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Abstract:
This paper studies the turnover of board of directors members in a sample of 72 companies listed on the Milan Stock Exchange during the period 1988-1996. We investigate whether board members change more frequently when company performance is poor, as the literature suggests, and whether and how the ownership structure of Italian companies affects these relationships. We find that there is a statistically significant and negative relationship between firm performance and CEO turnover and that this relationship depends on the ownership structure of firms. Turnover is lower in family controlled firms and higher in firms that experienced a change in the controlling shareholder. The latter firms also have a stronger turnover-performance relationship. We find evidence supporting the hypothesis that changes in control are an extreme form of turnover. We also find evidence of a monitoring role of the second largest shareholder. Also the turnover of top executives exhibits a negative relationship with performance. Board turnover instead is unrelated to performance but is related to the firm's ownership structure. Overall our findings suggest that the characteristics of the Italian economy deeply affect the turnover of directors and have implications that go beyond the specific case study.

Abstract:
We use cohort data from 11 European countries to study whether experience profiles differ by educational attainment. Previous literature does not provide a clear answer to this question, that is important to evaluate private returns to education over the working life of individuals. We find evidence that employees with tertiary education have steeper experience profiles than employees with upper secondary or compulsory education. Hence, education provides not only an initial labour market advantage but also a permanent advantage that increases with time in the labour market. We also find that differences in earnings growth by education are lower in countries with a higher level of corporatism and higher in countries which have experienced both relatively fast labour productivity growth and a relatively low educational attainment. The educational system also seems to matter, because countries with a more stratified system of secondary education have smaller differences in earnings growth by education.

Education, earnings growth, Europe

Abstract:
This paper analyses the turnover of board of directors members on a sample of companies listed on the Milan Stock Exchange in the period 1988-1996. Our aim is to investigate if board members change more frequently when company performance is poor, as the literature suggests, if this relationship is similar for C.E.O.s and other board members, and if and how the ownership structure of Italian companies affects these relationships. We use three different measures of board of directors turnovers: turnover A is the turnover of all board members; turnover B is the turnover of the President, Vice-President, C.E.O. and General Manager; finally turnover C is the turnover of C.E.O.s only. We find that changes in ownership affect turnover and that the relationship between turnover and performance is stronger in companies that have experienced a change in the controlling shareholder.

Board of Directors, Corporate governance, Financial agency

Abstract:
This paper reviews the existing evidence on workplace training in Europe in different data sources - the CVTS, OECD data and the European Community Household Panel. We outline the differences in training incidence and relate these differences to the private costs and benefits of training, and to institutional factors such as unions, employment protection and product market competition. We ask whether there is a case for under-provision of training in Europe and examine alternative policies aiming both at raising training incidence and at reducing inequalities in the provision of skills.

training, Europe, training policies

Abstract:
This paper is an empirical investigation of the complementarity between education and training in 13 European countries, based on the European Community Household Panel (ECHP). After confirming the standard result that training incidence is higher among individuals with more education, I find that the relationship between individual educational attainment and training incidence varies significantly across countries and birth cohorts. I show that individuals have a higher training incidence in countries with a more educated labour force, a less stratified schooling system, a higher union density, stronger employment protection and a lower value of the Kaitz index. I also find evidence that individuals with more education and relatively short labour market experience enjoy higher private returns from recent training than individuals with the same experience and less education. More experienced individuals with higher education, however, have lower returns from recent training than less educated workers with the same experience.

Education, training, Europe

Abstract:
The purpose of this paper is to provide an update of the empirical evidence on the private returns to education in Italy. First, we show that, whilst returns to education in Italy (based on gross wages) are in line with the European average, educational attainment is generally much lower (particularly at secondary and tertiary levels). How can we reconcile these findings? Based on a simple human capital model - where the optimal level of schooling is given by equating the marginal return to the marginal cost of education ? we speculate that
either marginal costs are steeper in Italy or that a larger share of the population involved in human capital investment faces high marginal costs in Italy compared to the European
average.

Second, we examine whether the estimated returns to education have varied significantly over time. The evidence is that returns have not changed much over the period 1977 to 1995, with the exception of 1993 and 1995, when they have increased significantly, especially among female employees. Quite interestingly, the observed increase in the returns to education has been almost completely driven by higher returns to education in the public sector. Assuming that skill biased technical change has been an important factor in shifting out the marginal returns to education, an important question for future research is why these shifts have only affected returns in the public sector of the economy.

Third and last, we confirm the usual finding in the international literature that accounting for measurement error in years of schooling and/or for the endogeneity of educational choices by using instrumental variables significantly increases the returns to education with respect to estimates based on OLS methods. We also show that adding family background variables
to the set of instruments significantly increases returns, which suggests that these variables affect mainly the subgroup of individuals with higher marginal returns to schooling.

Abstract:
In this empirical paper, I use the 1996 wave of the ECHP dataset to investigate the relationship between measures of wage compression and training incidence in 11 European countries. I find that, after controlling for individual factors and country specific institutional differences, there is evidence of a positive and significant relationship between wage compression and training. This positive relationship is confirmed when I consider only general training. While the former finding is consistent with both competitive and non-competitive approaches to training, the latter result is only consistent with the non-competitive approach.

Training, Europe

Abstract:
Individual absolute risk aversion is measured for a sample of 1373 male household heads, using the 1995 wave of the Survey on the Income and Wealth of Italian households. This measure, conditional on financial and real wealth and household income, is used as an instrument for attained education in a standard log earnings equation. I find that, in line with the literature, the gap between IV and OLS estimates of the returns to education is large.

Abstract:
We develop a simple search equilibrium model of workplace training and education based on two features. First, investment in education improves job-related learning skills and reduces training costs burdened by firms. Second, firms with vacant skilled job slots can choose between recruitment from the market and training. Compared to Germany and Japan, the US has both a higher inflow rate into unemployment and a higher efficiency of the matching process. While the combined effort of these differences on the share of educated labor is ambiguous, the effect on the percentage of firms undertaking workplace training is to unambiguously reduce it.

Abstract:
Expected earnings and expected returns to education are seen by labour economists as a major determinant of educational attainment. In spite of this, the empirical knowledge about expectations and their formation is scarce. In this Paper we report the results of the first systematic study of the wage expectations of European college students. Our data are based on the replies to the same questionnaire by more than 6000 college students all over Europe. We study the determinants of wage expectations and expected employment probabilities, the variability of these expectations within a field of study and their variation across universities and fields. We also examine the trade-off between expected starting wages and wage growth. In the final section of the paper, we contrast expected returns to education with actual returns estimated from country-specific microdata. In line with US studies we find that students overestimate returns to education.

Expectations formation, information processing, returns to education

Abstract:
Expected earnings and expected returns to education are seen by labor economists as a major determinant of educational attainment. In spite of this, the empirical knowledge about expectations and their formation is scarce. In this paper we report the results of the first systematic study of the wage expectations of European college students. Our data are based on the replies to the same questionnaire by more than 6000 college students all over Europe. We study the determinants of wage expectations and expected employment probabilities, the variability of these expectations within a field of study and their variation across universities and fields. We also examine the trade-off between expected starting wages and wage growth. In the final section of the paper, we contrast expected returns to education with actual returns estimated from country-specific micro-data. In line with U.S. studies we find that students overestimate returns to education.

Returns to Education, Expectations Formation, Information Processing

Abstract:
I use the European Community Household Panel to ask whether unemployment affects the relationship between education and subsequent earnings growth. show that individuals with more education have more to lose in terms of subsequent earnings growth from the experience of unemployment. This result partially compensates the fact that more education reduces the incidence of unemployment: unemployment is less likely among the better educated, but its occurrence has more sizeable effects on subsequent earnings growth.

Education, Unemployment, Europe

Abstract:
Regional unemployment differentials among Italian regions have widened since the mid 1980s, especially between the leading Northern and Central areas and the underdeveloped South. We suggest that the following elements are important to explain the observed phenomenon: a) employment performance in the South has worsened considerably in the presence of sustained labour force growth; b) labour mobility from the South to the NC areas has sensibly declined with the reduction in earnings differentials and with the increase in social transfers per head; c) real wages in the South are not affected by local unemployment conditions but depend on the unemployment rate prevailing in the leading areas; d) the labour share increase particularly fast in the South during the 1970s, mainly as a consequence of the elimination of institutions that allowed the presence of significant wage differentials; e) a parsimonious description of the increase in regional unemployment differentials is that the Northern and Southern areas responded in an asymmetric way both to the increase in real social transfers per head and to the reduction in the real price of energy.

Abstract:
Public finance solutions to high unemployment in Europe have often been advocated during the past years. With unemployment concentrated among the young and unskilled, it has been suggested that the reduction of social security contributions for low wage earnings, financed by a carbon tax, could yield a double dividend, the reduction of unemployment and the abatement of pollution. A decline in average labor taxes reduces unemployment if it generates lower pretax wages. Pretax wages fall if real after tax income from unemployment and leisure is not affected or only partially affected by the change in average taxes. When unemployment benefits are not taxed in a unionized economy, lower average labor taxes reduce the replacement ratio, and unions are willing to accept lower pretax wages because the net income loss from employment increases. Changes in labor taxation do not necessarily require that average labor taxes vary. In principle, a switch from payroll to income taxes, given average rates, could affect wage pressure and unemployment. The empirical evidence to date, however, does not support this possibility. When labor taxation is nonlinear, another opportunity is to vary the degree of labor tax progressivity. Economic theory suggests that higher progressivity could reduce unemployment. Suppose that wages are bargained over by unions. When a union contemplates the possibility of a wage hike, it has to consider that say for a 1% increase in the after tax wage the pretax wage increases by 1/v, where v denotes the coefficient of residual income progression. This implies that the expected employment loss associated to the higher after tax wage is e/v, where e is the elasticity of labor demand. Since v<1 with progressive taxation, this loss is higher with progressive than with proportional taxation. It follows that, when labor markets are not perfectly competitive, a certain degree of tax progressivity can be desirable because it makes wage increases less attractive to unions, with positive consequences on the unemployment rate.

This empirical paper adds to the existing literature additional evidence based on Italian data. We use both panel and grouped data to study the effects of average and marginal (payroll and income) tax rates on wage pressure, and investigate whether these effects vary by skill, age group and region of residence.

Our empirical findings are summarized as follows:

a) changes in average payroll taxes are not fully absorbed by offsetting changes in the after tax wage and affect both pretax wages and employment;

b) the estimated effects of changes in average income taxes on pretax wages are mixed but on balance the evidence suggests that after tax wages do not fully offset these changes;

c) higher tax progressivity increases pretax wages;

d) there are significant differences in the relationship between labor taxes and pretax wages by age group but not by region of residence or skill.

We also find that the estimated elasticity of pretax wages to changes in marginal tax rates, given average rates, is large and ranges between 0.919 and 1.131, depending on the specification being used. It is difficult to explain this large positive elasticity exclusively with the argument that the labor supply effect prevails over the wage moderation effect. Therefore, we add an additional mechanism, the relative wage effect, and describe how it can contribute to producing the above results. Briefly put, when individuals and unions care about relative wages and an increase in tax progressivity reduces the own wage via the wage moderation effect, this reduction translates into lower relative wages, which can only be avoided by increasing wage pressure.

Progressive Taxation, Wage Determination, Italy

Abstract:
By focusing on the Italian experience, we ask whether the relationship between labour taxes and unemployment varies across regions. In spite of similar national labour market institutions, we show that this relationship is significantly stronger in the highly industrialised North than in the underdeveloped South, where unemployment is much higher. An important source of variation in the regional responsiveness of unemployment originates from the fact that regional gross wages in the North increase more than in the South in response to a hike in labour taxes. Regional wage setting affects regional employment (and unemployment) both directly and indirectly, via its impact on regional profits and the capital stock.

Regional unemployment, labour taxes

Abstract:
This paper reviews both the theoretical underpinnings and the empirical evidence in support of the under-provision of training. While there is little if any evidence in support of underprovision because of liquidity constraints to the demand side of the market, there is evidence that employers provide and pay for general training, and that the provision of skills encourages labor turnover. The combination of these two facts suggests that the labor market provides less training than optimal. The balance of the existing empirical evidence suggests that policy discussions should focus on the employer rather than on employees. Therefore, we conclude our review by discussing policies which affect the employer' marginal benefits and marginal costs of training.

training, efficiency, turnover

Abstract:
We study the efficiency of secondary school design by focusing on the degree of differentiation between vocational and general education. Using a simple model of endogenous job composition, we analyze the interaction between relative demand and relative supply of skills and characterize efficient school design when the government runs schools and cares about total net output. We show that neither a comprehensive nor a stratified system unambiguously dominates the other system in terms of efficiency for all possibile values of the underlying parameters. Since comprehensive systems generate more equal labour market outcomes, it follows that the relationship between efficiency and equity in secondary education is not necessarily a trade off.

Abstract:
We study the efficiency of secondary school design by focusing on the degree of differentiation between vocational and general education. Using a simple model of endogenous job composition, we analyze the interaction between relative demand and relative supply of skills and characterize efficient school design when the government runs schools and cares about total net output. We show that neither a comprehensive nor a stratified system unambiguously dominates the other system in terms of efficiency for all possible values of the underlying parameters. Since comprehensive systems generate more equal labor market outcomes, it follows that the relationship between efficiency and equity in secondary education is not necessarily a trade off. We also show that net output maximizing government policy is not always supported by majority voting. When schools are stratified, majority voting could increase the elitist nature of general schools by rising the admission standard above efficient levels. At the same time, and depending on the values of the underlying parameters, efficient stratified schools could be voted down in favor of less efficient comprehensive schools.

Abstract:
We study whether the combined significant reduction in the pupil-teacher ratio and increase in parental education observed in Italy between the end of World War II and the end of the 1980s have had a significant impact on the educational attainment and the labor market returns of a representative sample of Italians born between 1941 and 1970. We find that the lower pupil-teacher ratio is positively correlated with higher educational attainment, but that the overall improvement of parental education has had an even stronger impact on attainment. We also find that the positive impact of better school quality on educational attainment and returns to education has been particularly significant for the individuals born in regions and cohorts with poorer family background. Parental education has had asymmetric effects, positive on attainment and negative on school returns. Better school quality has also had asymmetric effects on the returns to education, positive for individuals with poor family background and negative for individuals born in regions and cohorts with relatively high parental education. Our evidence suggests that better school quality, measured by a lower pupil-teacher ratio, is a technical substitute to parental education in the production of individual human capital. When school quality and family background are substitutes, an increase of public resources invested in education can be used to reduce the differences induced by parental education.

Education, Quality, Italy

Abstract:
We study the empirical relationship between labor taxation and pretax wages in Italy. We find that higher tax progressivity increases pretax wages. To explain this result, we introduce in an informal way a relative wage effect and argue that the combination of this effect with the labor supply effect dominates the wage moderation effect. We find also evidence that changes in payroll taxes are not fully absorbed by offsetting changes in the pretax wage and affect labor costs and employment. The evidence on the effect of the average income tax rate on pretax wages is more mixed, but it also points to the presence of some degree of real wage resistance. Finally, we find significant differences in the relationship between labor taxes and pretax wages by age group but not by skill or region of residence.

Progressive Taxation, Wage Determination, Italy

Abstract:
We use data from the European Community Household Panel to investigate the impact of obesity on wages in 9 European countries, ranging from Ireland to Spain. We find that the common impact of obesity on wages is negative and statistically significant, independently of gender. Given the nature of European labor markets, however, we believe that a common impact is overly restrictive. When we allow this impact to vary across countries, we find a negative relationship between the BMI and wages in the countries of the European "olive belt" and a positive relationship in the countries of the "beer belt". We speculate that such difference could be driven by the interaction between the weather, BMI and individual (unobserved) productivity.

wages, body mass index, Europe

Abstract:
There is substantial cross-country variation in secondary school design, with some countries tracking students into different ability schools very early, and other countries with little or no tracking at all. Does tracking length affects school performance, as measured by standardized test scores? We use the international data from the International Adult Literacy Survey to estimate the relationship between the experienced tracking length and the performance in standardized cognitive test scores of young adults, aged between 16 and the mid-twenties. Our IV estimates suggest that the contribution of tracking to performance is positive and statistically significant: conditional on total years of schooling, one additional year spent in a track raises average performance by 3.3 to 3.4 percentage points, depending on the estimates.

tracking, secondary schools, efficiency

Abstract:
This paper studies how schooling admission tests affect economic performance in an economy where individuals are endowed with both academic and non-academic abilities and both abilities matter for labour productivity. We develop a simple model with schools run by the goverment, where individuals signal their abilities by taking an admission test and sort into low quality and high quality schools. When abilities are poorly correlated in the population, as documented in the literature, a standard test based only on academic abilities can be less efficient than a balanced test, which considers both ability types. We show that a sequential testing strategy, with schools testing academic abilities and firms testing non-academic abilities on the sub-sample of graduates of high quality schools, does not necessarily replicate the outcome of a balanced test.

Abstract:
This paper studies how schooling admission tests affect economic performance in an economy where individuals are endowed both with academic and non academic abilities and either ability matters for labour productivity. We show that the outcome of these abilities varies both with the degree of correlation of these abilities in the population and with the productive contribution of each ability. When abilities are poorly correlated, as documented in the literature, a standard test based only on academic abilities is expected to yield lower total output than a more balanced test that considers both ability types. Contrary to this expectation, we show that this is not a general result. We also show that the outcome of an encompassing test can be replicated by a sequential testing strategy, with government held schools testing academic abilities and firms testing non academic abilities on the sub-sample of graduates of elite schools.

Abstract:
This paper investigates whether the interaction between family background and secondary school tracking affects human capital accumulation. A widely shared view is that more tracking reinforces the role of parental privilege, and thereby reduces equality of opportunities. This may occur for several reasons, including peer effects (more talented students are gathered together), teacher sorting (better teachers prefer teaching better students), differences in curricula (academic oriented schools - like the German gymnasium, the French lycee, the British grammar school or the Italian liceo - teach abilities that increase the probability of entering college) and/or differences in resource endowment. Compared to the current literature, which focuses on early outcomes, such as test scores at 13 and 15 years old, we look at later outcomes, including literacy, dropout rates, college enrolment, employability and earnings. While we do confirm the common view that school tracking reinforces the impact of family background when looking at educational attainment and labour market outcomes, we do not confirm the same results when studying its impact on literacy and on-the-job training. Overall school tracking has an ambiguous effect in our sample of countries. On the one hand, and consistently with the previous literature, tracking has a detrimental impact on educational attainment, because it prevents some individuals from further progressing to the tertiary level of education (the diversion effect). On the other hand, the curricula offered in vocational schools seem more effective in promoting further training and adult competences (the specialization effect), thereby reducing the impact of parental background on these two outcomes. Thus, reducing the extent of student tracking, either by raising the age of first selection or by reducing the number of tracks available, may be appropriate for increasing intergenerational mobility in educational attainment, but may increase social exclusion for people from disadvantaged backgrounds.

Abstract:
This paper investigates whether at the interaction between family background and school tracking affects human capital accumulation. Our a priori view is that more tracking should reinforce the role of parental privilege, and thereby reduce equality of opportunity. Compared to the current literature, which focuses on early outcomes, such as test scores at 13 and 15, we look at later outcomes, including literacy, dropout rates, college enrolment, employability and earnings. While we do not confirm previous results that tracking reinforces family background effects on literacy, we do confirm our view when looking at educational attainment and labour market outcomes. When looking at early wages, we find that parental background effects are stronger when tracking starts earlier. We reconcile the apparently contrasting results on literacy, educational attainment and earnings by arguing that the signalling role of formal education - captured by attainment - matters more than actual skills - measured by literacy - in the early stages of labour market experience.

education, tracking, literacy, wages

Abstract:
When labor markets are imperfectly competitive, firms may be willing to finance general training if the wage structure is compressed, that is, if the increase of productivity after training is greater than the increase in pay. We propose a novel way of testing this proposition, which exploits the variation in training incidence and in the training wage premium within the European Union. Our results unambiguously show that (general) training incidence is higher in clusters - defined by country, sector, occupation and educational attainment - with a lower training wage premium, measured as the differential between the median wage growth of trained and untrained employees.

training, wage compression, ECHP

Abstract:
This paper investigates the relationship between education and training provided by the firm, both on the job and off the job, using a unique dataset based on a survey of Thai employees conducted in the summer of 2001. We find a significant and negative relationship between educational attainment and on the job training and no significant relationship between education and off the job training. We also find that education and training are technical complements, especially in the case of off the job training. These findings are consistent with more educated individuals having higher marginal costs of training than less educated workers, especially where on the job training is concerned. Either the better educated have lower learning skills in jobs requiring on the job training or they have higher opportunity costs of training, or both.

Training, Education, Wages

Abstract:
We study the relationship between (log) current earnings and educational levels in Italy. In line with other international evidence, we find that OLS underestimates the marginal return to additional education. When the endogeneity of educational choice is taken into account, the marginal return from one additional year in junior high school increases from 3.2 to 5 percent. Similarly, the marginal return from one additional year in secondary school or in college increases respectively from 3.4 to 4.2 percent and from 6.4 to 7.2 percent. Using longitudinal data, we also find that individuals of the same age with higher education experience faster earnings growth. Hence, there is evidence that wage differentials by education widen as individuals grow older.

Abstract:
We provide comparable evidence on the patterns and trends in obesity across the Atlantic and analyse whether there are economic rationales for public intervention to control obesity. We take into account equity issues as well as efficiency considerations, which are organized around three categories of market failures: productive inefficiencies, lack of information or rationality and health insurance externalities. We also calculate the long term financial consequences of current US and European obesity trends, and conclude with a brief review of current policies to reduce and prevent excessive body weight both in Europe and the US.

obesity, health care costs, efficiency, equity

Abstract:
The authors provide comparable evidence on the patterns and trends in obesity across the Atlantic and analyze whether there are economic rationales for public intervention to control obesity. They take into account equity issues as well as efficiency considerations, which are organized around three categories of market failures: productive inefficiencies, lack of information or rationality and health insurance externalities. They also calculate the long term financial consequences of current U.S. and European obesity trends, and conclude with a brief review of current policies to reduce and prevent excessive body weight both in Europe and the U.S.

obesity, health care costs, efficiency, equity

Abstract:
We show that, when school quality is measured by the educational standard and attaining the standard requires costly effort, secondary education needs not be a hierarchy with private schools offering better quality than public schools, as in Epple and Romano, 1998. An alternative configuration, with public schools offering a higher educational standard than private schools, is also possible, in spite of the fact that tuition levied by private schools is strictly positive. In our model, private schools can offer a lower educational standard at a positive price because they attract students with a relatively high cost of effort, who would find the high standards of the public school excessively demanding. With the key parameters calibrated on the available micro-econometric evidence from the US, our model predicts that majority voting in the US supports a system with high quality private schools and low quality public schools, as assumed by Epple and Romano, 1998. This system, however, is not the one that would be selected by the social planner, who prefers high quality public schools combined with low quality private schools.

private schools, public schools, majority voting

Abstract:
We develop a simple model which determines the optimal timing of school tracking as the outcome of the trade off between the advantages of specialization, which call for early tracking, and the costs of early selection, which lead to later tracking. We calibrate the model for Germany and study how relative demand shifts toward more general skills and changes in the (exogenous) rate of technical progress affect the optimal tracking time as well as the efficient allocation of students to general and vocational tracks.

tracking, secondary schools, Germany

Abstract:
We study the recent evolution of the college wage gap with a unique data set that covers 10 European countries and two cohorts of male employees from the early to mid 1980s to the mid to late 1990s. We find evidence of significant cross country differences in the level and dynamics of the gap. There is also evidence that both the level and the growth of the college wage gap significantly differ between cohorts. The estimated growth in the gap turns out to be negatively correlated to changes in relative supply and positively correlated both with the long run rate of productivity growth and with an index of between industry demand shocks. Institutional changes also matter, and we find that countries that have experienced declines in union density, in the centralization of the wage bargain and in employment protection measures have also had a faster growth in the college wage gap.

College wage gap, growth of college wage gap, labour market institutions, Europe

Abstract:
Recent empirical evidence suggests that the density of local economic activity - measured as the number of employees per square kilometer - positively affects local average productivity. In this paper we use British data from the European Community Household Panel to ask whether local density affects employer-provided training. We find that training is less frequent in economically denser areas. We explain this result as the outcome of the interaction between the positive pooling effects and negative poaching and turnover effects of agglomeration. The size of the negative effect of density is not negligible: when evaluated at the average firm size in the local area, a 10 percent increase in density reduces the probability of employer-provided training by 0.07, more than 20 percent of the average incidence of training in the UK during the sample period.

training, spatial economics, Britain

Abstract:
Motivated by anecdotal as well as econometric evidence from Italy, we ask whether private schools can provide lower quality than public schools. Using a stylized model of the education market with sequential entry of a public and a private school, we show that, depending on the underlying parameters of the model, a market structure with the private school offering at a positive price lower quality than the public school can be an equilibrium. The calibrated parameters for Italy suggest the existence of such an equilibrium in the Italian market for education.

education, private schools, Italy

Abstract:
We investigate the expected college completion time of European college students by using data from a survey of more than 3000 students in 10 countries. We explain observed excess time to graduation by paying special attention to labor market variables, such as unemployment, wage differentials and employment protection, and to the funding of tertiary education.

College Completion, Wage Inequality, College, Expectations

Abstract:
School vouchers introduced recently in some Italian regions have lowered the cost of private schools. On one side, we provide evidence that Italian private schools may be selected for different reasons than quality considerations. On the other side, by exploiting individual data on voucher applicants, we present evidence that the percentage of voucher applicants is higher the higher the average quality of private schools, which we explain with the fact that better quality schools provide better services to students, including information and consulting on vouchers. We show that enrollment in private schools responds sluggishly to changes in tuition induced by vouchers. Under stringent assumptions, we estimate the slopes of demand and supply of private education in the largest Italian region, Lombardy, during the first two years since implementation of a voucher scheme, and provide a quantitative assessment of the long-term impact of vouchers on tuition fees and enrollment in private schools.

school vouchers, Italy

Abstract:
We use a search and matching model to investigate the economic relationship between training and local economic conditions. We identify two aspects of this relationship going in opposite directions: on the one hand, the complementarity between local knowledge spillovers and training generates a positive correlation with local density; on the other hand, the negative influence of higher wages in denser areas reduces training. Overall the relationship can be either positive or negative, depending on the relative strength of the two effects. Our empirical analysis, based on a sample of Italian firms, shows that training is lower in provinces with higher labor market density, measured as the number of employees per squared kilometer. This empirical result confirms previous evidence by Brunello and Gambarotto (2004) based on UK data.

training, local labor markets, Italy

Abstract:
Using data from 12 European countries and the variation across countries and over time in the changes of minimum school leaving age, we study the effects of the quantity of education on the distribution of earnings. We find that compulsory school reforms significantly affect educational attainment, especially among individuals belonging to the lowest quantile of the distribution of ability. Contrary to previous findings in the relevant literature, we find that additional education reduces wage inequality below median income and increases it above median income. There is also evidence in our data that education and ability are complements in the production of human capital and earnings. While these results support an elitist education policy - more education to the brightest, they also suggest that investing in the less fortunate but bright could payoff both on efficiency and on equity grounds.

education reforms, distribution of earnings, Europe

Abstract:
Secondary schools in the developed world differ in the degree of differentiation and in the first age of selection of pupils into different tracks. In this paper, we account for the heterogeneity of tracking time with a simple stochastic model which conjugates the returns from specialization with the costs of early selection. We calibrate the model for 20 countries - including most of Europe, the US and Japan - and show that the model performs rather well in replicating the observed heterogeneity, with the remarkable exception of Germany.

tracking, secondary schools

Abstract:
We use data from a nationally representative survey of Italian graduates to study whether Alma Mater matters for employment and earnings three years after graduation. We find that the attended college does matter, and that college related differences are substantial both among and within regions of the country. However, these differences are not large enough to trigger substantial mobility flows from poorly performing to better performing institutions. There is also evidence that going to a private university pays off at least in the early part of a career: the employment weighted college wage gains from going to a private college are close to 18 percent. Only part of this gain can be explained by the fact that private universities have lower pupil - teacher ratios than public institutions.

college education, Italy

Abstract:
We model a two sector economy with unionized labor markets and competitive product markets, where workers and unions care about their relative wages, and show that the presence of a relative wage concern could help generation a positive relationship between tax progressivity and wage pressure.

Progressive Taxation, Relative Wage Effect

Abstract:
According to Becker [1964], when labour markets are perfectly competitive, general training is paid by the worker, who reaps all the benefits from the investment. Therefore, ceteris paribus, the greater the training wage premium, the greater the investment in general training. Using data from the European Community Household Panel, we compute a proxy of the training wage premium in clusters of homogeneous workers and find that smaller premia induce greater incidence of off-site training, which is likely to impart general skills. Our findings suggest that the Becker model provides insufficient guidance to understand empirical training patterns. Conversely, they are not inconsistent with theories of training in imperfectly competitive labour markets, in which firms may be willing to finance general training if the wage structure is compressed, that is, if the increase in productivity after training is greater than the increase in pay.

general training, off-site training, training wage premia, wage compression, ECHP

Abstract:
We exploit the cross-country and time variation in the demographics and education structure in 11 European countries to study how cohort size has affected real earnings in Europe. When we pool the data of all countries, we find that cohort size has a negative and statistically significant effect on the earnings of the older cohorts - aged between 35 and 54 - but no statistically significant effect on the earnings of younger cohorts - aged 20 to 34. The negative effect of cohort size on earnings is completely driven by Southern European countries, a result which we relate to institutional differences. While the share of individuals aged 20 to 34 in the population has declined in the EU11 by 10.20 percent between 1991 and 2001, the share of individuals aged 35 and 54 has increased by 9.32 percent. Our estimates suggest that, as a consequence of these significant demographic changes, the real earnings of the younger cohorts have increased on average by a tiny 0.06 percent, while the earnings of the older cohorts have declined by 0.93 percent, a modest variation.

cohort size, wages, Europe

Abstract:
We develop a theoretical and empirical analysis of the impact of barriers to entry on workplace training. Our theoretical model yields ambiguous predictions on the sign of this relationship. On the one hand, given the number of firms, a deregulation reduces profits per unit of output, and thereby reduces training. On the other hand, the number of firms increases, and so does the output gain from training, which facilitates the investment in training. Our numerical simulation shows that for reasonable values of the parameters a negative relationship prevails. We use repeated cross section data from the European Labour Force Survey to investigate empirically the relationship between product market regulation and training incidence in a sample of 15 European countries and 13 industrial sectors, which we follow for about 7 years. Our empirical results are unambiguous and show that an increase in product market deregulation generates a sizeable increase in training incidence.

training, product market competition, Europe

Abstract:
During the postwar period, many countries have de-tracked their secondary schools, based on the view that early tracking was unfair. What are the efficiency costs, if any, of de-tracking schools? To answer this question, we develop a two skills - two jobs model with a frictional labour market, where new school graduates need to actively search for their best match. We compute optimal tracking length and the output gain/loss associated to the gap between actual and optimal tracking length. Using a sample of 18 countries, we find that: a) actual tracking length is often longer than optimal, which might call for some efficient de-tracking; b) the output loss of having a tracking length longer or shorter than optimal is sizeable, and close to 2 percent of total net output.

mismatch, school tracking

Abstract:
According to the standard principal-agent model, the optimal composition of pay should balance the provision of incentives with the individual demand for insurance. Do income taxes alter this balance? We show that the relative share of PRP on total pay is reduced by higher average taxes, and is affected in a complex way by higher marginal tax rates. Empirical evidence based on the British Household Panel Survey, which exploits the UK 1999 Tax Reform, supports the theoretical predictions of the tax-augmented principal-agent model.

performance related pay, income taxes

Abstract:
Books reviewed in this article:

Masahisa Fujita and Jacques-Francois Thisse - Economics of Agglomeration: Cities, Industrial Location, and Regional Growth

Timothy J. Bartik - Jobs for the Poor: Can Labor Policies Help?

Miriam Solomon - Social Empiricism

Nicole Pohl - Mobility in Space and Time: Challenges to the Theory of International Economics

Steven Brakman, Harry Garretsen, and Charles van Marrewijk - An Introduction to Geographical Economics: Trade, Location and Growth

Bruce A. Weber, Greg J. Duncan, and Leslie A. Whitener (eds.)- Rural Dimensions of Welfare Reform

Wallace E. Oates (ed.) - Property Taxation and Local Government Finance: Essays in Honor of C. Lowell Harris

Maryann P. Feldman and Nadine Massard (eds.) - Institutions and Systems in the Geography of Innovation

Dengjian Jim - The Dynamics of Knowledge Regimes: Technology, Culture and Competitiveness in the USA and Japan

Harvey J. Miller and Jiawei Han (eds.) - Geographic Data Mining and Knowledge Discovery

Anna Nagurney and June Dong - Supernetworks: Decision-Making for the Information Age

Stuart McCook - States of Nature: Science, Agriculture, and Environment in the Spanish Caribbean, 1760-1940

Philip Scranton (ed.) - The Second Wave: Southern Industrialization from the 1940's to the 1970's

Stephen Haycox - Frigid Embrace: Politics, Economics, and Environment in Alaska

Kathleen Ann Pickering - Laqkota Culture, World Economy

Organisation for Economic Co-operation and Development (OECD) - OECD Territorial Reviews: Hungary

Organisation for Economic Co-operation and Development (OECD) - OECD Territorial Reviews: Italy

Organisation for Economic Co-operation and Development (OECD) - OECD Territorial Reviews: Bergamo, Italy

Organisation for Economic Co-operation and Development (OECD) - OECD Territorial Reviews: Teruel, Spain

Organisation for Economic Co-operation and Development (OECD) - OECD Territorial Reviews: The Valencian Central Districts, Spain

Jaakko Suvantola - Tourist's Experience of Place

Abstract:
We model individual careers in sports and games from initial entry to eventual exit or success as a discrete-choice, finite-horizon optimization problem. We apply this model to the international game of chess and study cross-country differences in the relative success of players. While we find no evidence that the players in our sample from the ex-Warsaw Pact are more talented than European and American players, there is evidence that they face lower training costs.

occupational choice, sports and games

Abstract:
Economists have a poor understanding of the mechanisms underlying reduced-form college peer effects. In this paper we explore a candidate mechanism, the provision of school effort. We show that, when earnings reflect individual educational performance as well as the field of study selected at college, and individual effort is a function of expected earnings, the size of the peer effect varies by field. Using data from a middle-sized public university located in Southern Italy and exploiting the random assignment of first year students to college accommodation, we find evidence that peer effects are positive and statistically significant for students enrolled in the fields of Engineering, Maths and Natural Sciences - which are expected to generate higher earnings after college - and not different from zero for students enrolled in the Humanities, Social and Life Sciences, which give access to lower payoffs. An implication of our model is that shocks affecting college wage premia may alter the size of peer effects.

optimal effort, fields of study, Italy, random assignment, peer effects

Abstract:
In a multisector economy with unionized labor markets, the interdependence of union wage claims typical of industrial bargaining affects the relationship between tax progressivity and wage pressure, which varies in a nonlinear fashion with the nature of the wage bargain, and can be hump-shaped. Our empirical analysis of 20 OECD countries for the period 1997 2004 shows that higher tax progressivity increases pre-tax wages (and unemployment) in countries characterized by industry level wage bargaining, and reduces them in countries with local or fully centralized bargaining.

JEL classifications: H24

Abstract:
The existing empirical evidence on the relationship between apprenticeships, initial workplace training and economic downturns, is relatively scarce. The bottom line of this literature is that ratio of apprentices to employees tends to be (mildly) pro-cyclical and to decline during a recession, with the notable exception of the Great Depression, when it rose (at least in England). When broader measures of training are considered, which exclude apprentices, the weight of the evidence is in favour of counter-cyclical training incidence. This paper suggests that a possible reconciliation of these findings is based on recognizing that firms may have incentives to train incumbents during a downturn and at the same time to reduce the recruitment and training of young employees, who are engaged in the transition from school to work.

apprenticeship training, economic downturns

Abstract:
We exploit the cross-country and time variation in the demographics and education structure of 11 European countries to study how cohort size has affected real earnings in Europe. When we pool the data of all countries, we find that cohort size has a negative and statistically significant effect on the earnings of the older cohorts - aged between 35 and 54 - but no statistically significant effect on the earnings of younger cohorts - aged 20 to 34. The negative effect of cohort size on earnings is completely driven by Southern European countries, a result which we relate to institutional differences. While the share of 20 - 34-year-olds in the population has declined in the EU11 by 10.20 percent between 1991 and 2001, the share of 35 - 54-year-olds has increased by 9.32 percent. Our estimates suggest that, as a consequence of these significant demographic changes, the real earnings of the younger cohorts have increased on average by a tiny 0.06 percent, while the earnings of the older cohorts have declined by 0.93 percent, a modest variation.

Cohort size, wages, Europe

Abstract:
In spite of their relative vicinity Scandinavian countries and Central European countries (mainly Germany) have substantially different schooling institutions. While the former group of countries delays school tracking until age 16, the latter group anticipates differentiation between age 10 and age 13. This paper proposes a simple median voter model of school design which accounts rather well for these differences. The key idea is that voters weight the potential advantages of early tracking in terms of higher wages and human capital against the information loss associated to early selection.

Central Europe, Scandinavia, school tracking

Abstract:
Obesity in Europe is rising. This paper investigates the economic rationales for public intervention to control obesity. We present new empirical evidence showing that family background is related to obesity among young European adults. This evidence provides a strong basis for intervention on equity grounds, particularly targeted towards children. The case for intervention on efficiency grounds is less clear-cut and in most cases the evidence is relatively weak. We find insufficient evidence that information deficiencies are important, as the majority of Europeans appear to be aware of the bad consequences of obesity on health. We also find that the potential health insurance externality -- non-obese effectively subsidizing obese individuals -- is small. In support of policy intervention, we show that there are product and labour market imperfections. Obese employees earn less than the non-obese. We also find that there is a remarkably high proportion of individuals with self-control problems, who fail to stick to their self-declared weight-related plans. Regulations that affect fast food advertisements and the location and access to fast food vending machines and establishments may help these individuals in controlling their weight.

Abstract:
Does the peer effect vary with the field of study? Using data from a middle-sized public university located in Southern Italy and exploiting the random assignment of first year students to college accommodation, we find that roommate peer effects for freshmen enrolled in the Hard Sciences are positive and significantly larger than for freshmen enrolled in the Humanities and Social Sciences. We present a simple theoretical model which suggests that the uncovered differences between fields in the size of the peer effect could plausibly be generated by between-field variation in labor market returns, which affect optimal student effort.

peer effects, effort, fields of study, random assignment, Italy

Abstract:
Using data from 12 European countries and the variation across countries and over time in the changes of minimum school leaving age, we study the effects of the quantity of education on the distribution of earnings. We find that compulsory school reforms significantly affect educational attainment, especially among individuals belonging to the lowest quantiles of the distribution of ability. There is also evidence that additional education reduces conditional wage inequality, and that education and ability are substitutes in the earnings function.

Abstract:
When school quality increases with the educational standard set by schools, education before college need not be a hierarchy with private schools offering better quality than public schools. In our model, private schools can offer a lower educational standard at a positive price because they attract students with a relatively high cost of effort, who would find the high standards of public schools excessively demanding. We estimate the key parameters of the model and show that majority voting supports a system where private schools have higher quality in the US and public schools have higher quality in Italy.

Abstract:
We use data from the European Community Household Panel to investigate the impact of body weight on wages in nine European countries. When we pool the available data across countries and years, we find that a 10% increase in the average body mass index reduces the real earnings of males and females by 3.27% and 1.86%, respectively. Since European culture, society and labour market are heterogeneous, we estimate separate regressions for Northern and Southern Europe and find that the negative impact of the body mass index on earnings is larger - and statistically significant - in the latter area.

Wages, Body mass index, Europe