SPATIAL AND SECTORAL PRODUCTIVITY CONVERGENCE BETWEEN EUROPEAN REGIONS, 1975-2000

This paper analyzes the evolution of labor productivity disparities among 145 European regions over 1975-2000 according to the concepts of ƒã- and ƒÒ-convergence and emphasizes the importance of including spatial effects and a disaggregated analysis at a sectoral level. We detect a significant -convergence only in aggregate labor productivity and in the services sectors among peripheral regions. We also show that omitting spatial effects leads to biased measures of -convergence. We then estimate a pooled -convergence model including spatial autocorrelation and sectoral differentiation. The results indicate that disparities in productivity levels between core and peripheral regions persist by vary by sector.convergence, spatial econometrics, labor productivity, sectoral approach

REGIONAL CONVERGENCE AND THE IMPACT OF EUROPEAN STRUCTURAL FUNDS OVER 1989-1999: A SPATIAL ECONOMETRIC ANALYSIS

This paper estimates the impact of structural funds on the convergence process between 145 European regions over 1989-1999. Since the majority of these funds finance transportation infrastructures, they induce spillover effects, industry relocation and do not necessarily succeed in reducing regional inequalities. To estimate their impact, including spillover effects, we first apply spatial econometrics on a conditional beta-convergence model; second, we simulate their impact on the targeted region and then on all the other regions. The results show that structural funds have positively benefited to the targeted regions’ growth, but that spillover effects are very small in peripheral regions.European structural funds, beta-convergence, spatial econometrics, geographic spillovers

THE DIFFERENTIAL IMPACT OF FEDERAL AND STATE MINIMUM WAGES ON TEENAGE EMPLOYMENT

The "new economics of the minimum wage" is based on the findings from case studies that minimum wages had no effect on employment and may even have increased it. This conclusion is at odds with the findings of earlier studies and those of a number of more recent studies which find a statistically significant negative effect on teenage employment. These conflicting results constitute a puzzle. We find that this is due to minimum wage hikes implemented at the state-level having no negative effects on teenage employment during the 1980s and 1990s, while the federal hikes of the 1990s did. In states without their own minimum wages, the decline in the relative value of the federal minimum wage during the 1980s gave rise to an increase in low-wage employment that was subsequently checked and reversed by the federal hikes in the early 1990s.Federal Minimum Wages; State Minimum Wages; Teenage Employment

The Impact of EU Regional Support on Growth and Employment

In this paper the authors assess the impact of structural funds on the per capita GDP and employment convergence process of 145 European regions over 1989–1999. This paper goes beyond the recent contributions on European regional policies and convergence since each of the five objectives of regional support is studied and spatial effects are included in the analysis. For this purpose the authors use spatial econometrics to include the relevant spatial effects in the estimation of the appropriate conditional ß-convergence model. The impact of the funds and their spatial lag indicate few significant results, and when they are, their extent is very small or even negative. This raises some doubts on the efficiency of regional support and call for a deep reform for the next programming period.European structural funds, ß-convergence, growth, employment, spatial econometrics, geographic spillovers

THE DIFFERENTIAL IMPACT OF FEDERAL AND STATE MINIMUM WAGES ON TEENAGE EMPLOYMENT

The "new economics of the minimum wage" is based on the findings from case studies that minimum wages had no effect on employment and may even have increased it. This conclusion is at odds with the findings of earlier studies and those of a number of more recent studies which find a statistically significant negative effect on teenage employment. These conflicting results constitute a puzzle. We find that this is due to minimum wage hikes implemented at the state-level having no negative effects on teenage employment during the 1980s and 1990s, while the federal hikes of the 1990s did. In states without their own minimum wages, the decline in the relative value of the federal minimum wage during the 1980s gave rise to an increase in low-wage employment that was subsequently checked and reversed by the federal hikes in the early 1990s.Federal Minimum Wages; State Minimum Wages; Teenage Employment

Spatial econometric analysis of the evolution of the European regional convergence process, 1980-1999

beta-convergence, convergence clubs, European regions, spatial econometrics

SPATIAL AND SECTORAL PRODUCTIVITY CONVERGENCE BETWEEN EUROPEAN REGIONS, 1975-2000

This paper analyzes the evolution of labor productivity disparities among 145 European regions over 1975-2000 according to the concepts of sigma- and beta-convergence and emphasizes the importance of including both spatial effects and a disaggregated analysis at a sectoral level. We detect sigma-convergence in aggregate labor productivity and in the service sectors but not in the other sectors. This result can be explained by a transfer of resources from the agricultural sector to the more productive sectors that has been more marked in the poor regions. Empirical results also indicate that the common indicator of sigma-convergence lead to a bias when spatial effects are not included in the analysis. We then estimate beta-convergence models including the relevant spatial effects for each sector. The results show that inequality in productivity levels between core and peripheral regions persist and highlight how convergence speeds and the nature of spatial effects vary from one sector to another.

Geographic Spillover Effects of Regional Funds and their Impact on the European Convergence Process over 1989-1999

The aim of this paper is to highlight the role of geographic spillover effects due to the regional funds on the convergence process of 145 European regions over 1989-1999. With the aim of enhancing cohesion, these funds are primarily allocated to the least developed regions. First the most important part of these funds is devoted to transportation infrastructures, which induce strong spillover effects. However they do not necessarily contribute to a more even regional development. Their impact has therefore to be seen in the light of growth rate variations of the targeted region and of the whole sample. Second, since the wealthiest regions have more ability to accompany regional funds, the role of additional funds in the regional development process is investigated as well. Using the formal tools of spatial econometrics, we first detect strong evidence of spatial autocorrelation, both on per capita GDP and regional funds. Moreover, two clusters, representative of the core-periphery framework, are persistent over the period and highlight spatial heterogeneity. These spatial effects are then included in the estimation of an appropriate conditional -convergence model, which allows us to control for spatial spillover effects among regions. Finally, with this model, we assess the impact of European regional funds on the regional convergence process using simulation experiments.

The impact of objective and subjective measures of air quality and noise on house prices: a multilevel approach for downtown Madrid

Air quality is one of the major concerns in big cities. It is therefore of interest to evaluate properly air pollution. Specifically, this paper aims at measuring how air quality is incorporated in transaction prices in downtown Madrid. For that purpose, we use multilevel models since our sample is hierarchically organized into 3 levels. Our first-level consists of 5,080 house prices. The second level consists of 759 census tracts while the third level consists of 43 neighbourhoods. We have variables available for each level, individual characteristics for the first level and various socio-economic data for the other levels. The outline of the paper is as follows. First, we combine a set of noise and air pollutants measured at a number of monitoring stations available for each census tract. Second, we apply kriging to match the monitoring station records to the census data. Third, we estimate hedonic models in order to measure the marginal willingness to pay for air quality in downtown Madrid. While the conventional approach to estimate hedonic models is to use ordinary least squares, we exploit the hierarchical nature of our data and estimated multilevel models instead. These allow for a more reliable statistical inference.

Evaluating the temporal and the spatial heterogeneity of the European convergence process, 1980-1999

In this paper, we suggest a general framework that allows testing simultaneously for temporal heterogeneity, spatial heterogeneity and spatial autocorrelation in beta-convergence models. Based on a sample of 145 European regions over the 1980-1999 period, we estimate a Seemingly Unrelated Regression model with spatial regimes and spatial autocorrelation for two sub-periods: 1980-1989 and 1989-1999. The assumption of temporal independence between the two periods is rejected and the estimation results highlight the presence of spatial error autocorrelation in both sub-periods and spatial instability in the second sub-period, indicating the formation of a convergence club between the peripheral regions of the European Union.beta-convergence models, spatial autocorrelation, convergence clubs, temporal instability