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on Microeconomic European Issues |
| By: | Koen Caminada; Kees Goudswaard; Qingqi Liu; Chen Wang; Jinxian Wang |
| Abstract: | Relative poverty has, in general, become a popular source of interest for research and the public. However, only a few studies have focused on the determinants of relative poverty among the elderly in a comparative setting over time. To fill in this gap, this study decomposed relative poverty among the elderly in 21 European countries, namely Austria, Belgium, Czech Republic, Denmark, France, Finland, Germany, Greece, Hungary, Ireland, Italy, Luxembourg, the Netherlands, Norway, Poland, Romania, Solvakia, Spain, Sweden, Switzerland, and the United Kingdom, based on micro data from the Luxembourg Income Study from around 1995 to around 2022. Various counterfactuals were constructed and simulated. The results showed that relative poverty among the elderly has decreased and is mainly associated with changes in the distribution of pubic pensions, followed by changes in the distribution of private pensions. Labor market factors, especially earnings, have become more povertydecreasing over time in most of the countries under study. Finally, the demographic structure played a positive role in driving relative poverty among the elderly. |
| Date: | 2024–04 |
| URL: | https://d.repec.org/n?u=RePEc:lis:liswps:882 |
| By: | Nonnis, Alberto; Roth, Felix; Bounfour, Ahmed |
| Abstract: | In this article, we highlight important differences in capital investment and capital stock in intangible assets between France and Germany, which we attribute to potential measurement issues between the two countries. Using data from the latest EUKLEMS/INTANProd release for the period between 1995 and 2020, we identify investment in software and databases, along with investment in organizational capital, as key drivers of these differences. Investment in software appears to be four times higher in France than in Germany, while organizational capital is about two and a half times larger in France. Given the comparable economic growth patterns of these two countries over recent decades, we believe these measurement discrepancies could have significant implications for understanding both past growth trends and future growth perspectives. |
| Keywords: | Intangible capital, Labour Productivity, Germany, France, EU |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:uhhhdp:18 |
| By: | Michal Burzynski; Giovanni Peri |
| Abstract: | We analyze the implications of non-EU immigration for wage distribution and inequality among European workers, by focusing on their migration across local labor markets and within- and across-occupational mobility. To quantify the role of each channel, we build a multi-region, multi-occupation and multi-sector model of labor markets that replicates the regularities of labor mobility across spatial and occupational cells in Europe observed in the data. We find that non-EU immigration increases wages of the majority of European workers, while generating significant sorting across occupations (job upgrading) and inducing negative self-selection of natives into inactivity. The overall level of income inequality rises (especially the between-occupation component), fueled by natives’ mobility across jobs. The sorting of native workers across regions induced by immigration is of lesser importance for welfare and inequality, but shapes the spatial distribution of overall effects. |
| Keywords: | Immigration; Welfare; Sorting; Self-selection |
| JEL: | C68 J24 J31 J62 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:irs:cepswp:2024-09 |
| By: | Bruno Caprettini (Universität St. Gallen - School of Economics and Political Sciences Swiss Institute for International Economics and Applied Economic Research); Lorenzo Casaburi (Universität Zürich - Wirtschaftswissenschaftliche Fakutält); Miriam Venturini (Department of Economics, University of California Riverside) |
| Abstract: | Governments often implement large-scale redistribution policies to gain enduring political support. However, little is known on whether such policies generate sizable gains, whether these gains are persistent, and why. We study the political consequences of a major land reform in Italy. A panel spatial regression discontinuity design shows that the reform generated large electoral gains for the incumbent Christian Democratic party. The electoral effects persist over four decades. We explore several channels and find that clientelist brokering and patronage are plausible mechanisms for this persistence. |
| Keywords: | redistribution, voting, clientelism, land reform, Italy |
| JEL: | P16 N44 Q15 D72 |
| Date: | 2023–12 |
| URL: | https://d.repec.org/n?u=RePEc:ucr:wpaper:202408 |
| By: | António Afonso; José Alves; Lucas Menescal; Sofia Monteiro |
| Abstract: | We examine the effects of World Uncertainty and Geopolitical Risk on Trade flows for 31 European economies between 1995 and 2023. To do so, we resort to Panel estimation techniques, including OLS and Poisson Pseudo Maximum Likelihood (PPML). Our findings reveal that European nations primarily respond to global uncertainty by concentrating their exports and imports among top trading partners particularly their top 5 highest trading partners. This result is more pronounced when uncertainty is driven by low-income countries. Moreover, there is a stronger relationship between imports and global uncertainty compared to exports. Our study underscores the importance of European economies strategically adapting their export and import approaches in response to these challenges. |
| Keywords: | geopolitical risk, world uncertainty, trade flows, international trade, European economies |
| JEL: | C23 E44 F14 F41 F62 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11401 |
| By: | Yannick Bury; Lars P. Feld; Heiko T. Burret |
| Abstract: | Marginal rates of contribution (MRC), i.e., the rates at which additional revenues are skimmed via larger contributions or lower transfer receipts, quantify the incentives of a fiscal equalization scheme. The present paper is the first to calculate marginal rates of contribution for the Laender (states) in the German fiscal equalization scheme for each of the 51 years since its establishment in 1970 and over five major reforms, taking into account all relevant revenues. Our results show that MRC have been at a consistently high level. Until 2019 the scheme induced an almost full skimming of additional tax revenues of recipient states. With the system’s latest reform in 2020, MRC increased further. Recipient states now face an over-skimming of additional tax revenues and thus, massive fiscal disincentives to maintain their own tax base. While these findings have been widely expected, comprehensive evidence has been missing so far. |
| Keywords: | fiscal equalization, marginal contribution rates, constitutional reform |
| JEL: | H71 H73 H77 H11 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11293 |
| By: | António Afonso; M. Carmen Blanco-Arana |
| Abstract: | The gender pay gap and the gender gap in employment remains persistent in Europe despite the basic assertion of gender equality under EU law. We assess the factors that influence the gender pay gap and gender employment gap across European countries. Therefore, we use an unbalanced panel of 31 European countries over the period 2000-2022, and estimate a system generalized method of moment model (GMM). The main conclusions confirm that tertiary education significantly reduces gender pay gap and part-time and temporary contracts significantly increase this gap. Moreover, part-time reduces significantly gender employment gap. Gross Domestic Product (GDP) per capita does not affect these gaps and the Global Financial Crisis (GFC) saw a narrowing of the gender pay and employment gaps in European countries. The results are robust when using a fixed effects (FE) model.. |
| Keywords: | gender pay gap, gender employment gap, secondary education, tertiary education, part-time, temporary work, GMM, European countries |
| JEL: | J00 J16 C23 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11315 |
| By: | Andres, Pia |
| Abstract: | Low cost solar energy is key to enabling the transition away from fossil fuels. Despite this, the European Union followed the United States’ example in imposing anti-dumping tariffs on solar panel imports from China in 2013, arguing that Chinese panels were unfairly subsidised and harmed its domestic industry. This paper examines the effects of Chinese import competition on firm-level innovation in solar photovoltaic technology by European firms using a sample of 10, 137 firms in 15 EU countries over the period 1999–2020. I show that firms which were exposed to higher import competition innovated more if they had a relatively small existing stock of innovation, but less if their historical knowledge stock fell within the top 10th percentile of firms in the sample. This suggests that newer firms were more able to respond to increased competition by innovating, while firms with a large historical stock of innovation may have been locked into old technological paradigms. As firms with a smaller knowledge stock tended to innovate more overall, trade with China appears to have been beneficial in encouraging innovation among the most innovative firms. However, I also find evidence that import competition increased the probability of exit among firms in the sample. |
| JEL: | R14 J01 |
| Date: | 2024–10–07 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:125249 |
| By: | Minniti, Antonio; Prettner, Klaus; Venturini, Francesco |
| Abstract: | We study how the development of Artificial Intelligence (AI) influences the distribution of income between capital and labor and how this, in turn, exacerbates geographic income inequality. To investigate this issue, we first build a theoretical framework and then analyze data from European regions dating back to 2000. We find that for every doubling of regional AI innovation, there is a 0.7% to 1.6% decline in the labor share, which may have decreased by between 0.20 and 0.46 percentage points from a mean of 52% due solely to AI. This new technology is particularly detrimental to high-skill and medium-skill labor. The impact on income distribution is driven by worsening wage and employment conditions for high-skill labor, and by wage compression for medium- and low-skill labor. The effect of AI is not driven by other factors affecting regional development in Europe, nor by the concentration process in the AI market. |
| Keywords: | Artificial Intelligence; patenting; labor share; European regions |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:wiw:wus005:68239150 |
| By: | Crescenzi, Riccardo; Ganau, Roberto |
| Abstract: | This paper looks at inward foreign direct investment (FDI) and regional labour productivity in the aftermath of the Great Recession, exploring two FDI-induced effects. The first effect is linked with a capacity of FDI per se to trigger short-term productivity gains in response to a global shock. The second effect is associated with the degree of industrial diversification of these investment flows. The results suggest that it is not the amount of foreign investment received per se that matters for productivity recovery but its composition. A low degree of FDI diversification helped regions to gain productivity after the shock. The effect is stronger in regions with an industrial profile concentrated in a limited number of sectors, particularly in services. FDI can support regional recovery, but in the short run, it does so by matching and reinforcing existing regional specialisation profiles and to the benefit of services-oriented regions. |
| Keywords: | inward FDI; industrial profile; regional growth; European Union |
| JEL: | F20 R11 R12 |
| Date: | 2024–10–23 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:125406 |