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31. The Heterogenous Effects of Employers’ Concentration on Wages: Better Sorting or Uneven Rent Extracting?

Author:
Axelle Arquie and Julia Bertin
Publication Date:
10-2022
Content Type:
Working Paper
Institution:
Centre d'Etudes Prospectives et d'Informations Internationales (CEPII)
Abstract:
We show empirically for France that labor market concentration decreases wages heterogeneously, with the lowest earners being the most vulnerable, and increases local wage inequality within occupations. If concentration allows employers to improve worker selection, both inequality and efficiency gains could materialize. However, based on a simple formalization, we interpret the findings that employer concentration increases within-firm inequality and decreases between-firm inequality as evidence against such a sorting mechanism. We also find evidence that employer concentration does not increase positive assortative matching. The results therefore suggest that concentration increases inequality through the relatively reduced bargaining position of the lowest earners.
Topic:
Labor Issues, Inequality, Labor Market, and Wages
Political Geography:
Europe and France

32. Industrial Robots, and Information and Communication Technology: The Employment Effects in EU Labour Markets

Author:
Stefan Jestl
Publication Date:
06-2022
Content Type:
Working Paper
Institution:
The Vienna Institute for International Economic Studies (WIIW)
Abstract:
This paper explores the effects of industrial robots and information and communication technology (ICT) on regional employment in EU countries. The empirical analysis relies on a harmonised comprehensive regional dataset, which combines business statistics and national and regional accounts data. This rich dataset enables us to provide detailed insights into the employment effects of automation and computerisation in EU regions for the period 2001-2016. The results suggest relatively weak effects on regional total employment dynamics. However, employment effects differ between manufacturing and non-manufacturing industries. Industrial robots show negative employment effects in local manufacturing industries, but positive employment effects in local non-manufacturing industries. While the negative effect is concentrated in particular local manufacturing industries, the positive effect operates in local service industries. IT investments show positive employment effects only in local manufacturing industries, while CT investments are shown to be irrelevant for employment dynamics. In contrast, software and database investments have had a predominantly negative impact on local employment in both local manufacturing and non-manufacturing industries.
Topic:
Labor Issues, European Union, Employment, Industry, Robotics, and Labor Market
Political Geography:
Europe

33. German Economy Winter 2022: Inching through the energy crisis

Author:
Jens Boysen-Hogrefe, Dominik Groll, Nils Sonnenberg, Nils Jannsen, Stefan Kooths, Vincent Stamer, and Timo Hoffmann
Publication Date:
12-2022
Content Type:
Working Paper
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
Wholesale prices for gas and electricity have fallen significantly in recent months - even though they are still at a high level. In addition, the burdens on private households and companies caused by high energy costs are to be cushioned by so-called price brakes. Overall, inflation in 2023 will be much lower at 5.4 percent than we had expected in our autumn forecast (8.7 percent). Although real disposable income and, as a result, private consumption are likely to decrease next year, the decline will be much smaller than had been expected a few months ago. As a result, we now expect a slight increase in GDP of 0.3 percent for 2023 (autumn: -0.7 percent). In 2024, GDP is expected to grow somewhat more strongly again at 1.3 percent (autumn: 1.7 percent). The labour market is robust despite the economic slowdown, partly because companies are still desperately seeking skilled workers. The public fiscal balance is likely to deteriorate significantly in 2023 due to the aid packages in response to the energy crisis and displays a deficit of around 4 percent relative to GDP. With the expiry of the aid packages, the deficit will decrease again in 2024.
Topic:
Economics, Monetary Policy, Budget, Business, Labor Market, Energy Crisis, Emerging Economies, and Advanced Economies
Political Geography:
Europe and Germany

34. 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

35. Labor Market Impact of Immigration in the European Union

Author:
Dong-Hee Joe
Publication Date:
04-2021
Content Type:
Policy Brief
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
Immigration is one of the factors often considered as the causes of Brexit. Researchers find evidences that regions with more immigrants from the new member states of the European Union (EU hereinafter) in eastern Europe tended to vote more in favor of Brexit in the 2016 referendum. Similar relations between the size of immigrant population and anti-immigration attitudes or far-right voting are found in other richer EU member states. A common explanation for this relation is the concern that immigrants negatively affect the outcome in the host labor market. Immigration is drawing attention in Korea too. Although immigrants' share in population is still substantially smaller in Korea than in the EU, its increase is noticeable. Also, certain industries in Korea are known to be already heavily reliant on immigrant labor. Recently, as entry into the country was tightened due to the COVID-19 pandemic, firms and farms are reported to have faced a disruption in production. This trend of increasing presence of immigrants in population and in the labor market, vis-à-vis the low fertility rate and rapid aging in Korea, is raising interest and concern on the socioeconomic impact of immigration. To offer some reference for the debates related to immigration in Korea, KIEP researchers (Joe et al. 2020 and Joe and Moon 2021) look at the EU, where immigrants' presence was much higher from much earlier on, and where the greater heterogeneity among the immigrants allows for richer analyses. This World Economy Brief presents some of their findings that are salient for Korea.
Topic:
Immigration, European Union, Brexit, and Labor Market
Political Geography:
Britain, Europe, Asia, and Korea

36. Nudging for Recovery: Behavioral Economics and the implementation of the National Recovery and Resilience Plan

Author:
Demosthenes Kollias
Publication Date:
10-2021
Content Type:
Working Paper
Institution:
Hellenic Foundation for European and Foreign Policy (ELIAMEP)
Abstract:
With the National Recovery and Resilience Plan, Greece is presented with yet another opportunity to catch up with global trends. At the same time, behavioral economics are being established worldwide as a valuable asset in the policy maker’s toolkit. The paper -mainly focusing on taxation, labor market policy, and climate change- aims to examine the behavioral conundrum that creates frictions and inefficiency in the domains outlined above and to offer concrete and quantifiable policy proposals, in accordance with the goals of Greece 2.0. Regarding tax evasion, for example, one can estimate at least €1 billion in additional tax revenue if the proposals are implemented.
Topic:
Climate Change, Economics, Tax Systems, Labor Market, and Economic Recovery
Political Geography:
Europe and Greece

37. Skills mismatch in the Greek labour market: insights from a youth survey

Author:
Dimitris Katsikas
Publication Date:
09-2021
Content Type:
Working Paper
Institution:
Hellenic Foundation for European and Foreign Policy (ELIAMEP)
Abstract:
This policy paper presents some first findings from a youth survey relating to the skills mismatch in Greece. The survey was conducted in the context of the EEA Grants sponsored research project “Youth employment and gender equality: Mobilizing human capital for sustainable growth in Greece”, which is implemented by ELIAMEP and the Norwegian institute Fafo. The project seeks to document and analyze conditions in the Greek labour market, with an emphasis on the main barriers constraining young people’s access to it and on their progress once they get a job. Pending a more in-depth analysis of the findings, the preliminary evidence presented here adds some insights to the study of the skills mismatch phenomenon in Greece and helps us outline a few policy proposals. Skills mismatch is a significant problem for modern economies, as it leads to the inefficient utilization of the labour force, reducing productivity and growth potential. Research shows that Greece faces a serious skills mismatch problem. The findings of a youth survey presented here: Confirm the problem for the Greek labour market in both its vertical (over/ underqualification) and horizontal (field of study) dimensions. Show that skills mismatch affects graduates within every level and orientation (e.g., vocational training) of the educational system. Document young people’s belief that the educational system does not prepare them well for the labour market Show that skills mismatch is a serious obstacle to labour market entry for young people Confirm the lack of learning opportunities for those in employment, as well as the importance which young people attach to such opportunities for their professional progress. Reveal that young people often reject jobs due to low pay and unsatisfactory employment conditions, implying that reported skills shortages are also due to the terms of employment on offer. Policy responses should be multi-faceted, targeting both the educational system and the economy. Providing students with information about market developments and trends, and taking such information into account in the design of educational curricula (particularly in vocational training) is essential if the skills mismatch problem is to be addressed.
Topic:
Youth, Survey, Labor Market, and Skills
Political Geography:
Europe and Greece

38. Protecting employment in 2021 and beyond: what can the new SURE instrument do?

Author:
Christina Kattami
Publication Date:
01-2021
Content Type:
Working Paper
Institution:
Hellenic Foundation for European and Foreign Policy (ELIAMEP)
Abstract:
Protecting employment was not just a 2020 issue – while 2021 will be racing for vaccinations, and the immediate and complete relaxation of the containment measures will remain unlikely, the need to protect incomes and jobs will be as relevant as ever. As such, this policy brief analyses the rationale for, and the integration qualities of, the SURE instrument, which is being implemented following a European Commission proposal in April 2020 and a Council decision on 19 May 2020. By establishing the importance of short-time work schemes in protecting employment during the crucial first months of the pandemic, the brief explains the solidarity function of the SURE instrument, which ensures that all Member States have the resources available to make use of similar schemes to protect jobs, workers and incomes. Additionally, the decision to fund the SURE instrument with social bonds, which have been met with consistently overwhelming investor demand, forms an initial treasury form of what can be regarded as a European safe asset; something which will be strengthened in size and scope by the incoming European bonds funding the Recovery Instrument, Next Generation EU. Moving beyond 2021 and looking into a future model of employment protection in the future of the European labour market, the brief outlines the legal and political feasibility of transforming SURE into a permanent employment scheme, and, as such, an instrument of integration and socioeconomic resilience in the European Union.
Topic:
European Union, Employment, COVID-19, and Labor Market
Political Geography:
Europe

39. Taking the Long View: Options for Inclusive Post-Pandemic Labor Markets

Author:
Liam Patuzzi
Publication Date:
08-2021
Content Type:
Special Report
Institution:
Migration Policy Institute (MPI)
Abstract:
The COVID-19 pandemic has ushered in harsh effects across European economies, and uncertainty persists even as vaccination campaigns have picked up speed. EU governments’ prompt investments in historically large job retention measures have temporarily cushioned the pandemic’s blow to labor markets, but this also means that the full impact is yet to be felt. What is clear, however, is that the crisis has exacerbated the labor market challenges some immigrant groups, such as recently arrived refugees and migrant women, were facing even before the pandemic began. Among the contributing factors are immigrants’ overrepresentation in hard-hit sectors, precarious work arrangements (such as part-time contracts and gig work), difficulties accessing social benefits, and some countries’ temporary suspension of integration supports. This MPI Europe report explores how the pandemic has affected immigrant workers thus far and how labor market trends such as automation, remote work, and the growth of the platform economy may affect migrant integration as European economies begin to recover. It also presents policy ideas and recommendations for crafting inclusive pandemic recovery strategies.
Topic:
Education, Employment, Refugees, Economy, Immigrants, COVID-19, and Labor Market
Political Geography:
Europe

40. The Great Separation: Top Earner Segregation at Work in High-Income Countries

Author:
Olivier Godechot, Paula Apascaritei, István Boza, Lasse Folke Henriksen, and Are Skeie Hermansen
Publication Date:
06-2020
Content Type:
Research Paper
Institution:
Max Planck Sciences Po Center on Coping with Instability in Market Societies (MaxPo)
Abstract:
Analyzing linked employer-employee panel administrative databases, we study the evolving isolation of higher earners from other employees in eleven countries: Canada, Czechia, Denmark, France, Germany, Hungary, Japan, Norway, Spain, South Korea, and Sweden. We find in almost all countries a growing workplace isolation of top earners and dramatically declining exposure of top earners to bottom earners. We compare these trends to segregation based on occupational class, education, age, gender, and nativity, finding that the rise in top earner isolation is much more dramatic and general across countries. We find that residential segregation is also growing, although more slowly than segregation at work, with top earners and bottom earners increasingly living in different distinct municipalities. While work and residential segregation are correlated, statistical modeling suggests that the primary causal effect is from work to residential segregation. These findings open up a future research program on the causes and consequences of top earner segregation.
Topic:
Economics, Political Economy, Labor Issues, Income Inequality, Class, and Labor Market
Political Geography:
Europe