Funded by the Seventh Framework Programme of the European Union

Working Papers

Listed below are the Working Papers to date from SPINTAN. We hope you find them of interest, please feel free to contact the corresponding author or SPINTAN (info@spintan.net) with your comments.

  • SPINTAN Working Paper No. 23
    A proposal for disentangling funded R&D (GBARD) by industry
    Matilde Mas, Eva Benages, Juan Fernández de Guevara, Laura Hernández
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    In this paper we develop a methodology to disentangle public R&D expenditure (GBARD) by NACE industries and to identify the part devoted to ICT assets within each sector. We start from the methodology developed by Stančik (2012). Essentially, our methodology is based on the definition of a NACE-NABS correspondence and the construction of proper weights to assign GBARD by NABS into each NACE industry. The weights are based on the assumption that R&D intensity in each industry is related to the share of labour costs of employees with higher education over total labour costs. Finally, to compute the part of R&D expenditure devoted to ICT assets in each NACE industry, we assume that it is proportional to the share of labour costs of employees with higher education performing ICT occupations. The methodology is applied to the European Union and the Member States since 2006. The database comprises 37 NACE Rev. 2 industries.

    DOI https://dx.medra.org/10.12842/SPINTAN-WP-23

  • SPINTAN Working Paper No. 22
    Real time estimation for policy analysis
    Fabio Bacchini, Roberto Iannaccone
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    Usually last data for intangible assets are available when data for use table are released that is, at least for European statistical system, more than 2 years from the reference period. However policy makers need updated pictures for a fine tuning of their political proposal. To fill this gap, this paper proposes a methodology for real time estimation that take explicitly into account the heterogeneity of the intangible assets. Particularly for the assets related to the use table we present a three step procedure that uses all the most recent information available from national account and in Short-Term Statistics domain. The procedure has been applied using as case study Italian economy obtaining a provisional picture of the nominal investment in intangible that can be more timely.

    DOI https://dx.medra.org/10.12842/SPINTAN-WP-22

  • SPINTAN Working Paper No. 21
    Investment in organisational capital: methodology and panel estimates
    Marie Le Mouel, Luca Marcolin, Mariagrazia Squicciarini
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    This work proposes a task-based methodology for the measurement of employment and investment in organisational capital (OC) in OECD countries. OC is defined as firm-specific organisational knowledge resulting from the performance of tasks affecting the long-term functioning of firms. Country-specific occupations accruing to the generation of OC are identified on cross-country worker data reported in the OECD Programme for the International Assessment of Adult Competencies (PIAAC). In-house investment in OC is then estimated à la Corrado, Hulten and Sichel (2009) as 20% of wages paid to OC-related occupations. Total investment in OC for 2012 is found to range from 1.4% of value added in the Czech Republic to 3.7% in the United Kingdom, with an average 2.2% across all countries. Managers appear to account for less than half of total employment and investment in OC, with total investment in OC is higher in services than in manufacturing. Extending the methodology to estimate a panel of industry-level investment for 20 EU countries and the U.S. yields similar patterns. Experimental figures of OC investment for the public sector suggest that intensity in investment in OC appears to be higher in the public sector than in the private sector.

    DOI https://dx.medra.org/10.12842/SPINTAN-WP-21

  • SPINTAN Working Paper No. 20
    The role of intangibles in school performance: a case study for England
    Lucy Stokes, David Wilkinson, Alex Bryson
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    This paper explores the role of intangibles in schools, through a case study for England. The education sector forms a significant part of the public sector; in the UK, expenditure on education accounted for around 11 per cent of total public spending in 2014-15 (HM Treasury, 2015). A better understanding of the role and extent of intangible investment in schools therefore has the potential to make an important contribution to measurement of intangibles in the public sector overall. In this paper we focus specifically on the role of organisational capital. We make use of administrative data on the school workforce in England, which allows us to identify not only staff within the leadership group but also staff outside of the leadership group, such as classroom teachers, who hold leadership roles in addition to their teaching post. We find evidence of considerable variation in organisational capital across secondary schools in England. Our results indicate a positive and statistically significant association between organisational capital and school performance, measured in terms of attainment. We also find evidence to support the notion that organisational capital is not just embodied in senior leaders, but also in others within the workforce who contribute to leadership and management. We also explore changes in leadership in response to school inspection, with the aim of exploring whether schools make changes to organisational capital following inspection, particularly if they obtain a poor inspection result. We find some evidence in support of this; as schools rated satisfactory show an increase in the relative size of their broader leadership group following inspection. Overall, our analysis provides tentative evidence that organisational capital matters for school performance. Furthermore, the results provide further support for the importance of considering contributions to organisational capital beyond those made by individuals in the main leadership group.

    DOI https://dx.medra.org/10.12842/SPINTAN-WP-20

  • SPINTAN Working Paper No. 19
    Measuring Education Services as Intangible Social Infrastructure
    Carol Corrado, Mary O’Mahony, Lea Samek
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    The starting point for this paper is that society's consumption of education services is the acquisition of schooling knowledge assets whose change in value should be included in saving and net investment. We estimate the nominal value of education services produced by the public sector by using the Jorgenson- Fraumeni lifetime income approach. Enrolments by education type are multiplied by the amount by which lifetime earnings at that age, sex, and education change with additional qualifications taking account of the extra time required to achieve that additional education. Implementing this approach requires a number of assumptions on estimating wages net of experience, taking account of international students who pay for the cost of their tuition, survival rates, the discount rate and deflators. The model is estimated using data for the UK under a range of assumptions. The ratio of our preferred measure to education expenditures is just under three, suggesting that society obtains a very high economic benefit from education.

    DOI https://dx.medra.org/10.12842/SPINTAN-WP-19

  • SPINTAN Working Paper No. 18
    A Valuation of the Long-Term Socioeconomic Contributions of the European Higher Education Institutions
    José Manuel Pastor, Lorenzo Serrano, Ángel Soler
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    This study analyses the contribution of Higher Education Institutions (HEIs) to the socio-economic development of the EU and each of its 28 members over the period 2000-2014. For this purpose, we examine the contributions of HEIs both through their educational and research activities. In the first case, we take into account the direct impact of higher education on the human capital of individuals, as well as the indirect impact on employment rates given the greater participation and employability, ceteris paribus, of people with higher education. In the second case, we study the contribution of the R&D of HEIs to technological capital. To carry out the analysis, counterfactual scenarios which assume that HEIs do not exist are estimated for each country. These counterfactual scenarios serve as a reference to estimate the impact of HEIs, applying techniques of growth accounting. The results obtained indicate that HEIs are a significant source of growth in EU countries, also contributing to mitigating the adverse effects of the periods of crisis. For the whole of the EU, the estimates show that GDP per capita would currently be more than one fifth higher than that corresponding to a scenario without HEIs. The results obtained also show the differences in GDP per capita between EU countries of up to 15% associated with the activity of HEIs.

    DOI https://dx.medra.org/10.12842/SPINTAN-WP-18

  • SPINTAN Working Paper No. 17
    Public ICT investment in reaction to the economic crises – a case study on measuring IT-related intangibles in the Public Sector
    Marianne Saam, Laura Weinhardt, Lukas Trottner
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    In this paper, we (1) analyze the German public IT-spending programme 2009-11 adopted after the crisis in terms of its tangible vs. intangible output, (2) consider this relatively well-described programme as a use case for categorizing IT-related intangibles in government beyond software in (including e.g., IT-training, innovation in e-services), (3) investigate how to form insightful aggregates of intangible IT-related investment from project level data and, in comparison, from the regular public budget in Germany. Based on project descriptions, we find out that half of the spending was on IT security-related projects. According to our estimations based on quantitative information, qualitative information and approximations, about half of the total spending was on intangibles, of which again about half went into software and a quarter into consulting. As an outputbased measure some assets created in the programme, we propose the category “concepts”.

    DOI https://dx.medra.org/10.12842/SPINTAN-WP-17

  • SPINTAN Working Paper No. 16
    Public Investment in R&D in reaction to economic crises – a longitudinal study for OECD countries
    Maikel Pellens, Bettina Peters, Christian Rammer, Georg Licht
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    The paper investigates the reaction of public R&D spending on economic crises. We are interested in two counteracting motives: On the one hand, public R&D spending can be seen as a means to fight the crisis, and governments may decide to increase their R&D budgets. On the other hand, a crisis reduces public income and urges governments to cut spending, which may negatively affect public R&D budgets. Using panel data from 26 OECD countries over the period 1995 to 2015, we investigate how public R&D expenditure changes over the business cycle for different types of government R&D expenditure. On average, we find evidence for a strong pro-cyclical effect on public R&D investments. But country heterogeneity matters. Whereas European innovation leaders and non-EU countries pursue a counter-cyclical strategy, innovation followers and moderate innovators behave pro-cyclical. This leads to an increasing innovation gap in Europe. Short-run and long-run financing conditions (budget surplus and government debt levels) also significantly affect public R&D spending. However, there is no evidence that economic crises systematically affect the composition of public R&D spending along different thematic areas or by beneficiaries.

    DOI https://dx.medra.org/10.12842/SPINTAN-WP-16

  • SPINTAN Working Paper No. 15
    Intangible capital: Complement or substitute in the creation of public goods?
    Alexander Schiersch, Martin Gornig
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    This paper tests whether intangible capital is a substitute or, to some degree, a complement to standard inputs in the production process. The analysis is conducted for public sectors in which governmental institutions are directly responsible for both, efficiently producing public goods as well as for the investment in new production factors. Knowing the substitutability of inputs is important for achieving the best possible result for the invested money, inter alia, when designing stimulus programs. The analysis is carried out using threeinput two-level nested value added CES production functions. The analysis reveals that intangible capital is just weakly substitutable with other inputs. This result implies that any investment plan or any stimulus program should not just focus on tangible assets, but also needs to include investments in intangibles in order to achieve the maximum output and to efficiently use public money. It also follows that investment programs for tangible assets should not be undermined by austerity programs focused on intangible assets.

    DOI https://dx.medra.org/10.12842/SPINTAN-WP-15

  • SPINTAN Working Paper No. 14
    Structural changes in Public Expenditures in the European Union since 2008 – with special regard to new member states
    Éva Palócz, Zoltán Matheika, Péter Vakhal
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    This paper analyses the reasons for growing size and the change in the structure of public expenditures in the European Union since 2007, with special regard to the New Member States (NMS). In the first part, by using the decomposition technic, the increase of expenditure ratio-to-GDP will be separated to 1) the impact of the change in GDP and 2) the effect of the change of actual public expenditures. The calculation shows that in 2009, mainly the fall of GDP was responsible for the rise in the expenditure ratio. This means that the “automatic stabilizer” was more important in shaping the fiscal trends in the year of the acute crisis than the demand-boosting actions. Taken, however, the entire period since 2008, the higher expenditure ratio in 2014 can exclusively explained by the expenditure effect. Beyond the average, there is a great variety both in the old and in the new member states. Concerning the structure of raising expenditure ratio, the paper uses the COFOG statistics measured by the share in GDP. The main characteristic of the changes can be summarized by the growing share of expenditures on social protection and health since 2008, in the EU28 average. In NMS, however, the share of expenditures on social protection decreased since the global crisis.

    DOI https://dx.medra.org/10.12842/SPINTAN-WP-14

  • SPINTAN Working Paper No. 13
    Organisational capital and hospital performance in Hungary
    Antónia Hüttl, Ágnes Nagy
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    The paper presents a case study exploring the possibilities to measure own-account organisational capital and its impact on hospital performance in Hungary. The comparable dataset consists of the time series 2010- 2013 of 58 general hospitals owned by the government. Investment in own-account OC is measured both in a narrow and in a broad sense, depending on the range of employees contributing to OC. In the period according to our estimates, applying the narrow concept the average stocks of OC varied between 2,5-4,3% of the wages of all employees, and between 11,3-12,3% in the broad concept. The analysis has provided some evidence that the stocks of OC in broad sense has a slight positive effect on clinical performance, measured by the cost weighted number of activities. Applying OC in the narrow sense, a positive correlation could be detected only if higher values have been attached to DRGs of complicated interventions and of treatment of serious diseases.

    DOI https://dx.medra.org/10.12842/SPINTAN-WP-13

  • SPINTAN Working Paper No. 12
    Organisational capital and hospital performance in England
    Mary O’Mahony, Silvia Beghelli, Lucy Stokes
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    This paper explores the relationship between organisational capital and hospital performance in England, for the period 2010/11 to 2013/14. We construct measures of investment in organisational capital for NHS Acute Trusts (as hospitals in England are managed by Trusts) and investigate whether investment in this form of intangible asset is related to Trust performance. We measure investment in organisational capital in terms of payments to managers, in line with the approach developed by Corrado, Hulten and Sichel (2005, 2009). Squicciarini and Le Mouel (2012) argue that, particularly in public services, occupations other than managers also contribute to organisational capital. Our data allow us to identify both general managers and clinical managers, and we therefore include both types of manager within our measure of organisational capital. We find that, in aggregate, investment in organisational capital in NHS Trusts has been increasing over the period of our analysis. This has been driven primarily by increases in organisational capital in terms of clinical managers; while the number of clinical managers has been increasing, on average, the number of general managers has remained relatively stable over this period. There is however considerable variation across NHS Trusts in the proportion of total staff in management roles. The relationship between organisational capital and Trust performance varies depending on the performance measure used. When Trust performance is considered in terms of cost-weighted output, we find little evidence of a relationship with investment in organisational capital, once controlling for other factors. There is however some evidence of a positive relationship between investment in organisational capital and cost-weighted output based on inpatient activity alone. This association is driven by investment in organisational capital in terms of clinical managers, rather than for general managers. The analysis also provides some evidence of a statistically significant relationship between investment in organisational capital and Trust performance in terms of mortality, with higher levels of investment in organisational capital in terms of clinical managers associated with better outcomes in terms of mortality. Our analysis provides tentative evidence that investments in organisational capital may matter for NHS Trust performance in England. Furthermore, given that statistically significant results typically focus on organisational capital in terms of clinical managers, the study provides further support for the argument that it is important to consider not only general managers in any analysis of organisational capital, but to also consider the broader contribution made by other professionals, at least within hospital settings.

    DOI https://dx.medra.org/10.12842/SPINTAN-WP-12

  • SPINTAN Working Paper No. 11
    Estimates of intangible investment in the public sector: EU, US, China and Brazil
    F. Bacchini, C. Corrado, J.Hao, J.Haskel, R. Iannaccone, M. Iommi, K. Jager, C. Jona Lasinio
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    The paper illustrates the methods used to generate measures of public intangible investment for 22 European countries in 1995-2011 and for US, China and Brazil over the period 1995-2013. We propose an estimation strategy that is consistent with National Accounts principles and with the theoretical framework developed in (Corrado, Haskel, Jona-Lasinio, 2015). The methodology is organized into two different steps depending on whether the intangible assets are capitalized in National Accounts or are accounted as intermediate costs. The paper offers also an overview of the main characteristics of the SPINTAN database. Finally, we provide some preliminary evidence on the dynamics and intensities of public intangible investment in the EU economies, US, China and Brazil.

    DOI https://dx.medra.org/10.12842/SPINTAN-WP-11

  • SPINTAN Working Paper No. 10
    Fiscal consolidation and crisis in the EU: exploring long-run supply-side effects through education
    Lorenzo Serrano, Ángel Soler, Laura Hernández
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    The aim of this paper is to analyze the possibility of long-run supply-side effects of fiscal consolidation on output through its effect on the education sector and human capital accumulation. It examines the effect of crisis and public expenditure austerity on European dropout rates and analyzes the effects of educational attainment on participation in the labour market, employability and labour productivity using EU-LFS and EU-SILC microdata. Some estimates of long-run impacts on output based on those results are provided for different scenarios. The analysis is carried out for the EU as a whole and also for those countries especially affected by fiscal consolidation. The results show that fiscal consolidation might affect negatively educational attainment when public expenditure on education is reduced. However, also as a result of the economic crisis, job opportunities for young people drastically decrease in the fiscal consolidation countries. This reduces the opportunity cost of studying, extending schooling, reducing dropout rates and fostering human capital accumulation. All in all, the latter effect would dominate any negative long-run supply-side effect from a lower level of public spending on education in the case of the EU countries.

    DOI https://dx.medra.org/10.12842/SPINTAN-WP-10

  • SPINTAN Working Paper No. 9
    Hospital performance and intangible investments: the impact of own account organizational capital
    Erika Schulz, Laura Beckmann
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    This paper used the employee embedded approach to measure the amount of investments in own account organizational capital as well as the impact of organizational capital on hospital performance in Germany. In hospitals managers of the three main professions: doctors, nurses and economists contribute to building organizational capital. Parts of their working were defined as investments in organizational capital. We find that in our selection of hospitals, one million Euros are invested each year in organizational capital, which is consistent with the findings of CHS (2005, 2009) for the US. Furthermore, we estimated several models to analyze the impact of organizational capital on hospital performance, using a variety of output indicators. We found significant and positive effects on quality adjusted output measures and labor productivity in all models. This includes the time as well as the wage weighted approach to labor input. As organizational capital is mainly constituted of nursing and medical staffing times and wages, we would thus conclude that investments into these professions have a positive effect on hospital performance. Additionally, we estimated several quality models to account for the special output of hospitals; patient treatment. For our quality regressions we selected a subgroup of patients with a set of diagnoses as basis for our output measures in order to be able to better compare the quality of treatment between hospitals. In this context positive output measures such as labor productivity might cause deterioration in quality due to higher work load. For this reason we estimated a separate model with the survival rate as the only dependent variable, in order to isolate the quality effect from the quantity effect. Our results show that the positive impact of organizational capital on hospital performance is mainly driven by quantity aspects. However, when talking about intangibles in the public sector, we believe that developing quality indicators would be a valuable contribution of future research.

    DOI https://dx.medra.org/10.12842/SPINTAN-WP-09

  • SPINTAN Working Paper No. 8
    Development of public spending structures in the EU member states: social investment and its impact on social outcomes
    Sebastian Leitner, Robert Stehrer
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    This paper analyses the changes in public spending structures in the EU Member States over the period 1995 to 2013 based on data on government expenditures by function (COFOG) with a focus on social expenditure categories health, education and social protection spending expressed in per capita terms in PPPs at constant prices. Expenditures increased in general in real terms, while large differences in spending levels are observed across countries. In EU countries which have been hit hard by the economic crisis cuts have been enacted. Furthermore the paper analyses the levels and changes of individual expenditures on health and education based on COICOP data (Classification of Individual Consumption by Purpose) across EU Member States. In an econometric analysis the effects of public and private expenditures on public health and other social outcomes are examined. Higher levels of public expenditures and lower levels of economic poverty are significantly correlated with superior population health and public welfare.

    DOI https://dx.medra.org/10.12842/SPINTAN-WP-08

  • SPINTAN Working Paper No. 7
    Fiscal consolidation and income distribution
    Francisco J. Goerlich, Laura Hernández
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    This working paper attempts to shed light on distributional effects of recent fiscal consolidation policies, mainly through the channel of in-kind public transfers. We look at the distribution of income in 16 EU countries during the recent global financial and economic crisis, and the subsequent period of fiscal consolidation. Experiences in terms of the depth of the recession and the policies implemented to deal with vary greatly across EU countries. We illustrate this diversity, and show how the crisis has accentuated the differences among EU countries, both in income levels and in inequality. The effects of the public sector on household income distribution have traditionally been measured through the effects of money transfers and taxes, but in developed economies in-kind transfers are of increasing importance. In our context, the analysis of in-kind transfers –mainly education and health– from a distributional perspective is of paramount importance, since fiscal consolidation programmes have led to a reduction in public expenditure in these services in many countries. We mainly use the EU Survey of Income and Living Conditions (EU-SILC), which allows us to track the distributional effects of public interventions in the economy, namely money transfer and taxes. For in-kind services we impute benefits at the individual level from the EUSILC database. Starting from aggregate figures, we make a number of adjustments and arrive at an extended household income. Finally, we measure the distribution in this extended income for all countries in the analysis, before and after the crisis. Our results point to the absence of relative inequality effects of fiscal consolidations in those countries where public sector cuts have been deeper. This fact is due to the emphasis on measuring inequality in relative terms, given that primary incomes have fallen by more than the cuts in public services provided to citizens.

    DOI https://dx.medra.org/10.12842/SPINTAN-WP-07

  • SPINTAN Working Paper No. 6
    The long-run effect of fiscal consolidation on economic growth: evidence from quantitative case studies
    Mischa Kleis, Marc-Daniel Moessinger
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    We contribute to the literature on the long-run effect of fiscal consolidation on economic growth by applying a novel method for quantitative case studies. Relying on a qualitative (narrative) definition of fiscal consolidations based on an examination of historical policy documents and using the synthetic control method (SCM), we investigate the evolution of post-consolidation trajectories of economic growth in six case studies of OECD countries. In contrast to recent studies that reject the hypothesis of non-Keynesian effects, our results do not offer clear-cut evidence on the long-run effect of fiscal consolidation on economic growth. Half of the case studies point to a positive effect with the other half indicating a negative effect on economic growth trajectories. We further do not find a specific effect of the strength of the fiscal adjustment and the type of consolidation, i.e., whether the consolidation is rather based on expenditure cuts or revenue increases.

    DOI https://dx.medra.org/10.12842/SPINTAN-WP-06

  • SPINTAN Working Paper No. 5
    The research output of universities and its determinants: quality, intangible investments, specialisation and inefficiencies
    José Manuel Pastor, Lorenzo Serrano
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    Published in: Scientometrics, 109(2), 1255-1281

    Increasing research output is a fundamental challenge for the well-being of European citizens. The analysis of productivity in Higher Education Institutes (HEIs) at a European level reveals enormous differences in output per researcher across countries. This study develops a 5-step methodology that explicitly considers the quality of scientific output in EU universities and its specialisations to explain and decompose the differences in output per university teacher in terms of a) differences in efficiency within each field of science (FOS), b) differences in FOS specialisation of the HEIs in each country, c) differences in quality, and d) differences in allocation of resources per researcher. The inefficiency levels estimated show that across the EU as a whole there is a substantial margin for increasing research output without having to spend more resources. There are also major differences between countries in terms of inefficiency. The main sources of heterogeneity in scientific output from the HEIs in the EU are the differences in resources allocated per researcher and, to a lesser extent, the differences in efficiency within each knowledge field. In contrast, the differences in quality and in specialisation seem to play a much smaller role in determining differences in output.

    DOI https://dx.medra.org/10.12842/SPINTAN-WP-05

  • SPINTAN Working Paper No. 4
    The effects of survival rates on education in a simple life-cycle model
    Martin Weale
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    This paper explores the decision to invest in education and its link with life expectancy and mortality. It presents evidence for a statistical relationship between life expectancy and participation in education in the European Union, and explores this in a life-cycle model. It is found that conventional estimates of returns to education imply much longer periods of education than are observed in practice. More conventional results can be found if the marginal return to education is assumed to decline with the age at which it is completed. Even then declining mortality accounts only for a small part in the extension of education seen since the early twentieth century. If, as has been suggested by some research, education itself influences mortality, then it is possible to account for over 60% of the increase in years of education as higher productivity and living standards have made life more fully worth living.

    DOI https://dx.medra.org/10.12842/SPINTAN-WP-04

  • SPINTAN Working Paper No. 3
    The assessment of depreciation in the case of intangible assets
    Bernd Görzig, Martin Gornig
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    A multitude of measurement issues are related to quantifying the amount of intangible assets in the public sector. In this paper we focus on the research dealing with the decrease of the value of capital stock and the depreciation of intangibles in the public sector. In the first part we discuss the influence of the assumption of normal wear and tear, obsolescence and average economic life for the calculation of depreciation rates. In particular, we evaluate the potential differences between private and public intangibles. In the second part of the paper we present an empirical case study. Here we take closer look at the team value as part of the intangibles in the field of organisational capital. Based on linked employer-employee data for Germany we analyse the unit specific quit rates that describe the loss of the capital value of a team. The results indicate large differences in the depreciation rates between private and public sector. The depreciation rate of the team value as part of the organisational capital is particularly low in the public administration and human health activities.

    DOI https://dx.medra.org/10.12842/SPINTAN-WP-03

  • SPINTAN Working Paper No. 2
    Public capital. Measurement issues
    Matilde Mas
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    This paper takes two complementary perspectives to review the main issues arising from the measurement of public capital. Firstly, it presents the most relevant statistical issues related to measuring public/non-market investment. Second, it highlights some methodological problems associated with the measurement of the value of capital services, namely, i) the use of a rate of return for public capital; ii) the endogenous vs. exogenous approach and the consistency requirements when the former is used; and iii) the selected user cost expression and its consequences for measurement. Third, it refers explicitly to intangible capital. Finally, the paper also shows the implications for the value of capital services —levels and growth rates— of the different options open for both tangible and intangible public capital.

    DOI https://dx.medra.org/10.12842/SPINTAN-WP-02

  • SPINTAN Working Paper No. 1
    Public intangibles: the public sector and economic growth in the SNA
    Carol Corrado, Jonathan Haskel, Cecilia Jona-Lasinio
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    Accepted for publication in the Review of Income and Wealth

    This paper sets out a framework for the analysis of public investments, tangible and intangible, at the level of detail needed for the economic analysis of impacts of public policies influencing economic growth. To do this, we broaden the concept of capital in the public sector from that which is mostly tangible (e.g. physical infrastructure) to that which also includes intangibles and long-lasting societal assets. We also need to overcome some significant measurement challenges, such as the accounting treatment of returns to public capital and the assignment of public capital and relevant expenditures, including tax expenditures, to industries. All told, for the analysis of public investments, we find that national accounts need to (a) impute a net return to government capital, (b) disaggregate industries by institutional sector of origin, (c) use industry capital compensation measured to include all public payments, and (d) where relevant, build crosswalks for components of government expenditure by function of government to industries.

    DOI https://dx.medra.org/10.12842/SPINTAN-WP-01