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122. Labor Market Slack in the United Kingdom
- Author:
- David G. Blanchflower and David N. F. Bell
- Publication Date:
- 07-2014
- Content Type:
- Working Paper
- Institution:
- Peterson Institute for International Economics (PIIE)
- Abstract:
- This paper examines the amount of slack in the UK labor market and finds the downward adjustments made by the Monetary Policy Committee (MPC) to both unemployment and underemployment invalid. Without evidence to support its assessment of the output gap, the MPC reduces the level of unemployment based on its claim that long-term unemployment does not affect wages. The authors produce evidence to the contrary and present arguments on why the MPC's halving of the level of underemployment in the United Kingdom is inappropriate. Bell and Blanchflower set out arguments on why they believe the level of slack is greater than the MPC calibrates. Consistent with that is the fact that real wages in the United Kingdom continue to fall.
- Topic:
- Economics, Markets, and Labor Issues
- Political Geography:
- United Kingdom and Europe
123. Eritrea: Ending the Exodus?
- Publication Date:
- 08-2014
- Content Type:
- Policy Brief
- Institution:
- International Crisis Group
- Abstract:
- The large emigration of youths is the clearest sign of extreme domestic discontent with Eritrean President Isaias Afwerki's government. Social malaise is pervasive. An ever-growing number of young people have fled over the last decade, frustrated by open-ended national service – initiated in 1995 and expanded during the war with Ethiopia (1998-2000). Yet, this flight has resulted in neither reforms nor a viable movement to create an alternative to the current government. Once outside, the ties that bind émigrés to their birthplace are strong and lead them to give financial support to the very system they escaped, through the 2 per cent tax many pay the state as well as remittances sent home to family members.
- Topic:
- Economics, Labor Issues, Immigration, Youth Culture, and Governance
- Political Geography:
- Africa and Europe
124. Future scenarios for the development of the European labour force
- Author:
- Anna Ruzik-Sierdzińska
- Publication Date:
- 02-2014
- Content Type:
- Policy Brief
- Institution:
- Center for Social and Economic Research - CASE
- Abstract:
- The future size and quality of the European labour force are important production factors for future economic growth in the region. The performance of many systems such as social security and health depends on the population of future potential tax payers. Older workers are an important and increasing share of the employment in Europe. Due to lower fertility and longer life expectancy, today, a larger than ever share of the population is over 50. Eurostat projections show that the share of people between the ages of 50 and 74 in the population aged 20-74 will increase in the EU27 countries from the current 40 per cent to 47 per cent in 2050. However, countries differ in terms of elderly activity. Existing studies show that this is related to various factors, including labour market institutions. As demographic ageing is expected to continue in the future, it is important to know more about these factors in order to recommend policies that could be efficient for the development of future labour markets and the economy as a whole. The aim of the described part of the project was to assess the impact of ageing on the labour market, especially on the structure of the labour force and labour productivity. We looked at this from various angles. First, we examined it via the determinants of the transition from work to retirement (see: Riedel and Hofer, 2013) with a broader analysis of non-labour market activities at older ages (Styczyńska et al., 2013). Then, we tried to answer the question about how individual productivity changes with age in different countries and if lifelong learning can contribute to higher labour productivity in the future (Ruzik-Sierdzińska et al., 2013). Finally, we looked at the demand for labour in the perspective of ageing societies, i.e. at employers' policies, attitudes and behaviours towards older workers and retirement (van Dalen et al., 2013).
- Topic:
- Demographics, Markets, Labor Issues, Social Policy, Public Policy, and Aging
- Political Geography:
- Europe, Central Asia, Caucasus, Eastern Europe, and European Union
125. After the Crash: A Perspective on Multilevel European Democracy
- Author:
- Fritz W. Scharpf
- Publication Date:
- 12-2014
- Content Type:
- Working Paper
- Institution:
- Max Planck Institute for the Study of Societies
- Abstract:
- At the end of the postwar period, the politically shaped configurations of normatively integrated European political economies differed greatly among “social-market” and “liberal market economies.” Such differences persist even though the characteristic achievements of social market economies have since eroded under the pressures of global capitalism and of European integration. Focusing on European integration from a social-market perspective, there is no question that it has widened the range of individual options. But it has also reduced the capacity of democratic politics to deal with the challenges of global capitalism, and it has contributed to rising social inequality and the erosion of public services and transfers. This paper will first summarize those asymmetries of European integration which have done the most to constrain democratic choices and to shift the balance between capital, labor, and the state by establishing an institutional priority of negative over positive integration and of monetary integration over political and social integration. It will then explain why efforts to democratize European politics will not be able to overcome these institutional asymmetries and why politically feasible reforms will not be able to remove the institutional constraints. The changes that would be required to restore democratic capacities to shape the political economy could only have a chance if present veto positions were to be fundamentally shaken. On the speculative assumption that the aftermath of a deep crisis might indeed create the window of opportunity for a political re-foundation of European integration, the concluding section will outline institutional ground rules that would facilitate democratic political action at both the European and national levels.
- Topic:
- Economics, Markets, Politics, Labor Issues, Democracy, and Capitalism
- Political Geography:
- Europe
126. Challenging Varieties of Capitalism's Account of Business Interests: The New Social Market Initiative and German Employers' Quest for Liberalization, 2000–2014
- Author:
- Daniel Kinderman
- Publication Date:
- 11-2014
- Content Type:
- Working Paper
- Institution:
- Max Planck Institute for the Study of Societies
- Abstract:
- Do employers in coordinated market economies (CME’s) actively defend the non-liberal, market-constraining institutions upon which their strategic coordination and competitive success depends? This paper revisits the debate over firms’ employer preferences with an in-depth examination of employers in Germany – a paradigmatic CME and crucial “test case” for Varieties of Capitalism. It is based on interviews with key officials and an in-depth examination of a large-scale campaign – the New Social Market Initiative or INMS – founded and funded by German metalworking employers to shape public opinion. The paper argues that German employers have a strong preference for liberalization: they have pushed hard for the liberalization of labor markets, the reduction of government expenditures, the expansion of market-oriented freedoms, and cuts to social protection, employment protection and benefit entitlements. I find no empirical support for the claim that the INSM is an attempt to appease discontented firms within employers’ associations. On the contrary: for many employers, the Agenda 2010 reforms did not go far enough. Following the discrediting of the Anglo-American model in the financial crisis, far-reaching concessions by employees, and the unexpected revitalization of the German economy, employers have moderated their demands – but liberalization remains their default preference. This paper also addresses the role of ideas and the conditions under which employer campaigns can influence policy.
- Topic:
- Economics, Markets, Labor Issues, and Capitalism
- Political Geography:
- Europe and Germany
127. When do adults learn? A cohort analysis of adult education in Europe
- Author:
- Anna-Elisabeth Thum, Miroslav Beblavý, and Galina Potjagailo
- Publication Date:
- 05-2013
- Content Type:
- Working Paper
- Institution:
- Centre for European Policy Studies (CEPS)
- Abstract:
- Adult learning is seen as a key factor for enhancing employment, innovation and growth, and it should concern all age cohorts. The aim of this paper is to understand the points in the life cycle at which adult learning takes place and whether it leads to reaching a medium or high level of educational attainment. To this end we perform a synthetic panel analysis of adult learning for cohorts aged 25 to 64 in 27 European countries using the European Labour Force Survey. We find, as previous results suggest, that a rise in educational attainment as well as participation in education and training happens mostly at the age range of 25-29. However, investment across the life cycle by cohorts older than 25 still occurs: in most countries in our sample, participation in education and training as well as educational attainment increases observably across all cohorts. We also find that the decline with age slows down or is even reversed for older cohorts, for both participation in education and educational attainment. Finally, we can identify a Nordic model in which adult learning is achieved through participation in education and training, a Central European model in which adult learning occurs in the form of increasing educational attainment and a liberal model in which both approaches to adult learning are observable.
- Topic:
- Economics, Education, Markets, and Labor Issues
- Political Geography:
- Europe
128. Role of Apprenticeships in Combating Youth Unemployment in Europe and the United States
- Author:
- Natalia Aivazova
- Publication Date:
- 08-2013
- Content Type:
- Policy Brief
- Institution:
- Peterson Institute for International Economics (PIIE)
- Abstract:
- Five years since the global economic crisis began in 2008, many of the world's advanced economies are still struggling with sluggish growth and high levels of joblessness, especially among younger workers. In June 2013 the European Council expressed concern that “youth unemployment has reached unprecedented levels in several Member States” and called for “urgent action.” Much of the debate in Europe and the United States has focused on fiscal and monetary measures; while macroeconomic policy can address cyclical problems, a wide consensus recognizes the need to address structural challenges. One such challenge is a mismatch between the skills demanded by employers and those available among the population, especially younger workers. This mismatch can be addressed in part through the implementation of apprenticeship programs. The European Council recently concluded that “high quality apprenticeships and work-based learning will be promoted, notably through the European Alliance for Apprenticeships.” However, in the United States, where many are struggling to find jobs after graduating, apprenticeship programs hardly draw government and private-sector resources. Boosting apprenticeships could give both European and US workers the much-needed skills and competitive edge.
- Topic:
- Economics, Markets, Labor Issues, and Youth Culture
- Political Geography:
- United States and Europe
129. How to Measure Underemployment?
- Author:
- David G. Blanchflower and David N. F. Bell
- Publication Date:
- 08-2013
- Content Type:
- Working Paper
- Institution:
- Peterson Institute for International Economics (PIIE)
- Abstract:
- One of the factors that may inhibit reductions in unemployment as the economy recovers is the extent to which existing workers would like to work more hours and employers may prefer to let them work longer hours before making new hires. This phenomenon suggests that the unemployment rate does not capture the full extent of excess capacity in the labor market. But how should it be measured? In this paper we argue that the United States does not have the necessary statistical tools to calibrate this form of underemployment. We describe an index that captures the joint effects of unemployment and underemployment and provides a more complete picture of labor market excess capacity. We show how this index can be implemented using British data and describe its evolution over the Great Recession. Comparisons of our index with unemployment rates suggest that unemployment rates understate differences in labor market excess capacity by age group and overstate differences by gender. We also show that being unable to work the hours that one desires has a negative effect on well-being. Finally, we recommend that the Current Population Survey conducted by the US Bureau of Labor Statistics might be extended to enable the construction of an equivalent US index.
- Topic:
- Economics, International Trade and Finance, Markets, and Labor Issues
- Political Geography:
- United States and Europe
130. Money for Structural Reforms in the Eurozone:making sense of contractual Arrangements
- Author:
- Xavier Vanden Bosch
- Publication Date:
- 05-2013
- Content Type:
- Working Paper
- Institution:
- EGMONT - The Royal Institute for International Relations
- Abstract:
- Both the Commission's proposal for a 'Competitiveness and Convergence Instrument' and the 'contractual arrangement' presented by President Van Rompuy share a common concept: associating EU money with national structural reforms under a binding arrangement.
- Topic:
- Economics, Markets, Regional Cooperation, Labor Issues, Monetary Policy, and Reform
- Political Geography:
- Europe