in later-life also when education and early-life indicators are controlled for. The finding that adult height is a marker for nutrition and health environment experienced in early-life is widely accepted in the literature. The findings of this paper suggest that height might have a greater value added, as it appears to be a useful measure of unobserved childhood experiences. |
| Keywords: | cognition, height, ageing, early-life |
| JEL: | I1 J0 J1 |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=RePEc:str:wpaper:1611&r=eur |
| By: | Banks, James; Blundell, Richard; Levell, Peter; Smith, James P. |
| Abstract: | Our data indicate significantly steeper declines in nondurable expenditures in the UK compared to the US in spite of income paths at older ages exhibiting similar declines. We examine several possible causes, including different employment paths, housing ownership and expenses, levels and paths of health status, and out-of -pocket medical expenditures. Among all the factors we considered, we find that differences in levels, age paths, and uncertainty in medical expenses is the most likely reason for the steeper declines in nondurable expenses in the US compared to the UK. |
| JEL: | D12 D14 D91 |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:ran:wpaper:1100&r=eur |
| By: | Rebollo-Sanz, Yolanda Fatima (Universidad Pablo de Olavide); Rodríguez-Planas, Núria (Queens College, CUNY) |
| Abstract: | In the aftermath of the Great Recession, the Spanish government reduced the replacement rate (RR) from 60% to 50% after 180 days of unemployment for all spells beginning on July 15, 2012. Using Social Security data and a Differences-in-Differences approach, we find that reducing the RR by 10 percentage points (or 17%) increases workers' odds of finding a job by at least 41% relative to similar workers not affected by the reform. To put it differently, the reform reduced the mean expected unemployment duration by 5.7 weeks (or 14%), implying an elasticity of 0.86. We find strong behavioral effects as the reform reduced the expected unemployment duration right from the beginning of the unemployment spell. While the reform had no effect on wages, it did not decrease other measures of post-displacement job-match quality. After 15 months, the reform decreased unemployment insurance expenditures by 16%, about half of which are explained by job seekers' behavioral changes. |
| Keywords: | labor supply, financial incentives, unemployment insurance replacement rate, hazard function models, wages and job-match quality, forward-looking non-employed workers, longitudinal social security data |
| JEL: | C41 J64 |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10044&r=eur |
| By: | Chrysa Leventi; Manos Matsaganis |
| Abstract: | Estimating the impact of the crisis on income distribution requires up-to-date information. Due to the complexity of income surveys such as EU-SILC, income data usually become available with considerable delay. In this context, micro-simulation models are an appropriate and widely used alternative to bridge the gap in official data, allowing for an early evaluation of the distributional impact of changes in tax-benefit policies and in the wider economy. This paper analyses the effects of the Greek crisis on inequality and poverty in 2009-2014 using the micro-simulation model EUROMOD. Specifically, the paper updates earlier OECD estimates of distributional effects of the crisis in 2009-2012, and provides new estimates for 2013-2014, a period for which survey data are not yet publicly available. The results indicate that inequality, as measured by most indicators, rose in 2010-2013 as the recession deepened and unemployment rose, and fell back in 2014 as the economy stabilised. Relative poverty seems to have increased in 2012, after remaining broadly unchanged in the previous two years; in 2013 it appears to have stabilised, while in 2014 it fell back to only slightly above its level in 2010 (13.8% vs.13.2% respectively). This pattern is more pronounced when poverty is measured against an “anchored” benchmark: the proportion of population whose income fell below a poverty line anchored in pre-crisis terms increased steadily and steeply, until 2014 when it finally stabilised at 27.4% (from 13.2% in 2010). Not all population groups were affected evenly by recent developments: the rise of poverty in 2010-2013 especially affected the unemployed, the self-employed, the young, the middle-aged, families living in Athens, families paying rent or mortgage rather than outright owning their dwelling; on the contrary, relative poverty actually fell among groups traditionally seen as ‘poor’, such as farmers and the elderly – although in the latter case the relative improvement in terms of income may have been offset by difficulties in access to health care. The paper also assesses first-round effects of austerity policies on the income distribution given changes in the wider economy, i.e. abstracting from second-round effects associated with the deflationary impact of austerity on output. In this sense, early austerity policies per se appear to have had a small positive distributional impact, partly offsetting the increases in inequality and poverty due to the recession. As fiscal consolidation intensified in 2012, tax and benefit policies appear to have exacerbated the adverse distributional effects of the recession, causing poverty and inequality to rise further. From 2013, austerity policies seem to have had a more equalizing effect, especially at the bottom of the distribution and in terms of its distance from the top. This working paper relates to the 2016 OECD Economic Survey of Greece (www.oecd.org/eco/surveys/economic-survey-greece.htm). Estimer les effets de la crise grecque sur la distribution des revenus (2009-2014) La présente étude s’appuie sur des modèles de microsimulation afin d’actualiser les estimations réalisées par l'OCDE quant aux effets de la crise sur les inégalités et la pauvreté en Grèce en 2009-2012, et en produire de nouvelles pour 2013-2014. À l’aune de la plupart des indicateurs utilisés pour les mesurer, les inégalités se sont creusées en 2010-2013 parallèlement à l’aggravation de la récession et à la montée du chômage, pour reculer ensuite en 2014 à la faveur de la stabilisation de l’économie. Le taux de pauvreté relative semble avoir augmenté en 2012, après être resté globalement inchangé au cours des deux années précédentes. Il s’est ensuite stabilisé en 2013 pour retomber, en 2014, en deçà du niveau de 2012. Cette tendance est encore plus marquée lorsque la pauvreté est mesurée par rapport à un seuil « ancré ». Toutes les populations n’ont pas été touchées dans les mêmes proportions par l’aggravation de la pauvreté relative : la montée de la pauvreté en 2010-2013 a particulièrement touché les chômeurs, les travailleurs indépendants, les jeunes, les personnes d’âge moyen, les ménages résidant à Athènes, et les ménages qui paient un loyer ou remboursent un prêt immobilier. À l’inverse, la pauvreté relative a en fait reculé parmi les populations traditionnellement considérées comme « pauvres », comme les exploitants agricoles et les personnes âgées – même si, pour ces dernières, l’amélioration relative des revenus pourrait avoir été compensée par des difficultés d’accès aux services de santé. Il semble que les politiques d’austérité en elles-mêmes (hors effets de l’assainissement budgétaire sur la production) ont eu un modeste impact sur les inégalités et la pauvreté relative dans un premier temps, atténuant en partie les effets de la récession. Avec l’intensification de l’effort d’assainissement des finances publiques en 2012, les politiques fiscales et sociales semblent avoir favorisé une hausse de la pauvreté et des inégalités. Depuis 2013, les mesures d’austérité semblent avoir contribué à réduire les inégalités, surtout au bas de l’échelle de distribution des revenus et en termes d’écart entre le bas et le haut de la distribution. La part de la population dont le revenu est tombé sous le seuil de la pauvreté ancrée avant la crise a augmenté avec chaque cycle de mesures d’austérité, et la hausse régulière du chômage n’a fait qu’amplifier le mouvement, jusqu’en 2014 lorsqu’elle a fini par se stabiliser. Ce Document de travail se rapporte à l’Étude économique de l’OCDE de la Grèce 2016 (www.oecd.org/fr/eco/etudes/etude-econom ique-grece.htm). |
| Keywords: | taxation, poverty, labour market, inequality, distributional impact, impact distributif, marché du travail, inégalité, pauvreté, imposition |
| JEL: | D31 D63 E62 H22 I32 I38 |
| Date: | 2016–07–26 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:1312-en&r=eur |
| By: | Richard Blundell (Institute for Fiscal Studies and IFS and UCL); David Green (Institute for Fiscal Studies and University of British Colombia); Wenchao (Michelle) Jin (Institute for Fiscal Studies and Institute for Fiscal Studies) |
| Abstract: | Since the early-1990s the UK experienced an unprecedented increase in university graduates. The proportion of people with a university degree by age 30 more than doubled from 16% for born in 1965-69 to 33% for those born ten years later. At the same time the age profile of the graduate premium remained largely unchanged across cohorts. This paper first establishes the facts using a detailed analysis of micro-data on wage and employment patterns over the last two decades, benchmarked against the US economy. We then show that the stability of the age profile in the premium across different birth cohorts is unlikely to be explained by either composition changes or selection on unobservables. We also argue that it is inconsistent with skill-biased technical change affecting all advanced economies in the same way. We further rule out explanations based on factor price equalisation. Our resolution of the puzzle is a model in which increases in level of education induce firms to transit toward a decentralised technology in which decision-making is spread more widely through the workforce. We provide empirical support for this view. |
| Keywords: | Wage premium, education differential, skill biased technical change, general purpose technology. |
| Date: | 2016–06–17 |
| URL: | http://d.repec.org/n?u=RePEc:ifs:ifsewp:16/01&r=eur |
| By: | Marie Hyland (Department of Economics, Trinity College Dublin and Economic and Social Research Institute (ESRI)); Anna Alberini (Department of Agricultural and Resource Economics, University of Maryland); Seán Lyons (Economic and Social Research Institute (ESRI) and Trinity College Dublin) |
| Abstract: | This paper analyses the system of energy performance certificates in place in Ireland. We find that having a system with discrete energy-efficiency thresholds causes “bunching” among properties just on the more favorable side of the label cut-off points. This indicates that, in the region around the label thresholds, assessors tend to be extra lenient when evaluating the energy performance of dwellings. We examine possible reasons for this finding, including the market returns to energy efficiency using home sales data from the Irish property price register, and conclude that most likely assessors are trying to ingratiate homeowners to get repeat business. We find evidence of a partial “disconnect” between sellers' expectations and buyers' valuation of properties labeled as more efficient. |
| Keywords: | Residential energy efficiency; Energy Performance Certificates; Bunching |
| JEL: | Q40 Q48 R21 |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:tcd:tcduee:tep0516&r=eur |
| By: | Malo, Miguel Ángel; Martín-Román, Ángel L.; Moral, Alfonso |
| Abstract: | The current work seeks to ascertain whether rulings on dismissal cases issued by labour courts in Spain are influenced by whether incumbent judges are acting alone in their own court or sharing duties with other judges such as replacement judges, support judges or incumbent judges from other courts. In the approach used, more than one judge acting in a court is considered to be a treatment, and an analysis is conducted into the effect said treatment has had on the percentage of cases in which the judge has found in favour of the dismissed worker. The data used in the research are taken from the information recorded at court level provided by the statistics kept by the General Council of the Spanish Judiciary. A total of 2,888 observations were available, corresponding to the period spanning 2004 to 2012, and the information is the result of constructing a data panel from all the labour courts in Spain. As regards the findings, the percentage of cases ruled in favour of workers increases in line with the unemployment rate. More cases are also ruled in favour of workers during the crisis and in areas where the construction and industrial sector play a greater role. With regard to treatment as the central analysis variable, it may be concluded that there is a significant positive impact on the number of dismissal cases ruled in favour of workers when incumbent judges are not acting alone in their court. |
| Keywords: | Dismissal; Legal ruling; Labour court; Peer effects |
| JEL: | J65 K31 K41 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:72669&r=eur |
| By: | John Forth (National Institute of Social and Economic Research); Alex Bryson (University College London, National Institute of Social and Economic Research and Institute for the Study of Labor); Anitha George (National Institute of Social and Economic Research) |
| Abstract: | Across Europe, there are many differing opinions on whether workplace employee representation should be encouraged or discouraged. Yet there is very little evidence on the variations in workplace employee representation across Europe or the reasons for this. We use a workplace survey covering 27 EU countries to show that its incidence is strongly and independently correlated with the degree of centralization in a country's industrial relations regime and the extent of legislative support. Industry rents are also important in explaining trade union presence, but are unimportant in the case of works councils. Turning to the effects of workplace employee representation, we find support for the exit-voice model - traditionally associated with Anglo-Saxon regimes - whereby worker representation is associated with poorer perceptions of the employment relations climate and with lower voluntary quit rates. |
| Keywords: | Trade unions; Works councils; Employee representation; Social dialogue |
| JEL: | J51 J53 J83 |
| Date: | 2016–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:qss:dqsswp:1610&r=eur |
| By: | Schulte, Isabella; Heindl, Peter |
| Abstract: | We apply a quadratic expenditure system to estimate price and expenditure elasticities of residential energy demand (electricity and heating) in Germany. Using official expenditure data from 1993 to 2008, we estimate an expenditure elasticity for electricity of 0.3988 and of 0.4055 for space heating. The own price elasticity for electricity is -0.4310 and -0.5008 in the case of space heating. Disaggregation of households by expenditure and demographic composition reveals that the behavioural response to energy price changes is weaker (stronger) for low-income (top-income) households. There are considerable economies of scale in residential energy use but scale effects are not well approximated by the new OEDC equivalence scale. Real increases in energy prices show a regressive pattern of incidence, implying that the welfare consequences of direct energy taxation are larger for low income households. The application of zero-elasticities in assessments of welfare consequences of energy taxation strongly underestimates potential welfare effects. The increase in inequality is 22% smaller when compared to the application of rich and disaggregated behavioural response patterns as estimated in this paper. |
| Keywords: | energy consumption,price elasticities,expenditure elasticities |
| JEL: | D12 Q41 Q54 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:16052&r=eur |
| By: | Bilal Nasim (Institute of Education, University College London) |
| Abstract: | Between 1997 and 2008, approximately one million social housing dwellings in England were voluntarily transferred from local authority to housing association ownership. In exchange, housing associations were committed to managing, renewing and regenerating the stock of housing under their control. This paper is the first to investigate the impact of these large scale voluntary transfers (LSVTs) of social housing stock on the educational attainment of pupils. To address issues of endogeneity, I employ both a Difference-in-differences and a Difference-in-difference-in-differences approach. In London local authorities, LSVTs improved the average educational outcomes of pupils aged between 14 and 16 by approximately 1% and the outcomes of free school meal pupils aged between 14 and 16 by between 1% and 3.5%. The positive impact of LSVTs was smaller and less robust across Metropolitan local authorities, and there was no impact of LSVTs in Unitary local authorities. I find little or no improvement in the age 7 and 11 educational outcomes of pupils in local authorities which had conducted LSVTs. Overall, the results suggest that the LSVTs, and subsequent regeneration, of social housing stock improved the educational outcomes of pupils in London but not elsewhere. |
| Keywords: | Educational attainment; Social housing; Large Scale Voluntary Transfers |
| JEL: | I21 I28 |
| Date: | 2016–06–22 |
| URL: | http://d.repec.org/n?u=RePEc:qss:dqsswp:1609&r=eur |
| By: | Marco Di Cintio; Emanuele Grassi |
| Abstract: | This paper examines the implications of temporary migration episodes for two cohorts of Italian Ph.D.s. Special attention is given to the duration of experience abroad, its contribution to earned wages and the selectivity of returnees. After controlling for the endogeneity of both the migration decision and the length of stay abroad, we find positive returns to longer periods abroad and negative returns to shorter periods. Returnees are also found to be positively self-selected. The results are confirmed in several robustness and sensitivity checks. |
| Keywords: | skilled migration, return migration, migration premium, self-selection. |
| JEL: | J3 J61 F22 |
| Date: | 2016–01–15 |
| URL: | http://d.repec.org/n?u=RePEc:eei:rpaper:eeri_rp_2016_15&r=eur |