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11. Has EMU Had Any Impact on the Degree of Wage Restraint?

Author:
Adam S. Posen and Daniel Popov Gould
Publication Date:
08-2006
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics (PIIE)
Abstract:
This working paper investigates the European Monetary Unification's (EMU) effect on wage restraint—the degree to which wage increases do or do not exceed productivity growth. We find in cross-sectional investigations that wage restraint either is unchanged or has increased following EMU in the vast majority of countries. This finding contradicts the predictions of a widely cited family of models of coordination of labor market bargaining. In particular, one would have expected Germany to display the greatest decline in wage restraint post-EMU under these models, but in our time-series analysis we find no indication of such a decline. The overall shift toward greater wage restraint is consistent with the models that emphasize the gains from monetary credibility. The time-series evidence on Italy, which shows a significant increase in wage restraint after eurozone entry, also supports this view. That said, the increase in wage restraint in the eurozone is matched by that associated with the increase in credibility seen in the United Kingdom and Sweden after their adoption of inflation targeting post-1992.
Topic:
Economics and International Trade and Finance
Political Geography:
United Kingdom, Europe, Germany, and Sweden

12. Economic Survey of Sweden, 2005

Publication Date:
06-2005
Content Type:
Policy Brief
Institution:
The Organisation for Economic Co-operation and Development
Abstract:
The Swedish economy has undergone impressive changes and has delivered a remarkable surge in productivity since the mid-1990s. Consequently, per capita incomes are slowly making up the ground lost in earlier decades. Labour market performance, however, has been less inspiring. Employment rates have yet to recover to their 1990 peaks and hours of work need to increase to support the welfare state.
Topic:
Development, Economics, and Government
Political Geography:
Europe and Sweden

13. Economic Survey of Sweden, 2004

Publication Date:
02-2004
Content Type:
Policy Brief
Institution:
The Organisation for Economic Co-operation and Development
Abstract:
With sound monetary and fiscal frameworks and a good macroeconomic position, Sweden is better placed to face the longer-term challenges of an ageing population than many other OECD countries. As elsewhere, these demographic trends will put downwardpressure on growth in potential output and increase burdens on public expenditure over time. Managing this situation effectively within the welfare state approach while enjoying the highest possible living standards will be easier if the country can raise productivity growth, expand the effective labour supply, and get public finances quickly back onto their intended medium-term path. Productivity growth could be boosted further by increasing the pressures from competition in all parts of the economy, building on earlier liberalisation efforts. Effectively addressing cartels and other anti-competitive behaviour, removing regulatory obstacles and further exposing the large public sector to competition would all help. Productivity growth could also be raised if workers and capital moved more quickly and easily in response to shifts in costs and demand for different outputs. However, taking the rewards for productivity improvements in the form of lower working hours diminishes the tax base; further reductions in high marginal tax rates would reduce the incentive to do so. Although employment rates are already high overall, more could be done to get young people qualified and into the workforce earlier and to improve the integration of immigrants. Reducing the numbers of people drawing sickness and disability benefits will not only boost effective labour supply but also help ease expenditure pressures. More generally, tight expenditure restraint will be necessary to attain the government's surplus target. The budget framework could be refined in ways that would help to ensure that public finances are sustainable in the long term, while also providing room to moderate marginal tax rates in order to boost incentives to work, save and invest. Further progress towards environmental sustainability could focus on improving the cost-effectiveness of policies. Ultimately, creating faster growth and maintaining the welfare state depend on continuation of far-sighted economic management.
Topic:
Agriculture, Economics, Environment, Human Rights, International Organization, and Political Economy
Political Geography:
Sweden

14. A Tale of Two Countries: Poverty among Immigrants in Denmark and Sweden since 1984

Author:
Kræn Blume, Björn Gustafsson, Peder Pedersen, and Mette Verner
Publication Date:
04-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
The paper focuses on the problems of low income among immigrants, analysed by using comparable panel datasets for two Scandinavian welfare states. After a brief survey of a few earlier studies on immigrant poverty, we present Denmark and Sweden as interesting cases for comparative research. Cyclical profiles have been very different since the 1980s and both countries have experienced considerable differences with regard to the number and composition of immigrants from the less developed countries. Poverty rates, analysed relative to different background factors, are fairly high, in particular when considering the welfare state background of Denmark and Sweden. A number of differences are found in spite of the institutional similarities between the two countries.
Topic:
Economics, Migration, Political Economy, and Poverty
Political Geography:
Denmark and Sweden

15. Euro-Focus, After The German Electoral Storm: Mending Bridges, Rebuilding Confidence

Author:
Simon Serfaty and Christina Balis
Publication Date:
09-2002
Content Type:
Policy Brief
Institution:
Center for Strategic and International Studies (CSIS)
Abstract:
This past summer began with predictions of the return of a new conservative government in Germany and the alleged demise of Europe's left. The consecutive victories of leftwing parties in Sweden and Germany this month proved the fallacy of both predictions, while raising serious questions in Europe and the United States about the future course of German policies.
Topic:
Economics and Politics
Political Geography:
United States, Europe, Germany, and Sweden

16. What's Trade Got To Do With It? Relative Demand for Skills within Swedish Manufacturing

Author:
Paul Brenton, Bob Anderton, and Eva Oscarsson
Publication Date:
03-2001
Content Type:
Working Paper
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
This paper seeks to identify the contribution of trade and technological change to the increase in inequality between skilled and unskilled workers in Sweden since the 1970s. An empirical approach is adopted which allows for the outsourcing of the low-skill parts of the production chain within industries to low-wage locations and is applied to detailed industry and trade data, the latter distinguishing between low-wage sources of imports and OECD countries. Another feature of the study is the use of data on patents to capture technological change. The paper finds that, in contrast to previous studies, trade with low-wage countries may have contributed to the rise in inequality in Swedish manufacturing. Here we identify this effect through changes in relative import prices and through changes in import penetration measured in volume terms. Changes in import penetration measured in value terms, which have been used in previous studies, are not found to be significant. In addition imports seem to have had a larger effect on inequality in high-skill intensive sectors rather than the low-skill sectors. The empirical results also suggest that the increased use of technology also played a role in creating greater inequality between skilled and unskilled workers in Sweden with the magnitude of this impact increasing in the 1990s.
Topic:
Economics, International Trade and Finance, and Political Economy
Political Geography:
Europe and Sweden

17. Skill Upgrading and Production Transfer within Swedish Multinationals in the 1990s

Author:
Pär Hansson
Publication Date:
03-2001
Content Type:
Working Paper
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
This paper studies the link between production transfer in Swedish-headquartered multinational enterprises (MNEs) and skill upgrading in Swedish manufacturing in the 1990s. The analysis distinguishes between horizontal and vertical foreign direct investment (FDI). The increased employment share in affiliates in non-OECD countries (vertical FDI) has a non-trivial, significantly positive effect on the share of skilled labour in the Swedish parents. On the other hand, the skill upgrading in the parents is unrelated to employment changes in their affiliates in other OECD countries (horizontal FDI). The latter is consistent with implications of the newly developed horizontal MNE models.
Topic:
Economics, International Trade and Finance, and Political Economy
Political Geography:
Europe and Sweden

18. Global Markets, National Tax Systems, and Domestic Politics: Rebalancing Efficiency and Equity in Open States' Income Taxation

Author:
Steffen Ganghof
Publication Date:
09-2001
Content Type:
Working Paper
Institution:
Max Planck Institute for the Study of Societies
Abstract:
Competitive pressure on some capital income tax rates reinforces a generic "quadrilemma" or a four-way tradeoff in domestic income taxation. To maintain competitiveness, governments have to cut some tax rates on capital income down to "international standards." If these cuts lead to a de-alignment of different rates on capital income, domestic allocation becomes more inefficient, all else being equal. Cutting all tax rates on capital income to a uniform low level, while maintaining high and progressive tax rates on labor incomes, avoids this inefficiency, but sacrifices comprehensive income taxation, that is, joint and equal taxation of capital and labor incomes. Finally, reducing all income tax rates to international standards, including top rates on labor income, implies a strong significant reduction in the progressiveness of labor income taxation (and/or significant revenue losses). As a result, governments that aim at all four goals” competitiveness, allocative efficiency, horizontal equity (comprehensive income taxation) and progressivity – and want to maintain a given revenue level cannot avoid seriously compromising one of them. This paper analyzes how this income tax quadrilemma has played out in seven OECD countries: Australia, Denmark, Finland, Germany, New Zealand, Norway, and Sweden. Combining the results of this matched comparison with exploratory data analysis for all OECD countries, the paper discusses the general implications of the quadrilemma for the domestic political economy of tax competition and the future of "domestic compensation" in open states.
Topic:
Economics, International Trade and Finance, and Political Economy
Political Geography:
Finland, Norway, Denmark, Georgia, Australia, Sweden, and New Zealand

19. Euro Spectator 2000 - Italy

Author:
Silvia Nenci and Marina Mancini
Publication Date:
01-2000
Content Type:
Working Paper
Institution:
Istituto Affari Internazionali
Abstract:
According to the “Eurobarometer” survey (Eurobarometer No 54), conducted in November and December 2000 among more than 16,000 citizens of the European Union, 55% (-3% in comparison with spring 2000) of Europeans support the single currency, whilst 37% do not. The Member States in which support is strongest are Italy (79%), Luxembourg (75%), Belgium (72%), Greece (70%), Ireland (69%), Spain (68%) and the Netherlands (64%). The majority of public opinion is against the Euro in Sweden (26%), the United Kingdom (21%), Denmark (41%) and Finland (45%). Looking at Italy, results show that 79% of citizens are in favour of the Euro (-2% in comparison with previous six months), 17% are against it (+ 3%) and the remaining 4% are indifferent.
Topic:
Economics and International Trade and Finance
Political Geography:
United Kingdom, Europe, Finland, Greece, Belgium, Denmark, Spain, Italy, Sweden, Netherlands, Ireland, and Luxembourg