Returns to Education in Europe – Detailed Results from a Harmonized Survey

We use the European Community Household Panel, a harmonized data set covering the countries of the European Union, to provide detailed estimates of the returns to education. Our results can be summarized as follows. Firstly, average returns to education have been mostly stable during the second half of the 1990s and are highest in Portugal and Ireland and lowest in the UK and Italy. Secondly, returns to schooling are significantly negatively related to the educational attainment of the population. Thirdly, for most countries we find significant cohort effects and these are in general uniform across countries implying lower returns to education for younger cohorts. Fourthly, in most countries schooling exerts a significantly stronger impact on wages at the top of the wage distribution, aggravating within-group inequality. Finally, we provide evidence that the more pronounced the difference in returns to education along the wage distribution, the higher the average return to education.Returns to schooling, cohort effects, quantile regression

Human Capital and Economic Growth in OECD Countries

The results of the PISA 2000 study renewed the interest in the contribution of human capital to economic growth. So far the exploration of large country comparisons delivered rather mixed results. Concentrating on those OECD member countries which participated in PISA 2000, this paper uses panel data estimation techniques to refine this analysis. Estimation results reveal a positive impact of the human capital stock on economic growth suggesting that an increase in the average schooling years by one year yields a rise in the GDP growth rate of about 0.5 percentage points. However, when taking possible endogeneity into account in an instrumental variables approach, these conclusions on the impact of the level of human capital on economic growth is demonstrated to be rather fragile.Human capital accumulation, Convergence, Fixed-effects estimation, Instrumental variable estimation

Characterizing Movements of the U.S. Current Account Deficit

It is unclear whether the exceptionally highU.S. current account deficit can be sustained for a prolonged period. In this paper we approach the topic whether a gradual adjustment or a pronounced reduction of the deficit is likely to occur. We therefore characterize the dynamics of the current account deficit movements by a three-regime Markov-Switching model. Our finding is that it is possible to distinguish a regime of a strong increasing deficit, a just slightly increasing deficit and a regime of a deficit reduction. Furthermore we find that movements of the deficit are asymmetric.Whereas expansions of the current account deficit are long lasting, reductions of the deficit are rather short. This implies that a pronounced reduction is not likely to occur. Secondly we try to uncover determinants of regime shifts of the current account. Applying ordered Logit models we conclude that a combination of U.S. inflation, U.S. investment and share prices predicts pronounced changes in the current account deficit quite reliably.Markov-Switching Model, Ordered Logit, Indicators

Investment, Internal Funds and Public Banking in Germany

Previous studies argued that low investment-cash flow sensitivities of German firms may be caused by dominance of public banking.The paper addresses this topic and applies a unique accounting dataset of German firms. Results from a dynamic panel data approach show that the dependence of investment spending on internal funds does not significantly differ between firms attached to savings banks, cooperative banks or commercial banks. Thus, the importance of the public banking sector in Germany may not explain the rather low dependence of firms on internal funds and public ownership of borrowers seems not essential to reduce financing constraints.Investment, Relationship Banking, Panel Data,GMM

Investment, Internal Funds and Public Banking in Germany

Previous studies argued that low investment-cash flow sensitivities of German firms may be caused by dominance of public banking.The paper addresses this topic and applies a unique accounting dataset of German firms. Results from a dynamic panel data approach show that the dependence of investment spending on internal funds does not significantly differ between firms attached to savings banks, cooperative banks or commercial banks. Thus, the importance of the public banking sector in Germany may not explain the rather low dependence of firms on internal funds and public ownership of borrowers seems not essential to reduce financing constraints

Grease ice in basin-scale sea-ice ocean models

The first stage of sea-ice formation is often grease ice, a mixture of sea water and frazil ice crystals. Over time, grease ice typically congeals first to pancake ice floes and then to a solid sea-ice cover. Grease ice is commonly not explicitly simulated in basin-scale sea-ice ocean models, though it affects oceanic heat loss and ice growth and is expected to play a greater role in a more seasonally icecovered Arctic Ocean. We present an approach to simulate the grease-ice layer with, as basic properties, the surface being at the freezing point, a frazil ice volume fraction of 25%, and a negligible change in the surface heat flux compared to open water. The latter governs grease-ice production, and a gradual transition to solid sea ice follows, with ∼50% of the grease ice solidifying within 24 hours. The new parameterization delays lead closing by solid ice formation, enhances oceanic heat loss in fall and winter, and produces a grease-ice layer that is variable in space and time. Results indicate a 10-30% increase in mean winter Arctic Ocean heat loss compared to a standard simulation, with instant lead closing leading to significantly enhanced ice growth