This paper investigates the economic value of Catalan knowledge for national and foreign first- and second-generation immigrants in Catalonia. Specifically, drawing on data from the “Survey on Living Conditions and Habits of the Catalan Population (2006)”, we want to quantify the expected earnings differential between individuals who are proficient in Catalan and those who are not, taking into account the potential endogeneity between knowledge of Catalan and earnings. The results indicate the existence of a positive return to knowledge of Catalan, with a 7.5% increase in earnings estimated by OLS; however, when we account for the presence of endogeneity, monthly earnings are around 18% higher for individuals who are able to speak and write Catalan. However, we also find that language and education are complementary inputs for generating earnings in Catalonia, given that knowledge of Catalan increases monthly earnings only for more educated individuals.
Di Paolo, A. (GEAP & IEB); Raymond, J. Ll. (GEAP & IEB) Publicat a Journal of Applied Economics, forthcoming
Pensions together with savings and investments during active life are key elements of retirement planning. Motivation for personal choices about the standard of living, bequest and the replacement ratio of pension with respect to last salary income must be considered. This research contributes to the financial planning by helping to quantify long-term care economic needs. We estimate life expectancy from retirement age onwards. The economic cost of care per unit of service is linked to the expected time of needed care and the intensity of required services. The expected individual cost of long-term care from an onset of dependence is estimated separately for men and women. Assumptions on the mortality of the dependent people compared to the general population are introduced. Parameters defining eligibility for various forms of coverage by the universal public social care of the welfare system are addressed. The impact of the intensity of social services on individual predictions is assessed, and a partial coverage by standard private insurance products is also explored. Data were collected by the Spanish Institute of Statistics in two surveys conducted on the general Spanish population in 1999 and in 2008. Official mortality records and life table trends were used to create realistic scenarios for longevity. We find empirical evidence that the public long-term care system in Spain effectively mitigates the risk of incurring huge lifetime costs. We also find that the most vulnerable categories are citizens with moderate disabilities that do not qualify to obtain public social care support. In the Spanish case, the trends between 1999 and 2008 need to be further explored.
Bolancé, C. (RFA-IREA), Alemany, R. (RFA-IREA), Guillén, M. (RFA-IREA)
This paper explores the earnings return to Catalan knowledge for public and private workers in Catalonia. In doing so, we allow for a double simultaneous selection process. We consider, on the one hand, the non-random allocation of workers into one sector or another, and on the other, the potential self-selection into Catalan proficiency. In addition, when correcting the earnings equations, we take into account the correlation between the two selectivity rules. Our findings suggest that the apparent higher language return for public sector workers is entirely accounted for by selection effects, whereas knowledge of Catalan has a significant positive return in the private sector, which is somewhat higher when the selection processes are taken into account.
Di Paolo, A. (GEAP & IEB) Publicat a Hacienda Pública Española/Revista de Economía Pública, 197-(2/2011): 9-35
Our empirical literature review shows that little is known about how firm performance changes with age, presumably because of the paucity of data on firm age. For Spanish manufacturing firms, we analyse the firm performance related to firm age between 1998 and 2006. We find evidence that firms improve with age, because ageing firms are observed to have steadily increasing levels of productivity, higher profits, larger size, lower debt ratios, and higher equity ratios. Furthermore, older firms are better able to convert sales growth into subsequent growth of profits and productivity. On the other hand, we also found evidence that firm performance deteriorates with age. Older firms have lower expected growth rates of sales, profits and productivity, they have lower profitability levels (when other variables such as size are controlled for), and also that they appear to be less capable to convert employment growth into growth of sales, profits and productivity.
This paper is concerned with the investigation of the intergenerational mobility of education in several European countries and its changes across birth cohorts (1940-1980) using a new mobility index that considers the total degree of mobility as the weighted sum of mobility with respect to both parents. Moreover, this mobility index enables the analysis of the role of family characteristics as mediating factors in the statistical association between individual and parental education. We find that Nordic countries display lower levels of educational persistence but that the degree of mobility increases over time only in those countries with low initial levels. Moreover, the results suggest that the degree of mobility with respect to fathers and mothers converges to the same level and that family characteristics account for an important part of the statistical association between parental education and children’s schooling; a particular finding is that the most important elements of family characteristics are the family’s socio-economic status and educational assortative mating of the parents.
Di Paolo, A. (GEAP & IEB), Raymond, J. Ll. (GEAP & IEB), Calero, J. (IEB)
Concerns on the clustering of retail industries and professional services in main streets had traditionally been the public interest rationale for supporting distance regulations. Although many geographic restrictions have been suppressed, deregulation has hinged mostly upon the theory results on the natural tendency of outlets to differentiate spatially. Empirical evidence has so far offered mixed results. Using the case of deregulation of pharmacy establishment in a region of Spain, we empirically show how pharmacy locations scatter, and that there is not rationale for distance regulation apart from the underlying private interest of very few incumbents.
Borrell, J. R. (GiM-IREA), Fernández-Villadangos, L. (GiM-IREA)
Drawing on PISA data of 2006, this study examines the impact of socio-economic school composition on science test score achievement for Spanish students in compulsory secondary schools. We define school composition in terms of the average parental human capital of students in the same school. These contextual peer effects are estimated using a semi-parametric methodology, which enables the spillovers to affect all the parameters of the educational production function. We also deal with the potential problem of self-selection of student into schools, using an artificial sorting that we argue to be independent from unobserved student’s abilities. The results indicate that the association between socio-economic school composition and test score results is clearly positive and significantly higher when computed with the semi-parametric approach. However, we find that the endogenous sorting of students into schools plays a fundamental role, given that the spillovers are significantly reduced when this selection process is ruled out from our measure of school composition effects. Specifically, the estimations suggest that the contextual peer effects are moderately positive only in those schools where the socio-economic composition is considerably elevated. In addition, we find some evidence of asymmetry of how the external effects and the sorting process actually operate, which seem affect in a different way males and females as well as high and low performance students.
Network airlines have been increasingly focusing their operations on hub airports through the exploitation of connecting traffic, allowing them to take advantage of economies of traffic density, which are unequivocal in the airline industry. Less attention has been devoted to airlines? decisions on point-to-point thin routes, which could be served using different aircraft technologies and different business models. This paper examines, both theoretically and empirically, the impact on airlines ?networks of the two major innovations in the airline industry in the last two decades: the regional jet technology and the low-cost business model. We show that, under certain circumstances, direct services on point-to-point thin routes can be viable and thus airlines may be interested in deviating passengers out of the hub.
The dilemma efficiency versus equity, together with political partisan interests, has received increasing attention to explain the territorial allocation of investments. However, centralization intended to introduce or reinforce hierarchization in the political system has not been object as of now of empirical analysis. Our main contribution to the literature is providing evidence that meta-political objectives related to the ordering of political power and administration influence regional investment. In this way, we find evidence that network mode’s (roads and railways) investment programs are influenced by the centralization strategy of investing near to the political capital, while investment effort in no-network modes (airports and ports) appears to be positively related to distance. Since investment in surface transportation infrastructures is much higher than that in airports and ports, and taken into account that regions surrounding the political capital are poorer than the average, we suggest that centralization rather than redistribution has been the driver for the concentration of public investment on these regions.
Albalate, D. (GiM-IREA), Bel, G. (GiM-IREA), Fageda, X. (GiM-IREA)
This paper provides evidence on the sources of differences in inequalities in educational scores in European Union member states, by decomposing them into their determining factors. Using PISA data from the 2000 and 2006 waves, the paper shows that inequalities emerge in all countries and in both period, but decreased in Germany, whilst they increased in France and Italy. Decomposition shows that educational inequalities do not only reflect background related inequality, but especially schools’ characteristics. The findings allow policy makers to target areas that may make a contribution in reducing educational inequalities.