Barriers to innovation and public policy in Catalonia

The present paper analyses the link between firms’ decisions to innovate and the barriers that prevent them from being innovative. The aim is twofold. First, it analyses three groups of barriers to innovation: the cost of innovation projects, lack of knowledge and market conditions. Second, it presents the main steps taken by Catalan Government to promote the creation of new firms and to reduce barriers to innovation. The data set used is based on the 2004 official innovation survey of Catalonia which was taken from the Spanish CIS-4 sample. This sample includes individual information on 2,954 Catalan firms in manufacturing industries and knowledge-intensive services (KIS). The empirical analysis reveals pronounced differences regarding a firm’s propensity to innovate and its perception of barriers. Moreover, the results show that cost and knowledge barriers seem to be the most important and that there are substantial sectoral differences in the way that firms react to barriers. The results of this paper have important implications for the design of future public policy to promote entrepreneurship and innovation together.

Redistributive taxation, public expenditure, and size of governent

We introduce a model of redistributive income taxation and public expenditure. This joint treatment permits analyzing the interdependencies between the two policies: one cannot be chosen independently of the other. Empirical evidence reveals that partisan confrontation essentially falls on expenditure policies rather than on income taxation. We examine the case in which the expenditure policy (or the size of government) is chosen by majority voting and income taxation is consistently adjusted. This adjustment consists of designing the income tax schedule that, given the expenditure policy, achieves consensus among the population. The model determines the consensus in- come tax schedule, the composition of public expenditure and the size of government. The main results are that inequality is negatively related to the size of government and to the pro-rich bias in public expenditure, and positively or negatively related to the marginal income tax, depending on substitutability between government supplied and market goods. These implications are validated using OECD data.

The effectiveness of market intervention policies to improve diet quality and to reduce the prevalence of obesity in Spain

Our project aims at analyzing the relevance of economic factors (mainly income and other socioeconomic characteristics of Spanish households and market prices) on the prevalence of obesity in Spain and to what extent market intervention prices are effective to reduce obesity and improve the quality of the diet, and under what circumstances. In relation to the existing literature worldwide, this project is the first attempt in Spain trying to get an overall picture on the effectiveness of public policies on both food consumption and the quality of diet, on one hand, and on the prevalence of obesity on the other. The project consists of four main parts. The first part represents a critical review of the literature on the economic approach of dealing with the obesity prevalence problems, diet quality and public intervention policies. Although another important body of obesity literature is dealing with physical exercise but in this paper we will limit our attention to those studies related to food consumption respecting the scope of our study and as there are many published literature review dealing with the literature related to the physical exercise and its effect on obesity prevalence. The second part consists of a Parametric and Non-Parametric Analysis of the Role of Economic Factors on Obesity Prevalence in Spain. The third part is trying to overcome the shortcomings of many diet quality indices that have been developed during last decades, such as the Healthy Eating Index, the Diet Quality Index, the Healthy Diet Indicator, and the Mediterranean Diet Score, through the development of a new obesity specific diet quality index. While the last part of our project concentrates on the assessment of the effectiveness of market intervention policies to improve the healthiness of the Spanish Diet Using the new Exact Affine Stone Index (EASI) Demand System.

The migration towards Digital Terrestrial Television: challenges for public policy and public broadcasters

This paper initially identifies the main transformations of the television system that are caused by digitalization. Its development in several broadcasting platforms is analyzed as well as the particular obstacles and requirements that are detected for each of them. Due to its technical characteristics and its historical link to the public services, the terrestrial network requires migration strategies different from those strictly commercial, and public intervention might be needed. The paper focuses on such migration strategies towards DTT and identifies the main issues for public intervention in the areas of the digital scenario: technology, business and market transformation and the reception field. Moreover, it describes and classifies the challenges that public broadcasters should confront due to digitalization. This paper finally concludes that the leadership of the public broadcasters during the migration towards DTT is an interesting tool for public policy. The need for foster the digitalization of the terrestrial platform and to achieve certain social and public goal besides the market interest brings an opportunity for public institutions and public broadcasters to work together. That leading role could also be positive for the public service to face its necessary redefinition and reallocation within the digital context.

Do women in female-dominated occupations exit the labour market more? Evidence from Italy, Spain, Denmark and the UK

Literature on sex occupational segregation has typically focused on the micro and macro determinants of it, on mobility patterns over the life course, on implications of segregation and mobility for gender inequalities. Rarely the link between sex-type occupations and women’s risk of labour market interruptions over family formation has been explored. In this piece of work we shall analyse whether women who are working in the female-dominated, male-dominated or integrated occupations have more or less chances to remain attached to the labour market, controlling for qualifications, class, sector and contract positions. By drawing from ECHP, and comparing Italy, Spain, Denmark and the UK, we shall in particular see whether such connection varies across countries with different institutional and cultural configurations.We find that, ceteris paribus, only in the UK the sex-composition of an occupation matters: women in female occupations are more likely to move to inactivity than women in mixed or male occupations. In the other countries considered the main cleavages lie elsewhere. In Italy what matters most is the sector of employment (public vs. private). In Spain the sector is relevant too, but also social class and the type of contract held (permanent vs. temporary). In Denmark women’s transitions to inactivity are largely independent of human capital and job characteristics.

Pharmaceutical Generics, Vertical Product Differentiation, and Public Policy

This paper studies oligopolistic competition in off-patent pharmaceutical markets using a vertical product differentiation model. This model can explain the observation that countries with stronger regulations have smaller generic market shares. It can also explain the differences in observed regulatory regimes. Stronger regulation may be due to a higher proportion of production that is done by foreign firms. Finally, a closely related model can account for the observed increase in prices by patent owners after entry of generic producers.

Market and institutional determinants in the regulation of conveyancers

Demand for law professionals in the conveyancing of property is decreasing because of market and institutional changes. On the market side, many transactions feature large, well-known parties and standardized transactions, which make professionals less effective or necessary for protecting the parties to private contracts. On the institutional side, public titling makes it possible to dispense with a broadening set of their former functions. Recording of deeds made professionals redundant as depositories of deeds and reduced demand for them to design title guarantees. Effective registration of rights increasingly substitutes professionals for detecting title conflicts with third parties and gathering their consent. Market changes undermine the information asymmetry rationale for regulating conveyancing, while institutional changes facilitate liberalizing not only conduct but also license regulations. These arguments are supported here by disentangling the logic of titling systems and presenting empirical evidence from the European and USA markets.

The impact of the reference price system on the pharmaceutical market: A theoretical approach

This article analyses the impact of the reference pricesystem on the price-setting strategies of thepharmaceutical firms and on the level of generic usage.This model is the first to take explicitly into accountthe impact of the reference price mechanism on the levelof competition between brand-name and generic drugs andnational pharmaceutical spending. We consider aduopolistic model with one firm producing the brand-namedrug, whose patent has already expired, and the otherproducing the corresponding generic version. We work ina partial equilibrium framework where firms set pricessequentially and consumers face heterogeneous switchingcosts.We show that brand producers compensate thedecline of profits by selling greater quantities insteadof charging higher prices, thus fostering pricecompetition in the pharmaceutical market. This result isa consequence of both the assumption of a verticallydifferentiated model and the introduction of thereference price system.

Employment consequences of restrictive permanent contracts: Evidence from Spanish labor market reforms

Temporary employment contracts allowing unrestricted dismissals wereintroduced in Spain in 1984 and quickly came to account for most new jobs.As a result, temporary employment increased from around 10% in themid-eighties to more than 30% in the early nineties. In 1997, however,the Spanish government attempted to reduce the incidence of temporaryemployment by reducing payroll taxes and dismissal costs for permanentcontracts. In this paper, we use individual data from the Spanish LaborForce Survey to estimate the effects of reduced payroll taxes anddismissal costs on the distribution of employment and worker flows. Weexploit the fact that recent reforms apply only to certain demographicgroups to set up a natural experiment research design that can be usedto study the effects of contract regulations. Our results show that thereduction of payroll taxes and dismissal costs increased the employmentof young workers on permanent contracts, although the effects for youngwomen are not always significant. Results for older workers showinsignificant effects. The results suggest a moderately elastic responseof permanent employment to non-wage labor costs for young men. We alsofind positive effects on the transitions from unemployment and temporaryemployment into permanent employment for young and older workers, althoughthe effects for older workers are not always significant. On the otherhand, transitions from permanent employment to non-employment increasedonly for older men, suggesting that the reform had little effect ondismissals.

Review of the literature on reference pricing

This paper reviews the literature on reference pricing (RP) in pharmaceutical markets. The RP strategy for cost containment of expenditure on drugs is analyzed as part of the procurement mechanism. We review the existing literature and the state-of-the-art regarding RP by focusing on its economic effects. In particular, we consider: (1) the institutional context and problem-related factors which appear to underline the need to implement an RP strategy; i.e., its nature, characteristics and the sort of health care problems commonly addressed; (2) how RP operates in practice; that is, how third party-payers (the insurers/buyers) have established the RP systems existing on the international scene (i.e., information methods, monitoring procedures and legislative provisions); (3)the range of effects resulting from particular RP strategies (including effects on choice of appropriate pharmaceuticals, insurer savings, total drug expenditures, prices of referenced and non-referenced products and dynamic efficiency; (4) the market failures which an RP policy is supposed to address and the main advantages and drawbacks which emerge from an analysis of its effects. Results suggest that RP systems achieve better their postulated goals (1) if cost inflation in pharmaceuticals is due to high prices rather than to the excess of prescription rates, (2) when the larger is the existing difference in prices among equivalent drugs, and (3) more important is the actual market for generics.

Pharmaceutical generics, vertical product differentiation and public policy

This paper studies oligopolistic competition in off-patent pharmaceuticalmarkets using a vertical product differentiation model. This model canexplain the observation that countries with stronger regulations havesmaller generic market shares. It can also explain the differences inobserved regulatory regimes. Stronger regulation may be due to a higherproportion of production that is done by foreign firms. Finally, a closelyrelated model can account for the observed increase in prices by patentowners after entry of generic producers.

The impact of generic reference pricing interventions in the statin market

The objective of this study was to evaluate the intended and unintended impact on pharmaceutical use and sales of three public financing reforms applied to the prescription of statins: a Spanish generic reference pricing (RP) system for lovastatin and simvastatin, and two competing policies introduced by the Andalusian Public Health Service (APHS) for all statins, first a maximum consumer price (MCP) and then a so called quality prescribing incentive for general practitioners (MCP plus PI).This study is designed as an observational, retrospective, interrupted time series analysis with comparison series (APHS and the rest of Spain) of 46 monthly drug use and sales ratios from January 2001 to October 2004 for each active ingredient in the group of statins.RP has been effective at reducing the volume of sales growth of the off-patent statins, yet its overall impact on sales of all statins has been relatively modest. The quantity and volume of sales impact heavily depends on regulatory RP details such as when the system is introduced, how often it is updated, and how the reference price is calculated.

The labor market effects of payroll taxes in a middle-income country: Evidence from Colombia

We use a panel of manufacturing plants from Colombia to analyze how the risein payroll tax rates over the 1980 s and 1990 s affected the labor market.Our estimates indicate that formal wages fall by between 1.4% and 2.3% as aresult of a 10% rise in payroll taxes. This 'less-than-full-shifting' islikely to be the result of weak linkages between benefits and taxes and thepresence of downward wage rigidities induced by a binding minimum wage inColombia. Because the costs of taxation are only partly shifted fromemployers to employees, employment should also fall. Our results indicatethat a 10% increase in payroll taxes lowered formal employment by between4% and 5%. In addition, we find less shifting and larger disemploymenteffects for production than non-production workers. These results suggestthat policies aimed at boosting the relative demand of low-skill workers byreducing social security taxes on those with low earnings may be effectivein a country like Colombia, especially if tax cuts are targeted to indirectbenefits.

Effects of employment protection and product market regulations on the Italian labor market

Labor market regulations have often being blamed for high and persistentunemployment in Europe, but evidence on their impact remains mixed. Morerecently, attention has turned to the impact of product market regulationson employment growth. This paper analyzes how labor and product marketregulations interact to affect turnover and employment. We present a matchingmodel which illustrates how barriers to entry in the product market mitigatethe impact of labor market deregulation. We, then, use the Italian SocialSecurity employer-employee panel to study the interaction between barriersto entry and dismissal costs. We exploit the fact that costs for unjustdismissals in Italy increased for firms below 15 employees relative to biggerfirms after 1990. We find that the increase in dismissal costs after 1990decreased accessions and separations in small relative to big firms,especially for women. Moreover, consistent with our model, we find evidencethat the increase in dismissal costs had smaller effects on turnover for womenin sectors faced with strict product market regulations.

The impact of firing costs on turnover and unemployment: Evidence from the Colombian labour market reform

Reductions in firing costs are often advocated as a way of increasingthe dynamism of labour markets in both developed and less developed countries. Evidence from Europe and the U.S. on the impact of firing costs has, however, been mixed. Moreover, legislative changes both in Europe and the U.S. have been limited. This paper, instead, examines the impact of the Colombian Labour Market Reform of 1990, which substantially reduced dismissal costs. I estimate the incidence of a reduction in firing costs on worker turnover by exploiting the temporal change in the Colombian labour legislation as well as the variability in coverage between formal and informal sector workers. Using a grouping estimator to control for common aggregate shocks and selection, I find that the exit hazard rates into and out of unemployment increased after the reform by over 1% for formal workers (covered by the legislation) relative to informal workers (uncovered). The increase of the hazards implies a net decrease in unemployment of a third of a percentage point, which accounts for about one quarter of the fall in unemployment during the period of study.