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1. Exporting out of China or out of Africa? Automation versus Relocation in the Global Clothing Industry

Author:
Tilman Altenburg, Xiao Chen, Wilfried Lütkenhorst, Cornelia Staritz, and Lindsay Whitfield
Publication Date:
01-2020
Content Type:
Special Report
Institution:
German Development Institute (DIE)
Abstract:
The Discussion Paper examines the opportunities that the rising industrial wages in China will bring for Africa. China has been the industrial workbench of the global economy for decades. However, its competitive advantages are waning, particularly for labour-intensive assembly activities in the clothing, shoe, electronics and toy industries. The Chinese government estimates that up to 81 million low-cost industrial jobs are at risk of relocation to other countries - unless China can keep the companies in the country through automation. Against this background, three complementary studies were carried out. The first examines where the automation technology for clothing and footwear production stands today; the second, how clothing companies in China deal with the cost pressure: to what extent they automate, relocate within China or abroad and how great is the interest in Africa as a production location. The third part is devoted to Africa’s competitiveness in clothing assemly, with empirical findings from Ethiopia and Madagascar. The Discussion Paper shows that the manufacture of clothing can already be robotized today, but that for sewing, robotization will probably remain more expensive than manual labor in the next 15-20 years. China’s companies are investing heavily in the automation of all other production processes and at the same time shifting production to neighbouring Asian countries. In Africa, only Ethiopia is currently competitive in the manufacture of clothing, and here too there are significant institutional difficulties in absorbing large amounts of direct investment.
Topic:
Industrial Policy, Labor Issues, Foreign Direct Investment, Exports, and Automation
Political Geography:
Africa, Europe, Germany, Ethiopia, and Madagascar

2. A New Policy Toolkit Is Needed as Countries Exit COVID-19 Lockdowns

Author:
Olivier Blanchard, Thomas Philippon, and Jean Pisani-Ferry
Publication Date:
06-2020
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
The measures that most governments took in response to the sudden collapse in economic activity during the COVID-19 lockdowns nearly exclusively focused on protecting vulnerable workers and firms. These measures included unemployment benefits, grants, transfers, loans at low rates, and tax deferrals. As lockdowns are lifted, governments must shift policies toward supporting the recovery and design measures that will limit the pain of adjustment while preserving productive jobs and firms. This Policy Brief explores how such measures can be designed, with particular emphasis on Europe and the United States. The authors propose a combination of unemployment benefits to help workers, wage subsidies and partially guaranteed loans to help firms, and debt restructuring procedures for small and medium-sized companies handicapped by excessive legacy debt from the crisis.
Topic:
Debt, Economics, Government, Labor Issues, Unemployment, and Coronavirus
Political Geography:
Europe, North America, and United States of America

3. Does Employment Protection Affect Unemployment? A Meta-analysis

Author:
Philipp Heimberger
Publication Date:
02-2020
Content Type:
Working Paper
Institution:
The Vienna Institute for International Economic Studies (WIIW)
Abstract:
Despite extensive research efforts, the magnitude of the effect of employment protection legislation (EPL) on unemployment remains unclear. Existing econometric estimates exhibit substantial variation, and it is therefore difficult to draw valid conclusions. This paper applies meta-analysis and meta-regression methods to a unique data set consisting of 881 observations on the effect of EPL on unemployment from 75 studies. Once we control for publication selection bias, we cannot reject the hypothesis that the average effect of EPL on unemployment is zero. The meta-regression analysis, which investigates sources of heterogeneity in the reported effect sizes, reveals the following main results. First, the choice of the EPL variable matters: estimates that build on survey-based EPL variables report a significantly stronger unemployment-increasing impact of EPL than estimates developed using EPL indices based on the OECD’s methodology, where the latter relies on coding information from legal provisions. Second, we find that employment protection has a small unemployment-increasing effect on female unemployment, compared with a zero impact on total unemployment. Third, using multi-year averages of the underlying data tends to dampen the unemployment effects of EPL. Fourth, product market regulation is found to moderate the effect of EPL on unemployment.
Topic:
Labor Issues, European Union, Employment, Unemployment, and Organisation for Economic Co-operation and Development
Political Geography:
Europe and Global Focus

4. Distributional National Accounts (DINA) for Austria, 2004-2016

Author:
Stefan Jestl and Emanuel List
Publication Date:
02-2020
Content Type:
Working Paper
Institution:
The Vienna Institute for International Economic Studies (WIIW)
Abstract:
This paper constructs distributional national accounts for Austria for the period 2004-2016. We enrich survey data with tabulated tax data and make it fully consistent with national accounts data. The comprehensive dataset allows us to analyse the distribution of macroeconomic growth across the income distribution and to explore the evolution of income inequality in pre-tax income over time. Our results suggest that the distribution of growth has changed over time, which had considerable repercussions on inequality. Inequality started to decline at the very beginning of the economic and financial crisis in 2007, however it has increased again after 2012. We further provide novel insights into the evolution of capital income for top income groups and explore redistribution mechanisms that operated in Austria. Government spending was found to play a key role for redistributive effects across the income distribution. In particular, the transfer system redistributes pre-tax income to a large extent.
Topic:
Migration, Labor Issues, and Economic Inequality
Political Geography:
Europe and Austria

5. Immigration and Offshoring: Two Forces of Globalisation and Their Impact on Employment and the Bargaining Power of Occupational Groups

Author:
Michael Landesmann and Sandra Leitner
Publication Date:
01-2020
Content Type:
Working Paper
Institution:
The Vienna Institute for International Economic Studies (WIIW)
Abstract:
This paper estimates conditional demand models and, using a joint approach for the period 2008-2017, examines the impact of immigration and different measures of offshoring on the labour demand and demand elasticities of native workers in four different types of occupational groups: managers/professionals, clerical workers, craft (skilled) workers and manual workers. The analysis is conducted using data for four EU economies: Austria, Belgium, France and Spain. Our results point to important and occupation-specific direct and indirect effects of immigration and offshoring. Both offshoring – particularly services offshoring – and immigration have negative direct employment effects on all occupations, but native clerks and manual workers are affected the most, and native managers/professionals the least. Generally, offshoring exerts a stronger direct negative employment effect than does immigration. Our results also identify an important (labour demand) elasticity-channel of immigration and offshoring and show that some groups of native workers can also actually gain from globalisation through an improvement in their wage-bargaining position. Overall, our results indicate a deterioration in the bargaining power of native manual workers arising from both immigration and offshoring; an improvement in the bargaining position of native craft workers in the case of both immigration and offshoring; and an improvement in the bargaining position of native clerical workers and managers/professionals in the case of offshoring only. Finally, our analysis of the cross-effects of immigration highlights the important role of migrant managers/professionals for the labour demand and demand elasticities (bargaining power) of native clerical workers, craft and manual workers.
Topic:
Globalization, Labor Issues, Immigration, Employment, and Work Culture
Political Geography:
Europe, France, Belgium, Spain, and Austria

6. Japan and the Visegrad 4: The Unsensational Strategic Partners

Author:
Rudolf Furst
Publication Date:
05-2020
Content Type:
Working Paper
Institution:
Institute of International Relations Prague
Abstract:
The Euro-Japanese rapprochement stimulates the Japanese interest in the new EU member states, which are then matched with Japanese investments and Japan’s global trade strategy. The V4 countries benefit from their geographical position, existing infrastructure and political stability, industrial tradition, and low labour costs, emphasizes Rudolf Fürst.
Topic:
Economics, Bilateral Relations, Labor Issues, European Union, Political stability, and Industry
Political Geography:
Japan, Europe, and Asia

7. Occupational change, artificial intelligence and the geography of EU labour markets

Author:
Sybrand Brekelmans and Georgios Petropoulos
Publication Date:
06-2020
Content Type:
Working Paper
Institution:
Bruegel
Abstract:
From 2002 up to 2009, the economies of European Union countries went through a skill upgrading, rather than a polarisation between low-skill and high-skill jobs. After 2009, this changed, with declining real wages and a significant increase in the share of workers in low-skill jobs. This assessment evaluates these changes in connection with labour market variables, population densities and the emergence of machine learning and artificial intelligence.
Topic:
Labor Issues, European Union, Economy, Innovation, Artificial Intelligence, Strategic Competition, and Geography
Political Geography:
Europe

8. Minimum wage and the EU: Happily ever after?

Author:
Claire Dhéret and Mihai Palimariciuc
Publication Date:
05-2020
Content Type:
Working Paper
Institution:
European Policy Centre
Abstract:
Once deemed a pipe dream, a concrete plan for a European framework on minimum wages might finally be in the cards. The framework will have to be ambitious enough to deliver progress for low-wage workers, but also flexible enough to accommodate the very diverse wage-setting regimes present across the EU. On top of that, the Commission must deal with the opposition to EU interventions in determining wages, and convince sceptics of the economic, social and political benefits of having a European framework. The Commission should, therefore, strive for (i) the creation of an egalitarian wage structure that supports decent living standards; and (ii) building broad political consensus.
Topic:
Labor Issues, Reform, European Union, and Minimum Wage
Political Geography:
Europe

9. Our Europe: 15 Years of Poland in the European Union

Author:
Jerzy Wilkin, Joanna Konieczna-Sałamatin, Mirosława Marody, Maja Sawicka, Paweł Kaczmarczyk, Jan J. Michałek, Andrzej Halesiak, Stanisława Golinowska, Irena Topińska, Anna Fornalczyk, Richard Woodward, Grzegorz Gorzelak, Andrzej Kwieciński, Katarzyna Zawalińska, Przemysław Kowalski, Anna Malinowska, Wiesława Kozek, Magdalena Kąkol, Maciej Nowicki, Grzegorz Wiśniewski, Andrzej Cylwik, Tomasz Komornicki, Urszula Sztanderska, Jacek Liwiński, Dorota Ilczuk, Anna Karpińska, Przemysław Kowalski, Mateusz Szczurek, Stanisław Gomułka, and Paweł Wojciechowski
Publication Date:
02-2020
Content Type:
Special Report
Institution:
Center for Social and Economic Research - CASE
Abstract:
This report is the result of the joint work of a number of experts from various fields who have been - for many years – analysing the multidimensional effects of EU institutions and cooperation with Member States pursuant to European values and mechanisms. The authors summarise the benefits of Poland’s membership in the EU based on facts; however, they do not hide their own views and reflections. They also demonstrate the barriers and challenges to further European integration. This report was prepared by CASE, one of the oldest independent think tanks in Central and Eastern Europe, utilising its nearly 30 years of experience in providing objective analyses and recommendations with respect to socioeconomic topics. It is both an expression of concern about Poland’s future in the EU, as well as the authors’ contribution to the debate on further European integration.
Topic:
Climate Change, Demographics, Energy Policy, Labor Issues, Economic growth, Regional Integration, Social Policy, Fiscal Policy, Innovation, and Trade
Political Geography:
Europe, Eastern Europe, and Poland

10. The European Union: State of play and prospects

Author:
Janusz Lewandowski
Publication Date:
05-2020
Content Type:
Special Report
Institution:
Center for Social and Economic Research - CASE
Abstract:
"Many brilliant prophecies have appeared for the future of the EU and our entire planet. I believe that Europe, in its own style, will draw pragmatic conclusions from the crisis, not revolutionary ones; conclusions that will allow us to continue enjoying a Europe without borders. Brussels will demonstrate its usefulness; it will react ably and flexibly. First of all, contrary to the deceitful statements of members of the Polish government, the EU warned of the threats already in 2021. Secondly, already in mid-March EU assistance programs were ready, i.e. earlier than the PiS government’s “shield” program. The conclusion from the crisis will be a strengthening of all the preventive mechanisms that allow us to recognize threats and react in time of need. Research programs will be more strongly directed toward diagnosing and treating infectious diseases. Europe will gain greater self-sufficiency in the area of medical equipment and drugs, and the EU – greater competencies in the area of the health service, thus far entrusted to the member states. The 2021-27 budget must be reconstructed, to supplement the priority of the Green Deal with economic stimulus programs. In this way structural funds, which have the greatest multiplier effect for investment and the labor market, may return to favor. So once again: an addition, as a conclusion from the crisis, and not a reinvention of the EU," writes Dr. Janusz Lewandowski, the author of the 162nd mBank-CASE seminar Proceeding.
Topic:
Demographics, Labor Issues, European Union, Economic growth, Banks, and Trade
Political Geography:
Europe