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1. Refugees and Return: Resolving Ukraine's Human Capital Crisis

Author:
Markus Ziener and Dariia Mykhailyshyna
Publication Date:
05-2024
Content Type:
Working Paper
Institution:
German Marshall Fund of the United States (GMFUS)
Abstract:
Ukraine is facing a human capital crisis of enormous proportions. Here, Dariia Mykhailyshyna of the Center for Economic Strategy in Kyiv presents the findings of three waves of surveys among Ukrainian refugees about their intentions to return to Ukraine or remain in their host countries. The report contains some recommendations for encouraging Ukrainians to return. Millions of its citizens fled the country after Russia launched its full-scale invasion in February 2022. To share best practices and generate possible solutions, the German Marshall Fund of the United States (GMF), along with its partners—the German Federal Ministry for Economic Cooperation and Development and the German Society for International Cooperation (GIZ), hosted a conference titled “Toward a Skilled Workforce: Rebuilding Ukraine’s Human Capital” in Berlin on April 25–26, 2024. To set the stage, Dariia Mykhailyshyna of the Center for Economic Strategy in Kyiv presented the findings of three waves of surveys among Ukrainian refugees. Those findings, as well as some recommendations, are detailed in this report.
Topic:
Reconstruction, European Union, Refugees, and Human Capital
Political Geography:
Europe and Ukraine

2. Artificial Intelligence and the Clustering of Human Capital: The Risks for Europe

Author:
Erik van der Marel
Publication Date:
12-2023
Content Type:
Working Paper
Institution:
European Centre for International Political Economy (ECIPE)
Abstract:
Europe trails the global frontier of productivity growth and the region’s trend is sluggish. Much prospective economic growth for Europe is likely to come from AI and its adoption by European firms which is projected to shoot up the productivity trend. For such AI-generated growth to work, high levels of human capital need to be available for firms, in particular Science, Technology, Engineering, and Mathematics (STEM) graduates. However, much of this human capital for AI is leaving Europe and the region experiences a net outflow when it comes to the skills required to make AI work. Moreover, the spread of both human capital and AI is very uneven within Europe, with some in the West spearheading whilst others in the East are trailing. This paper shows that those regions in Europe that successfully have invested in human capital in the past explain more than one-third of AI adoption by their firms a decade later. Furthermore, this persistent trend is driven by the most human capital-intense firms as they explain more than 50 percent of the observed adoption of AI across Europe. The clustering of human capital is very persistent over time and those that lag in human capital now will weigh down Europe’s ability in generating AI-related growth in the future. This will likely have long-lasting effects for Europe as a whole, defining its capacity to catch up to the global frontier or amplifying the region’s slow-moving growth and productivity trend. Policy makers who are serious about creating growth in the future on the back of AI should therefore invest in human capital now, or else Europe will further fall behind.
Topic:
European Union, Economic Growth, Human Capital, and Artificial Intelligence
Political Geography:
Europe

3. Interrelationships between Human Capital, Migration and Labour Markets in the Western Balkans: An Econometric Investigation

Author:
Michael Landesmann and Isilda Mara
Publication Date:
05-2021
Content Type:
Working Paper
Institution:
The Vienna Institute for International Economic Studies (WIIW)
Abstract:
The South-North migration corridor, i.e. migration flows to the EU from Africa, the Middle East and EU neighbouring countries in the East, have overtaken the East-West migration corridor, i.e. migration flows from Central and East European countries to the EU15 and the European Free Trade Association (EFTA). This is likely to dominate migration flows into the EU+EFTA over the coming decades. This paper applies a gravity modelling approach to analyse patterns and drivers of the South-North migration corridor over the period 1995-2020 and explores bilateral mobility patterns from 75 sending countries in Africa, the Middle East and other EU neighbours to the EU28 and EFTA countries. The study finds that income gaps, diverging demographic trends, institutional and governance features and persisting political instability, but also higher climate risks in the neighbouring regions of the EU, are fuelling migration flows along the South-North corridor and will most likely continue to do so.
Topic:
Economics, International Political Economy, Migration, Labor Issues, European Union, Human Capital, and Labor Market
Political Geography:
Europe

4. What is Wrong with the German Economy? The Case for Openness to Technology and Human Capital

Author:
Philipp Lamprecht
Publication Date:
04-2021
Content Type:
Policy Brief
Institution:
European Centre for International Political Economy (ECIPE)
Abstract:
Advanced economies like Germany need to focus more on attracting foreign high-skilled labour and become better at importing foreign technology and business models. This might not sit well with current thinking of economic sovereignty in Berlin, but it is a necessary step for improving technology-penetration, competitiveness and productivity. Supply of high-skilled labour is getting more difficult to obtain and the cost of generating and adopting new ideas is increasing. Policymakers need to create the right conditions to open their markets to foreign technology and high-skilled labour. But openness alone is only a necessary condition – not a sufficient one. Policymakers also need to focus on creating the right environment domestically to attract a specialised and highly-skilled labour force, despite fierce competition from around the globe. The crucial question is to what extent companies make use of innovation capacities that can be obtained from international recruitment. Our analysis focuses on what German policymakers can do to increase openness for, and its attractiveness to, the high-skilled labour. Germany’s policy framework should focus on public policy initiatives aimed at increasing the incentives and removing obstacles for firms to attract the global high-skilled labour force. To stay attractive, Germany’s policies should also target issues of bottleneck regulation to facilitate field-testing new technologies and to support innovation sandbox processes of companies. And German policies should focus on the regulatory environment, notably the type of regulations that policymakers pursue. Many current regulations in Germany do not sufficiently allow for experimentation of technologies and ideas.
Topic:
International Political Economy, Science and Technology, Labor Issues, Regulation, Human Capital, Innovation, and Skilled Labor
Political Geography:
Europe and Germany

5. Incentivising Investment in Human Capital through the European Fund for Sustainable Development

Author:
Mikaela Gavas and Samuel Pleeck
Publication Date:
05-2021
Content Type:
Working Paper
Institution:
Center for Global Development (CGD)
Abstract:
As the EU prepares to significantly scale up its deployment of blended finance, guarantees, and other risk-sharing tools aimed at stimulating investment in developing countries, and, in the face of spiralling needs as a result of COVID-19, this paper analyses how the EU could use its development budget to incentivise private investment in human capital. The paper provides three contributions. First, it gives an overview of the allocation of the EU’s external investment to date. Second, based on interviews with stakeholders, it documents cases of private investment in health and education while exploring some of the barriers to a higher share of investment in these sectors by the EU and its development finance partners. Finally, it puts forward a set of proposals for how to steer greater European external investment through the European Fund for Sustainable Development Plus (EFSD+) toward human capital.
Topic:
Development, Regional Cooperation, European Union, Investment, Human Capital, and Sustainability
Political Geography:
Europe

6. A Generation of Italian Economists

Author:
Enrico Nano, Ugo Panizza, and Martina Viarengo
Publication Date:
05-2021
Content Type:
Working Paper
Institution:
The John F. Kennedy School of Government at Harvard University
Abstract:
We examine the role of financial aid in shaping the formation of human capital in economics. Specifically, we study the impact of a large merit-based scholarship for graduate studies in affecting individuals’ occupational choices, career trajectories, and labor market outcomes of a generation of Italian economists with special focus on gender gaps and the role of social mobility. We construct a unique dataset that combines archival sources and includes microdata for the universe of applicants to the scholarship program and follow these individuals over their professional life. Our unique sample that focuses on the high end of the talent and ability distribution also allows us to analyze the characteristics of top graduates, a group which tends to be under-sampled in most surveys. We discuss five main results. First, women are less likely to be shortlisted for a scholarship as they tend to receive lower scores in the most subjective criteria used in the initial screening of candidates. Second, scholarship winners are much more likely to choose a research career and this effect is larger for women. Third, women who work in Italian universities tend to have less citations than men who work in Italy. However, the citation gender gap is smaller for candidates who received a scholarship. Fourth, women take longer to be promoted to the rank of full professor, even after controlling for academic productivity. Fifth, it is easier to become a high achiever for individuals from households with a lower socio-economic status if they reside in high social mobility provinces. However, high-achievers from lower socio-economic status households face an up-hill battle even in high social mobility provinces.
Topic:
Economics, Education, Gender Issues, Human Capital, Career, and Financial Aid
Political Geography:
Europe and Italy

7. Enhancing Mediterranean Integration

Author:
Blanca Moreno-Dodson
Publication Date:
06-2020
Content Type:
Journal Article
Journal:
Cairo Review of Global Affairs
Institution:
School of Global Affairs and Public Policy, American University in Cairo
Abstract:
Trade liberalization, human capital development, and sectoral reforms can bring Mediterranean countries closer together.
Topic:
Development, Globalization, International Trade and Finance, Reform, Human Capital, and Liberalization
Political Geography:
Africa, Europe, Middle East, and Mediterranean

8. The Workforce of Pioneer Plants

Author:
Ricardo Hausmann and Frank Neffke
Publication Date:
01-2016
Content Type:
Working Paper
Institution:
The John F. Kennedy School of Government at Harvard University
Abstract:
Is labor mobility important in technological diffusion? We address this question by asking how plants assemble their workforce if they are industry pioneers in a location. By definition, these plants cannot hire local workers with industry experience. Using German social-security data, we find that such plants recruit workers from related industries from more distant regions and local workers from less-related industries. We also show that pioneers leverage a low-cost advantage in unskilled labor to compete with plants that are located in areas where the industry is more prevalent. Finally, whereas research on German reunification has often focused on the effects of east-west migration, we show that the opposite migration facilitated the industrial diversification of eastern Germany by giving access to experienced workers from western Germany.
Topic:
Science and Technology, Labor Issues, Labor Policies, Human Capital, Diversification, and Mobility
Political Geography:
Europe, Germany, and European Union

9. Age and Productivity. Human Capital Accumulation and Depreciation

Author:
Anna Ruzik-Sierdzińska, Claudia Villosio, Maciej Lis, Michele Belloni, and Monika Potoczna
Publication Date:
11-2013
Content Type:
Special Report
Institution:
Center for Social and Economic Research - CASE
Abstract:
This report, titled "Age and Productivity. Human Capital Accumulation and Depreciation", was released within a project NEUJOBS- “The Impact of Service Sector Innovation and Internationalisation on Growth and Productivity”, funded by the European Commission, Research Directorate General as part of the 7th Framework Programme. The report focuses on links between age, productivity and lifelong learning. Various data sources (EU-SILC, LFS, Structure of Earnings Survey, SHARE, ELSA, SHARELIFE) and methodological approaches were used in this report. The analysis identifies clusters of countries with common characteristics of age-earnings profiles (for certain groups of employees) and allows for an explanation of those differences. Some differences can be attributed to the share of sectors, education types, and occupations in country-specific employment. Others are due to labour market institutions and the (dis)incentives to work at older ages provided by social security systems. Additionally, the dynamics of earnings after age 50 differ less between educational and occupational groups than at earlier ages. The authors show that the dynamics of average wages are strongly influenced by the timing of entering and leaving labour market. An estimation of the impact of LLL on productivity (measuredby earnings) at older ages shows that for employees aged 50+, participation in training increases wages in the short-term.
Topic:
Demographics, Economics, Human Capital, Aging, Labor Market, and Capital
Political Geography:
Europe