Rossella Bardazzi

Value-Added Taxes and Other Indirect Taxes in an EEC Country Model: The Italian Case

Value-added taxes and other indirect taxes pose a special challenge to the I–O model builder. Because they affect price formation, they should be included in a model with a developed nominal side. This paper describes the treatment of indirect taxes in the Italian table. It recognizes that firms are not always able to deduct all VAT paid on inputs. It outlines the treatment of indirect taxes in INTIMO.

Is it Time for a Revival of ETR in Italy? Energy Elasticities and Factor Substitutability for Manufacturing Firms

Environmental Tax Reforms (ETRs) have recently enjoyed renewed widespread attention as a tool aimed at GHG emission abatement. In this paper the efficacy of energy-related taxes in relation to Italian firms’ behaviour is analyzed. A translog model is used to estimate factor demands for a panel of industrial firms divided between small-medium and large enterprises. Our analysis estimates large and negative own price elasticities for energy. As for other inputs, we find complementarity between energy and capital and substitutability between energy and labour for small firms therefore a double dividend effect could take place if ETR is implemented.

A Reduction in Social Security Contributions: Which Alternatives for Financing Coverage?

This paper uses the INTIMO model of the Italian economy to analyze the economic impacts of a reduction in social security contributions. This manoeuvre is intended to reduce the tax wedge on labour cost. There is a wide choice of ways to neutralize the revenue effects of a lower tax yield, because several of the existing taxes could be increased and new ones could be introduced. In this study, alternative financing coverages are developed and applied in the model. The results of the study show that substituting different taxes for social security contributions affects the cost of production, and impacts vary with industries. A reduction in contributions compensated for by an increase in value-added tax produces the best results in terms of short-term economic indicators, but the improvement in environmental conditions—not analyzed in this study—achieved by energy taxes could be a very important target and could justify the recourse to this tool.

Atypical work: a threat to labour productivity growth? Some evidence from Italy

Abstract Various theories suggest the existence of a negative relationship between the use of atypical employment contracts and productivity growth, arguing that firms’ utilisation of atypical contracts may reduce the incentive to innovate and internal training, inducing firms to follow a ‘low-road’ to competitiveness, based upon cost-cutting strategies. This paper aims to provide new evidence on the occurrence of these effects in the Italian economy, where changes in labour legislation from the mid-Nineties onwards, associated with an ‘institutional’ wage moderation period, have brought about a significant process of job creation, but also an appreciable slowdown in labour productivity. This issue is investigated using a microeconomic approach, taking a rich source of microdata for firms and estimating a dynamic model for labour productivity on a pseudo-panel of firms for the period 2003-2008. The results support the hypothesis of a negative impact of external labour flexibility on labour productivity growth at firm level, such effect proving stronger for small and medium than for large enterprises and of varying magnitude for the different atypical contracts.

Firms' energy demand and the role of energy taxes: Elasticities estimation of industrial firms in Italy

In this paper we investigate interfuel substitution in the Italian industrial sector using a micro-dataset and a micro-simulation model for firms. According to our estimates there are significant differences between small and large firms. Energy demand of main energy products is not very responsive to relative price changes in the case of firms under 250 workers, whereas higher (negative) own elasticities have been estimated for larger firms, suggesting that price signals are most effective in the latter case. Most of the cross-price elasticities have positive signs, confirming that there is room for a change in energy product mix, which may also be stimulated by a careful excise tax rate design.

Public Policies and the Energy Mix in Italy: Where Do We Stand?

Given the almost complete energy dependency and the consequently high sensitiveness to energy security in Italy, energy efficiency and a significant renewable share in the national energy mix are key goals of energy policy. Although the energy intensity of the Italian economy is among the lowest in western countries, there is room for further improvements pursuing economic growth without increasing the energy use (decoupling). Indeed the high Italian energy efficiency has been stimulated by import dependence and relatively high energy prices, because the economic system proved to be very reactive to selective price incentives towards energy products. Notwithstanding these premises, the general coherence and efficacy of the current framework—a bundle of excise taxes, direct subsidies, feed-in tariffs and tax expenditure together with the launch of an auction-based ETS phase—is highly questionable. Therefore, a progressive evolution of support mechanisms for renewable and energy efficiency to a more cost-effective and market-based system is strongly encouraged. This chapter outlines the current complex incentive system, highlighting incoherencies and successes, and discusses a proposal for a general reform that includes, in accordance with the European Commission proposal, a carbon taxation.

Accise energetiche e competitività nelle imprese : un'applicazione sull'esperimento della carbon tax.

An international debate on which economic instrument should be used to reduce pollutant emissions has begun since the nineties when the awareness of climatic risks aroused and first attempts to introduce a European carbon tax were made. Although this project failed, several national programmes of carbon/energy taxes have been developed with a common concern for industrial competitiveness of energy and/or carbon-intensive firms. Therefore, double dividend schemes have been applied to reduce existing distorsive taxes while introducing a higher burden on energy products. This paper reviews the most important European case studies and analyses the effects of the introduction of a carbon tax in Italy on energy expenditure and economic profitability of Italian manufacturing enterprises. This tax has been introduced in 1998 and should have progressively increased up to the final tax rates in 2005. However, this process halted in the year 2000 as the world energy prices increased and the ultimate rates have never been applied. Nonetheless, our analysis offers relevant insights both because energy excises are a major instrument in environmental policy and because industrial activities affected by energy taxes will also be affected by the tradable permits scheme recently adopted by the European Union. The study is performed with a microsimulation model to simulate changes in energy excises and the associated reduction of social contributions to achieve the double dividend. Existing empirical analyses have usually been carried out at aggregate or sectoral level, but the effects on costs both of carbon tax and of compensative measures differ at the firm level, thus it is significant to study the impact on economic profitability on individual units of analysis. The data show that energy expenditure as a component of intermediate costs varies by economic activity as well as the energy mix used in the production process, thus suggesting possible competitiveness problems for some firms as taxation is linked to the carbon content of each energy source. A further element is the sectoral and dimensional variability of prices of some energy products which introduces an additional information to evaluate the impact of rising international energy quotations. The empirical results show a large sectoral and dimensional differentiation of economic effects although the estimated impact on competitiveness is negligible for most sectors. The difference is due to the energy intensity of production and to the energy mix for each process as well as to the quantity of labour employed. In general, the tax burden in the year 2000 has produced fiscal savings compared to the previous tax rules, as the reduction of social contributions has been higher than the cost due to the carbon tax. However, some exceptions occur: economic activities where heavily-taxed products are used such as coal and coke are not fully compensated by the social contribution cut: this is the case of metal products and the production of non metallic mineral products. Moreover, small and medium enterprises benefited more than large industrial firms. As the EU tradable permits scheme will fully come into force and a policy mix of excises and permits on energy products will deploy its effects on the same group of energy-intensive firms, this set of fiscal environmental rules is likely to produce dissimilar effects by economic sectors and by firm size which are worth investigating.

Trade, competitiveness and investment: an empirical assessment

ABSTRACT The Eurozone crisis has exposed several weaknesses of the European Monetary Union economies. This paper aims to assess the impact on external competitiveness of an expansionary capital stock policy that could contribute to reduce the trade balance asymmetries within the EU and help European exporters to recover their competitive role in international markets. A policy action to increase capital stock accumulation through investment in selected European countries could generate a double dividend: increasing both price and nonprice competitiveness, so stimulating their competitive position as exporters, and consolidating the growth path of EU economy. The analysis employs a bilateral trade model built at INFORUM with several distinguishing characteristics: a comprehensive bilateral data set, econometric estimation of key parameters, and emphasis on sectoral details. Our findings show that a capital stock increase is effective in narrowing trade imbalances within EU. Heterogeneous effects are estimated for commodities in China and the US.

Enhancing European Energy and Climate Security: Eastern Strategic Partners, Unconventional Sources and Public Policies

Energy security has become a heavily discussed topic due to rising energy demand worldwide, increasing import dependence in many European countries, geopolitical tensions and conflicts and the need for a regulatory and policy response. The papers collected in this volume aim at analyzing how energy security in Europe influences international relations and environmental issues with a multidisciplinary perspective, corresponding to the book three sections: international relations, focusing on Eastern EU partners; energy economics, highlighting the current unconventional hydrocarbons revolution and its impact on EU energy and climate strategies; public policy perspective, with the analysis of EU policies and two case studies. The issues considered in the volume represent a selection of hot topics in the debate that are framed together by this introductory chapter where the editors give an overview of the research themes, outline the structure of the book and summarize the contents of the individual chapters.

Is Health Care demand rationed by income and other determinants? An empirical assessment for Italy

The Italian national health service was funded in 1978 with the goal of providing uniform and comprehensive care under the inspiration of the Republic’s Constitution. It is important to assess to what extent the health service meets the potential demand of the population and if the socio-economic status of the patient - mainly income and education - may ration the access to healthcare. This paper offers an empirical assessment of the determinants of healthcare demand in Italy for a detailed range of services including diagnostic tests and hospital services, not often analyzed in the empirical literature. An econometric hurdle model is applied to individual microdata from a large-scale survey. From our results, some accessibility problems seem to arise for persons who have fewer alternatives in the private market - with lower income, less educated, not privately insured - and living in the Southern part of the country.