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on Microeconomic European Issues |
| By: | Nicola Gagliardi; Elena Grinza; François Rycx |
| Abstract: | In this paper, we investigate the impact of rising temperatures on firm productivity using longitudinal firm-level balance-sheet data from private sector firms in 14 European countries, combined with detailed weather data, including temperature. We begin by estimating firms’ total factor productivity (TFP) using control-function techniques. We then apply multiple-way fixed-effects regressions to assess how higher temperature anomalies affect firm productivity – measured via TFP, labor productivity, and capital productivity. Our findings reveal that global warming significantly and negatively impacts firms’ TFP, with the most adverse effects occurring at higher anomaly levels. Labor productivity declines markedly as temperatures rise, while capital productivity remains unaffected – indicating that TFP is primarily affected through the labor input channel. Our moderating analyses show that firms involved in outdoor activities, such as agriculture and construction, are more adversely impacted by increased warming. Manufacturing, capital-intensive, and blue-collar-intensive firms, compatible with assembly-line production settings, also experience significant productivity declines. Geographically, the negative impact is most pronounced in temperate and mediterranean climate areas, calling for widespread adaptation solutions to climate change across Europe. |
| Keywords: | Climate change; Global warming; Firm productivity; Total factor productivity (TFP); Semiparametric methods to estimate production functions |
| JEL: | D24 J24 Q54 |
| Date: | 2024–08–22 |
| URL: | https://d.repec.org/n?u=RePEc:sol:wpaper:2013/377135 |
| By: | Nghiem, Giang; Marencak, Michal |
| Abstract: | This paper estimates the elasticity of intertemporal substitution for the euro area. It leverages the unique design of the Consumer Expectations Survey in Europe to directly infer it from the Euler equation. Our final estimates range between 0.7 and 0.8 for the euro area as a whole, which are higher than those for the US. We also observe economically sizeable heterogeneity across the member states, and over time. Belgium, Germany, and the Netherlands have lower elasticity compared to France, Spain, and Italy. The implications are discussed. |
| Keywords: | inflation, expectations, consumption, intertemporal elasticity of substitution, Euler equation, Consumer Expectations Survey |
| JEL: | D12 D15 D84 E21 |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:han:dpaper:dp-725 |
| By: | Axel H. Börsch-Supan; Johannes Rausch; Luca Salerno |
| Abstract: | Germany, like many other countries, has undergone a series of pension reforms since the 1980s which generally decreased benefit generosity and increased the retirement age due to demographic pressures. This paper investigates whether these reforms have increased income and wealth inequality among retirees. In order to answer this question, we employed counterfactual simulations in which we predict how the income and social security wealth distributions would have developed if these reforms had not taken place, compared to the actual development of the income and social security wealth distributions. Our analysis reveals that the pension reforms has led to an increase in inequality in terms of social security wealth between the 1990s and 2000s and decreased inequality thereafter. The decrease in inequality is mainly driven by social assistance as it represents a lower bound for benefit size and thus mitigates the effect of benefit-reducing reforms for lower income groups. We further divided the total effect of the pension reforms into two components. The first component is the mechanical effect, which keeps retirement probabilities constant and only considers changes in benefit calculation. The second component is the behavioral effect, which describes how SSW differs because of altered retirement probabilities. Our findings indicate that in the German context the behavioral effect is statistically significant but economically small. |
| JEL: | H55 J23 J26 |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32796 |
| By: | Pontus af Buren; Jurg Schweri |
| Abstract: | In many European countries, firms engage heavily in the training of apprentices. The literature has investigated why firms provide such training, but almost no empirical evidence exists on how firms train and shape their apprentices' education outcomes. We investigate this question by estimating a training production function with employer-employee linked data on more than 3, 700 Swiss firms and their 9, 500 apprentices. Using measures derived from work psychology, we test whether apprentices are more likely to successfully complete training in standard time when they are trained in firms with better training processes. We find that apprentices are more successful in firms that assign tasks that make them find own solutions and that are more varied. We find only weak evidence for the hypothesis that the association of good training processes and education success is due to the assortative matching of good apprentices with good firms. We further show that our results are robust to different model specifications and formal sensitivity tests, suggesting an important role of firms and their training processes for apprentices' education success. |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:iso:educat:0225 |
| By: | Ludovic Panon (Directorate General Economics, Statistics and Research, Bank of Italy); Laura Lebastard (Euro Area External Sector Division, Directorate General Economics, European Central Bank); Michele Mancini (Directorate General Economics, Statistics and Research, Bank of Italy); Alessandro Borin (Directorate General Economics, Statistics and Research, Bank of Italy); Peonare Caka (Analysis and Research Department, Bank of Slovenia); Gianmarco Cariola (Regional Economic Research Unit, Bologna Branch, Bank of Italy); Dennis Essers (Economics and Research Department, National Bank of Belgium); Elena Gentili (Regional Economic Research Unit, Bologna Branch, Bank of Italy); Andrea Linarello (Directorate General Economics, Statistics and Research, Bank of Italy); Tullia Padellini (Directorate General Economics, Statistics and Research, Bank of Italy); Francisco Requena (University of Valencia.); Jacopo Timini (Directorate General Economics, Statistics and Research, Bank of Spain) |
| Abstract: | We study how disruptions to the supply of foreign critical inputs (FCIs) − that is, inputs primarily sourced from extra-EU countries with highly concentrated supply, advanced technology products, or which are key to the green transition − might affect value added at different levels of aggregation. Using firm-level customs and balance sheet data for Belgium, France, Italy, Slovenia and Spain, our framework allows us to assess how much geoeconomic fragmentation might affect European economies differently. Our baseline calibration suggests that a 50 % reduction in imports of FCIs from China and other countries with similar geopolitical orientations would result in sizable losses of value added with significant heterogeneity across firms, sectors, regions and countries, driven by the heterogeneous exposure of firms. Our findings show that the short-term costs of supply disruptions of FCIs can be substantial, especially if firms cannot easily switch away from these inputs |
| Keywords: | Geoeconomic fragmentation, global value chains, global sourcing, international trade, imported inputs. |
| JEL: | F10 F14 F50 F60 |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:nbb:reswpp:202408-452 |
| By: | Tamirat, Tseganesh W.; Pedersen, Søren M.; Ørum, Jens E.; DeJonghe, Luc |
| Abstract: | Increasing demand for food with minimal traces of chemicals is challenging viticulture to move away from chemical weeding. In France, there is increasing trend towards mechanical weeding, but it is repetitive, labour intensive, and costly to farmers. Autonomous robotic systems may help tackle the labour challenge while also providing opportunities to improve input use efficiency and minimize CO2 emission. This study provides a cost benefit analysis of robotic mechanical weeding relative to conventional practices of chemical weeding and mechanical weeding using tractor based on a case study in France. The results show that the robotic system generates a little less net present value but considerably reduces labour and fuel use compared to conventional practice. |
| Keywords: | Agribusiness, Crop Production/Industries, Productivity Analysis, Research and Development/Tech Change/Emerging Technologies |
| Date: | 2023–09–19 |
| URL: | https://d.repec.org/n?u=RePEc:ags:haaewp:344214 |
| By: | Thiago Christiano Silva; Paulo Victor Berri Wilhelm; Diego Raphael Amancio |
| Abstract: | This study examines the effects of deglobalization trends on international trade networks and their role in improving forecasts for economic growth. Using section-level trade data from more than 200 countries from 2010 to 2022, we identify significant shifts in the network topology driven by rising trade policy uncertainty. Our analysis highlights key global players through centrality rankings, with the United States, China, and Germany maintaining consistent dominance. Using a horse race of supervised regressors, we find that network topology descriptors evaluated from section-specific trade networks substantially enhance the quality of a country's economic growth forecast. We also find that non-linear models, such as Random Forest, eXtreme Gradient Boosting, and Light Gradient Boosting Machine, outperform traditional linear models used in the economics literature. Using SHapley Additive exPlanations values to interpret these non-linear model's predictions, we find that about half of the most important features originate from the network descriptors, underscoring their vital role in refining forecasts. Moreover, this study emphasizes the significance of recent economic performance, population growth, and the primary sector's influence in shaping economic growth predictions, offering novel insights into the intricacies of economic growth forecasting. |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:bcb:wpaper:597 |