CPB Discussion papers
n° 262, December 2013
Knowledge spillovers from renewable energy technologies, Lessons from patent citations
NOAILLY Joëlle, SHESTALOVA Victoria
This paper studies the knowledge spillovers generated by renewable-energy technologies, unraveling the technological fields that benefit from knowledge developed in storage, solar, wind, marine, hydropower, geothermal, waste and biomass energy technologies. A CPB Background Document accompanies this�CPB Discussion Paper. Using citation data of patents in renewable technologies at seventeen European countries over the 1978-2006 period, the analysis examines the relative importance of knowledge flows within the same specific technological field (intra-technology spillovers), to other technologies in the field of power-generation (inter-technology spillovers), and to technologies unrelated to power-generation (external-technology spillovers). The results show significant differences across various renewable technologies. While wind technologies mainly find applications within their own technological field, a large share of innovations in solar energy and storage technologies find applications outside the field of power generation, suggesting that solar technologies are more general and, therefore, may have a higher value for society. Finally, the knowledge from waste and biomass technologies is mainly exploited by fossil-fuel power-generating technologies. The paper discusses the implications of these results for the design of R&D policies for renewable energy innovation.
(texte téléchargeable du n° 262)
n° 261, December 2013
Optimal bail-out policies under renegotiation
BIJLSMA Michiel, ZWART Gijsbert
We study how the possibility of renegotiation affects optimal bail-out policies for countries under asymmetric information on a country's cost of reforms. To that end, we solve the Bellman equation describing the optimal bail-out mechanism in a multiple-period principal-agent model with adverse selection and renegotiation. In each period, the agent can incrementally raise its level of reforms. The principal values these reforms and negotiates with the agent over reforms and payments. We show that the first-best efficient outcome is reached after two periods when spill-over benefits are quadratic. The principal can use market discipline to improve the outcome. Market discipline can lower the rents the principal has to pay and speed up the renegotiation process.
(texte téléchargeable du n° 261)
n° 260, December 2014
Financial Shocks and Economic Activity in the Netherlands
BROER Peter, ANTONY Jürgen
We analyse the effects of financial shocks on economic development in the euro area and the Netherlands in particular. We develop VAR models that take account of feedback loops between financial-market conditions and the real economy. These feedback loops operate via the aggregated euro-area level and affect the Dutch economy. Our empirical analysis is twofold as we analyse industry as well as GDP level data. Financial shocks are measured as shocks to corporate bond spreads and implied volatility. Bond-spread shocks are found to have direct consequences for real economic development, with a 25 basis points shock giving an effect on industrial production of -0.6% after one year, and -1.35% after four years. A pure volatility shock seems to imply only higher uncertainty about future developments. Applying these figures to the financial crisis of 2008 shows that the model under predicts the negative effects of the crisis.
(texte téléchargeable du n° 260)
n° 259, December 2014
An Assessment of Alternatives for the Dutch First Pension Pillar, The Design of Pension Schemes
DRAPER Nick, NIBBELINK André, UHDE Johannes
The ageing of the Dutch population, resulting in an increase in the number of retirees relative to the working population, has induced a debate about the sustainability of the Dutch first pillar pension scheme (AOW). The system is financed as a pay-as-you-go system. This paper explores possible alternatives for the AOW. It does so by setting up a stochastic partial equilibrium model to study intragenerational insurance, which inlcudes longevity and productivity risk. The model shows the welfare, labour-market, saving and unintended-bequest effects of a shift from a Beveridge towards a Bismarck system in which pension rights depend on labour-market history. The main conclusion is that a shift of the first pillar pensions from a Beveridge towards a Bismarck system is not necessarily welfare improving from an ex-ante insurance perspective, i.e. before the veil of ignorance is lifted. Moreover, a means test of the first pillar against wealth income, which implies a lower AOW when an individual has wealth income and a lower pension premium for everyone, does not improve welfare in the setting of the model considered in this paper.
(texte téléchargeable du n° 259)
n° 258, November 2014
The duration of Dutch export relations: decomposing firm, country and product characteristics
LEJOUR Arjan
Using Dutch transaction-level data on international trade we find that the intensive margin drives Dutch trade growth year by year. After 6 years, new trade relations cover about 50 percent of Dutch exports. Each year 40 percent of the relations are new, but only 25 percent survives after two years. We distinguish several firm-country-product (FCP) relations characterised by the export familiarity of the firm, country or product to identify differences in survival rates. The estimates show that the hazard rates of trade relations with new exporting firms or incumbent firms to new countries are about 15 percent lower. EU membership decreases the hazard rate by 40 percent. Initial sales are also important. Relations with an initial export value of about 50 thousand euro do not survive, while those with an initial value of 200 thousand euro exist after a few years. Exports with homogeneous goods tend to have higher initial trade values and the hazard is about 10 percent lower than those with heterogeneous goods.
(texte téléchargeable du n° 258)
n° 257, September 2013
Optimal Discount Rates for Investments in Mitigation and Adaptation
AALBERS Rob
This paper develops a theory of asset pricing in which discount rates for investments in all assets, including adaptation and mitigation, are endogenously determined. Exploiting the characteristics of adaptation and mitigation in terms of climatic risk, I show that adaptation requires a lower discount rate, whereas mitigation does not. Inspection of the Ramsey rule reveals that the social discount rate equals the social rate of return on optimally-invested aggregate wealth minus the risk premium on that wealth. This risk premium compensates investors for bearing market risk and the risk of unfavorable changes in the economy resulting from climate change. This paper functions as an update of Discussion Paper 126.
(texte téléchargeable du n° 257)
n° 256, September 2013
The stability of tax elasticities in The Netherlands
BETTENDORF Leon, VAN LIMBERGEN Duncan
We estimate long-run and short-run elasticities of Value Added Tax and Personal Income Tax revenues with respect to their bases for the Netherlands. We find VAT elasticities around one in the long-run and short-run. The long-run PIT elasticity is significantly below one, while the short-run elasticity is around one. We experiment with alternative definitions of the tax base for both taxes. We first find that elasticity estimates remain unaffected by using a broader base for both taxes. Second, the conclusion on whether elasticities differ between `good' and `bad' times depends whether the definition of these regimes is based on the deviation of tax revenues from the long-run level or on the output gap. Third, stability over time cannot be rejected for all elasticities, except for the long-run PIT elasticity to the broad base.
(texte téléchargeable du n° 256)
n° 255, September 2013
How much do children learn in school? International evidence from school entry rules
GERRITSEN Sander, WEBBINK Dinand
This study provides the first estimates of the causal effect of time in school on cognitive skills for many countries around the world, for multiple age groups and for multiple subjects. These estimates enable a comparison of the performance of education systems based on gain scores instead of level scores. We use data from international cognitive tests and exploit variation induced by school entry rules within a regression discontinuity framework. The effect of time in school on cognitive skills strongly differs between countries. Remarkably, we find no association between the level of test scores and the estimated gains in cognitive skills. As such, a country’s ranking in international cognitive tests might misguide its educational policy. Across countries we find that a year of school time increases performance in cognitive tests with 0.2 to 0.3 standard deviations for 9-year-olds and with 0.1 to 0.2 standard deviations for 13-year-olds. Estimation of gains in cognitive skills also yields new opportunities for investigating the determinants of international differences in educational achievements.
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n° 254, September 2013
Flexible pension take-up in social security
BONENKAMP Jan, ADEMA Yvonne, MEIJDAM Lex
This paper studies the redistribution and welfare effects of increasing the flexibility of individual pension take-up. We use an overlapping-generations model with Beveridgean pay-as-you-go pensions, where individuals differ in ability and life span. We find that introducing flexible pension take-up can induce a Pareto improvement when the initial pension scheme contains within-cohort redistribution and induces early retirement. Such a Pareto-improving reform entails the application of uniform actuarial adjustment of pension entitlements based on average life expectancy. Introducing actuarial non-neutrality that stimulates later retirement further improves such a flexibility reform.
(texte téléchargeable du n° 254)
n° 253, September 2013
People Skills and the Labor-Market Outcomes of Underrepresented Groups
TER WEEL Bas, BORGHANS Lex, WEINBERG Bruce A.
This paper shows that people skills are important determinants of labor-market outcomes, including occupational choice and wages. Technological and organizational changes have increased the importance of people skills in the workplace. We particularly focus on how the increased importance of people skills has affected the labor-market outcomes of underrepresented groups assuming gender differences in interactions and that cultural differences (including prejudice) may impede cross-racial and ethnic interactions. Our estimates for Britain, Germany and the United States are consistent with such an explanation. Acceleration in the rate of increase in the importance of people skills between the late 1970s and early 1990s in the US can help explain why the gender-wage gap closed and the black-white wage gap stagnated in these years relative to the preceding and following years.
(texte téléchargeable du n° 353)
n° 252, August 2013
The impact of trade, offshoring and multinationals on job loss and job finding
AKCOMAK Semih, DE GROOT Henri, GROOT Stefan
This contribution uses an extensive and unique set of combined Dutch micro-data to analyze the relationship between three dimensions of globalization and unemployment. These dimensions are firm level exports, offshorability of jobs, and working for a foreign-owned firm. Both the probability of getting fired and the time that is needed to find a new job after having been fired are studied. A large share of the variation in unemployment incidence is related to worker characteristics. Women, younger workers and foreign-born workers are more likely to become unemployed. After controlling for worker and firm heterogeneity, we find no evidence for a statistically significant relationship between exporting, working for a foreign firm and having an offshorable job, and the probability that an employee is fired. Furthermore, exposure to globalization prior to getting unemployed is not related to the probability of finding a new job after an employee has been fired.
(texte téléchargeable du n° 252)
n° 251, August 2013
The Importance of Early Conscientiousness for Socio-Economic Outcomes: Evidence from the British Cohort Study
TER WEEL Bas, PREVOO Tyas
This research estimates models of the importance of conscientiousness for socio-economic outcomes. We use measures of conscientiousness at age 16 to explain adult wages and other outcomes, such as crime, health and savings behaviour. We use several waves from the 1970 British Cohort Study. Our estimates suggest a significant and sizeable correlation between early conscientiousness and adult outcomes. Measurement error is corrected for by applying IV-techniques, errors-in-variables estimators and structural equation modelling. Investigation of the lower-order structure of conscientiousness suggests that facets related to reliability, decisiveness and impulse control are most strongly correlated with outcomes. We also investigate changes in early conscientiousness and find that persons who experience declines in the personality distribution between the ages 10 and 16 seem to be worse off in terms of a variety of socio-economic outcomes.
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n° 250, August 2013
The effects of outsourcing on firm productivity: Evidence from microdata in the Netherlands
DE GROOT Henri, MÃHLMANN Jan
International outsourcing is an important aspect of economic globalization. Since outsourcing leads to more specialization, it is expected to reduce production costs and to increase productivity. This study uses microdata on Dutch firms to investigate the effects of international and domestic outsourcing on firm productivity at the firm level. It is based on a unique survey on outsourcing covering the period 2001–2006. The survey allows us to distinguish between domestic and international outsourcing and between outsourcing of core and support activities. We study the effects of these different types of outsourcing on labour productivity and total factor productivity (TFP). The results show that, without adjusting for firm size, more productive firms are more likely to outsource. When we adjust for firm fixed effects, the results suggest that international outsourcing of core functions decreased TFP and domestic outsourcing of support functions increased TFP.
(texte téléchargeable du n° 250)
n° 249, June 2013
Up or out? How individual research grants affect academic careers in the Netherlands
GERRTSEN Sander, VAN DER WIEL, PLUG Erik
This paper investigates the effect of obtaining an individual research grant (IRI -grant) on the
careers of Dutch scientists. The main goal of this scheme is to provide relatively young,
talented scientists with appealing career opportunities in academia. We evaluate the causal
effect of an IRI-grant on labor-market outcomes by taking advantage of the discontinuity in
the relationship between the priority scores given to each application and the actual receipt
of a grant. We find that the receipt of an IRI-grant enhances the probability of a successful
career in science. In particular, grant recipients are more likely to stay in academia, to
become a full professor and to receive follow-up grants. However, grant recipients do not
seem to benefit in terms of higher wages and have a lower probability to be employed on a
permanent contract.
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n° 248, June 2013
The effects of research grants on scientific productivity and utilisation
LANSER Debby, VAN DALEN Ryanne
This paper investigates the effect of receiving a grant from the Dutch Technology Foundation
STW on the research output of an individual researcher. STW roughly distinguishes
two types of funding instruments, i.e. the Open Technology Programme in which research
proposals from different disciplines compete against each other and the thematic
programmes on specific research themes with more prominent industrial involvement.
Overall, STW funds application-oriented research by equally weighting academic quality
and utilisation of submitted research proposals. Research output is therefore measured
along these two criteria, that is, publications and citations for scientific productivity and
publications with industry and patent applications for utilisation. We are able to identify
causal effects of such a grant on research output by exploiting the discontinuity in
the relationship between the priority scores assigned to each proposal and receiving an
STW grant. We find no evidence that an STW grant has a positive effect on scientific
productivity or utilisation for the Open Technology Programme. However, we do find
significantly positive effects of an STW grant on publication rates within the thematic
programmes. Grant receipt in thematic programmes leads to six additional publications
including one co-authored by industry professionals over the next four years.
(texte téléchargeable intégralement)
n° 247, June 2013
Matching worker skills to job tasks in the Netherlands: Sorting into cities for better careers
KOK Suzanne
Matches between workers and jobs are better in thick labour markets than in thin ones. This CPB Discussion Paper measures match quality by the gap between worker skills and their job tasks in the Netherlands. The smaller the gap, the better the match between skills and tasks. The measured gaps are 14 percent of a standard deviation smaller in cities than in the Dutch countryside. The location of work explains the observed higher quality of matches, while the location of residence does not. Robustness analyses show that these results are not explained by more efficient learning in cities or the spatial distribution of industrial and service occupations. Higher matching quality is associated with higher wages and explains part of the urban wage premia.
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n° 246, June 2013
Town and city jobs: Your job is different in another location
KOK Suzanne
This CPB Discussion Paper shows that a job contains a different task package in a large city than the same job in a small city. We set out a theoretical model of the division of labour across cities, which shows that both the division of labour and the skill demand increase with city size. Most datasets hinder an empirical analysis of such a model as they lack spatial variation in job content. Using individual German task data, we are able to empirically estimate our model and analyse spatial variations in task content of jobs. The estimations support the predictions of the model: jobs in large cities consist of other task packages than the same jobs in small cities. Workers in large cities focus more on their core tasks and perform fewer subtasks than workers in small cities. Jobs demand more cognitive skills when they are performed in large cities. This spatial variation in job contents likely bias regional wage equations.
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n° 245, May 2013
Fiscal Equalization and Capitalization: Evidence from a Policy Reform
VERMEULEN by, ALLERS Maarten
Fiscal equalization through the allocation of central government grants may have adverse distributional implications if these grants capitalize into house values. We investigate the impact of changes in grants induced by a reform of the Dutch grant system. Since this reform was implemented gradually and in two subsequent stages that targeted different policy domains, we are able to identify on the nonlinearity of its impact over time. As robustness checks, we identify on either stage separately, or on a reform of financing school buildings, which should have limited effects on house prices as additional funds came with an additional task for municipalities. Our results indicate full capitalization of grants. It follows that property owners were important beneficiaries in the municipalities that saw their grants increased because of disadvantageous socio-economic composition.
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n° 244, May 2013
Do rich households live farther away from their workplaces?
PUIGARNAU Eva Gutierrez, VAN OMMEREN Jos N.
One of the classic predictions of urban economic theory is that high-income and low-income households choose different residential locations and therefore, conditional on workplace location, have different commuting patterns. According to theory, the effect of household income on commuting distance may be positive or negative. Empirical tests of this effect are not standard, due to reverse causation and lack of good control variables. To address reverse causation, estimates of household income on commuting distance are derived using changes in distance through residential moves keeping workplace location constant. Our results show that the (long-run) income elasticity of distance is non-negative and around 0.14 for dual wage-earners.
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n° 243, May 2013
Non-financial determinants of retirement
VAN ERP Frank, VERMEER Niels, VAN VUUREN Daniel
This paper first confronts the observed aggregate retirement pattern in the Netherlands with predictions of traditional economic models of retirement. The retirement peaks observed in the data cannot entirely be reconciled with models putting financial incentives central to individual decision-making. After surveying different explanations from psychology and sociology, the paper concludes that social norms, default options, and reference-dependent utility are likely explanations for the observed individual propensity to retire at standard retirement ages. Most empirical evidence on these factors is, however, not related to the retirement age, so that a great deal of research remains to be done.
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n° 242, April 2013
Optimal fiscal policy
LUKKEZEN Jasper, TEULINGS Coen
This paper derives and estimates rules for fiscal policy that prescribe the optimal response to changes in unemployment and debt. We combine the reduced-form model of the economy from a linear VAR with a non-linear welfare function and obtain analytic solutions for optimal policy. The variables in our reduced-form model – growth, unemployment, primary surplus – have a natural rate that cannot be affected by policy. Policy can only reduce fluctuations around these natural rates. Our welfare function contains future GDP and unemployment, the relative weights of which determine the optimal response. The optimal policy rule demands an immediate and large policy response that is procyclical to growth shocks and countercyclical to unemployment shocks. This result holds true when the weight of unemployment in the welfare function is reduced to zero. The rule currently followed by policy makers responds procyclically to both growth and unemployment shocks, and does so much slower than the optimal rule, leading to significant welfare losses.
(texte téléchargeable intégralement)
n° 241, April 2013
De effecten van de wijkschool in Rotterdam op onderwijsdeelname, werk en criminaliteit
VAN ELK Roel, VAN DER STEEG Marc, WEBBINK Dinand
This paper evaluates the effects of a special program designed to increase school enrolment and employment among multi-problem youths. Treated youths are guided by personal coaches and receive a comprehensive treatment of educational, work, and health services. We investigate the impact of the program by implementing a specific assignment rule such that treatment status depends in a deterministic way on an individual’s application date. We find evidence that assignment to the program increases criminal activity compared to standard intervention, especially among the subpopulation of youths who were suspected of a crime at the time of entry. Peer effects caused by grouping at-risk youths together may explain the adverse impact on criminal behaviour. We find statistically insignificant effects on school enrolment and employment.
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n° 240, April 2013
The private value of too-big-to-fail guarantees
BIJLSMA Michiel, MOCKING Remco
We estimate the size of the funding advantage for a sample of 151 large European banks for the period 1-1-2008 until 15-6-2012 using rating agencies‟ assessment of banks‟ credit ratings uplift. We find that the size of the funding advantage is large and fluctuates substantially over time. It rises from 0.1% of GDP in the first half of 2008 to more than 1% of GDP mid 2011. The latter value is in line with results from other studies. We find that the marginal effect of total assets relative to GDP on the rating uplift is positive and declines with the size of the bank. In addition, a higher sovereign rating of a bank‟s home country corresponds on average to a higher rating uplift for that bank.
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n° 239, March 2013
Why it may hurt to be insured: the effects of capping coinsurance payments
WESTERHOUT Ed, FOLMER Kees
Most health insurance schemes use some sort of cost sharing to curb the moral hazard that is inherent to insurance. It is common to limit this cost sharing, by applying a deductible or a stop loss, for example. This can be motivated from an insurance perspective: without a cap, coinsurance payments might be unacceptably high for people with high medical costs. This paper shows that introducing a cap on coinsurance payments may actually hurt people with high medical costs. This is not due to moral hazard that comes along with the extra insurance. Instead, it is because the introduction of a cap makes health spending below the cap more price elastic, thereby inducing the health insurer to raise the coinsurance rate. Keywords: Moral Hazard, Deductibles, Co-Payment Schemes in Health Care, Idiosyncratic Health Shocks
(texte intégral téléchargeable)
n° 237, March 2013
Directing Technical Change from Fossil-Fuel to Renewable Energy Innovation: An Empirical Application Using Firm-Level Patent Data
NOAILLY Joëlle, SMEETS Roger
This paper investigates the determinants of directed technical change in the electricity generation sector. We use firm-level data on patents filed in renewable (REN) and fossil fuel (FF) technologies by about 7,000 European firms over the period 1978-2006. We separately study specialized firms, that innovate in only one type of technology during the sample period, and mixed firms, that innovate in both technologies. We find that for specialized firms the main drivers of innovation are fossil-fuel prices, market size, and firms' past knowledge stocks. Also, prices and market size drive the entry of new REN firms into innovation. By contrast, we find that innovation by mixed firms is mainly driven by strong path-dependencies since for these firms past knowledge stock is the major driver of the direction of innovation. These results imply that generic environmental policies that affect prices and energy demand are mainly effective in directing innovation by small specialized firms. In order to direct innovation efforts of large mixed corporations with a long history of FF innovation, targeted R&D policies are likely to be more effective.
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n° 236, March 2013
Returns to Communication in Specialised and Diversified US Cities
KOK Suzanne
This CPB Discussion Paper documents and interprets the significance of communication for individual wages within cities with a diversified or specialised industrial structure. Diversified cities house firms which are optimizing their production process by learning from a wide variety of firms. Specialised cities house firms benefiting from the co-agglomeration of similar firms. We find substantial individual wage returns to the performance of communication job tasks in both specialised and diversified US cities in 2009. Communication seems to be less important for the production processes of firms in specialised cities as it is valued less in these cities than in diversified cities. The results are robust to a variety of specifications and other explanations, such as unobserved ability and variation in returns to communication across skill levels. Our results indicate that there is no one-type-fits-all advantage of city environments.
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n° 235, March 2012
A structural analysis of labour supply elasticities in the Netherlands
BOSCH Nicole, GIELEN Miriam, JONGEN Egbert, MASTROGIACOMO Mauro
We estimate the labour supply elasticity for a large number of groups on the Dutch labour market. We exploit a large administrative household panel data set for the period 1999-2005. The idenfication of the parameters benefits from the large 2001 Dutch tax reform that led to substantial exogenous variation in household budget constraints. Read also the accompanying attachment below, with supplementary material. For couples we find that men have much smaller elasticities than women, in particular when children are present. Furthermore, cross elasticities of men's wages on women's labour supply in couples are non-negligible. When they are single, men and women have similar labour supply elasticities. The elasticity is relatively high for single parents with small children, but much lower for single parents with children in secondary school. Low skilled singles and single parents have much higher labour supply elasticities than their high skilled counterparts. Differences by skill are less pronounced for couples. For all groups, the decision whether to participate or not is much more responsive to nancial incentives than the hours per week decision.
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n° 234, February 2013
Labour-market outcomes of older workers in the Netherlands: Measuring job prospects using the occupational age structure
BOSCH Nicole, TER WEEL Bas
Combining employment data with the British Skill Survey (BSS) –which has comparable within-occupation task data for three waves: 1997, 2001 and 2006– we analyse employment changes between occupations (extensive margin) and within occupations (intensive margin). First, we find that the task-content of occupations (i.e. the intensive margin) has experienced significant changes in the United Kingdom between 1997 and 2006. Second, our econometric results suggest that these intensive margin changes can be explained by technological improvements (SBTC) and unionisation levels, while offshoring has not been a factor explaining how tasks are organized within occupations. Analysing changes at the extensive margin we confirm previous findings in the literature: there has been job polarization for both the UK and the Netherlands, and this job polarization can be explained by both SBTC and offshoring, though SBTC seems to be a more influential factor.
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n° 233, February 2012
The effects of technology and offshoring on changes in employment and task-content of occupations
AKCOMAK Semih, KOK Suzanne, ROJAS-RAMAGOSA Hugo
Reduced credit supply in the years 2008 and 2009 should have resulted in lower growth in industries that are more dependent on external finance. This effect should have been stronger in countries with a more prominent and/or more leveraged financial system. We focus on the OECD countries and, controlling for omitted variables, find robust empirical support for both hypotheses. We estimate that the credit crunch reduced the industrial growth rate by 5.5 percentage points in 2008 and by 21 percentage points in 2009.
( texte intégral téléchargeable)n° 232, February 2013
How Large was the Credit Crunch in the OECD?
BIJLSMA Michiel, DUBOVIK Andrei, STRAATHOF Bas
Reduced credit supply in the years 2008 and 2009 should have resulted in lower growth in industries that are more dependent on external finance. This effect should have been stronger in countries with a more prominent and/or more leveraged financial system. We focus on the OECD countries and, controlling for omitted variables, find robust empirical support for both hypotheses. We estimate that the credit crunch reduced the industrial growth rate by 5.5 percentage points in 2008 and by 21 percentage points in 2009.
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n° 231, January 2013
The importance of intrinsic and extrinsic motivation for measuring IQ
TER WEEL Bas, BROGHANS Lex, MEIJERS Huub
This research provides an economic model of the way people behave during an IQ test. We distinguish a technology that describes how time investment improves performance from preferences that determine how much time people invest in each question. We disentangle these two elements empirically using data from a laboratory experiment. The main findings is that both intrinsic (questions that people like to work on) and extrinsic motivation (incentive payments) increase time investments and as a result performance. The presence of incentive payments seems to be more important than the size of the reward. Intrinsic and extrinsic motivation turn out to be complements.
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n° 230, January 2013
Teacher evaluations and pupil achievement: Evidence from classroom observations
VAN DER STEEG Marc, GERRITSEN Sander
This paper investigates the relationship between teacher evaluations, conducted by trained evaluators, and pupil performance in primary education in a large city in the Netherlands. Teacher evaluations are based on a detailed rubric containing 75 classroom practices considered to be crucial for effective teaching. We obtain a set of estimates that suggests that the score on this rubric significantly predicts pupil performance gains. Estimated test score gains are in the order of 0.4 standard deviations in math and grammar if a pupil is assigned to a teacher from the top quartile instead of the bottom quartile of the distribution of the evaluation rubric. These are relatively large differences in pupil outcomes, suggesting that evaluations based on the rubric measure teacher practices that matter for pupil performance. This suggests that the rubric seems to have potential for teacher evaluations and teacher effort.
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n° 229, January 2013
The dog that did not bark: The EITC for single mothers in the Netherlands
BETTENDORF Leon, FOLMER Kees, JONGEN Egbert
We study the extension of an EITC for single mothers in the Netherlands to mothers with a youngest child of 12 to 15 years old. This reform has increased the net income for the treatment group by 5%. Using both DD and RD, we show that this reform has had a negligible effect on labour participation with tight confidence intervals around zero. Our results are at odds with a number of related studies. This is likely to be due to their use of single women without children as the control group, which in our case is an invalid control group.
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n° 228, January 2013
Why Did the Netherlands Develop so Early? The Legacy of the Brethren of the Common Life
TER WEEL Bas, AKCOMAK Semih, WEBBINK Dinand
In many Dutch cities there are Geert Groote schools. This is no coincidence, because Geert Groote's (1340-1384) ideas form the foundation of modern education in the Netherlands and many other countries. Much less known is that his investments, and those of his followers, have put the Netherlands on the pathway towards the Golden Age. In this study, we describe the mechanism by which the influence of Groote so impressive. Furthermore, we present econometric estimates that indicate a long-lasting legacy. This research provides an explanation for high literacy, economic growth and societal developments in the Netherlands in the period before the Dutch Republic. We establish a link between the Brethren of the Common Life (BCL), a religious community founded by Geert Groote in the city of Deventer in the late fourteenth century, and the early development of the Netherlands. The BCL stimulated human capital accumulation by educating Dutch citizens without inducing animosity from the dominant Roman Catholic Church or other political rulers. Human capital had an impact on the structure of economic development in the period immediately after 1400. The educated workforce put pressure on the Habsburg monarchy leading to economic and religious resentment and eventually to the Revolt in 1572. The analyses show that the BCL contributed to the high rates of literacy in the Netherlands. In addition, there are positive effects of the BCL on book production and on city growth in the fifteenth and sixteenth century. Finally, we find that cities with BCL-roots were more likely to join the Dutch Revolt. These findings are supported by regressions that use distance to Deventer as an instrument for the presence of BCL. The results are robust to a number of alternative explanations.
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n° 218, February 2013
Access to External Finance and Innovation: A Macroeconomic Perspective
MEHMOOD Sultan
This article takes a macroeconomic perspective in studying innovation as one of the channels by which better access to financial markets affects economic development. The GMM difference and system estimators which accommodate country specific heterogeneity, endogenous explanatory variables and measurement errors are used to study a panel of 76 countries from year 1988 to 2010. It is found that better access to external finance is a significant factor positively and rapidly influencing innovation and hence long-run economic growth. This positive effect on innovation is robust to both bank and capital market lending with the adverse effect of reduced access to finance on innovation felt disproportionately by lower income countries. However, the estimations suggest that the magnitude of the bank as opposed to capital market lending channel is greater. Moreover, an analysis of the recent financial crisis reveals that the lack of liquidity had a large role to play in reduction of innovation post-crisis.
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