Documents CESifo 323 results

"The COVID-19 pandemic has led to a substantial increase in the prevalence of working from home among white-collar occupations. This can have important implications for the future of the workplace and quality of life. We discuss an additional implication, which we label reverse brain drain: the possibility that white-collar migrant workers return to live in their countries of origin while continuing to work for employers in their countries of destination. We estimate the potential size of this reverse flow using data from the European Labor Force Survey. Our estimates suggest that the UK, France, Switzerland and Germany each have around half a million skilled migrants who could perform their jobs from their home countries. Most of them originate from the other EU member states: both old and new. We discuss the potential economic, social and political implications of such reverse brain drain."

"Greening the economy is high on the political agenda. As early as 2015, the Paris Agreement set ambitious targets to combat climate change. Efforts have since become broader and are now aimed at promoting sustainable development in general, as set out in the UN 2030 Agenda for Sustainable Development. The financial sector is expected to play an important role in the upcoming transition towards a more sustainable
economy. Therefore, policy makers in different parts of the world are developing “sustainable finance” programs. The EU Commission has just released a renewed sustainable finance strategy. This issue of CESifo Forum explores why sustainable finance programs may be necessary and takes a closer look at investor and corporate behavior. The authors assess how important the objective of sustainability has been
so far and examine how it affects the decisions of companies and those of their peers. They also propose measures to render the corporate sector more sustainable."

"We conduct a survey experiment with four thousand German respondents and provide information on two measures of gender inequality, separately or jointly: the gender gap in earnings and the gender gap in pensions. We analyze the effect of information provision on respondents' views on the importance of reducing gender inequality and on their agreement with the adoption of policies targeted at different stages of the life cycle and aimed at reducing the gaps. We find that providing information on both gaps changes perceptions of the importance of reducing gender inequality and adopting policy measures to this end. Information on only one gap tends to have insignificant effects. By exploring the mechanisms behind our results, we provide insights into the importance of individual views on female disadvantages in the labor market, personal experience of inequality, and social norms as correlates of preferences for reducing gender inequality and policy interventions. We also show that information provision has larger effects on women and young respondents, while treatment effects do not differ by political leaning. These individual characteristics also relate to differences in identifying causes of gender inequality."

"This paper sets up a two-country model of offshoring with monopolistically competitive product and monopsonistically competitive labour markets. In our model, an incentive for offshoring exists even between symmetric countries, because shifting part of the production abroad reduces local labour demand and allows firms to more strongly execute their monopsonistic labour market power. However, offshoring between symmetric countries has negative welfare effects and therefore calls for policy intervention. In this context, we put forward the role of a common minimum wage and show that the introduction of a moderate minimum wage increases offshoring and reduces welfare. In contrast, a sizable minimum wage reduces offshoring and increases welfare. Beyond that, we also show that a sufficiently high common minimum wage cannot only eliminate offshoring but also inefficiencies in the resource allocation due to monopsonistic labour market distortions in closed economies."

"This paper measures the exposure of industries and occupations to 40 digital technologies that emerged over the past decade and estimates their impact on European employment. Using a novel approach that leverages sentence transformers, we calculate exposure scores based on the semantic similarity between patents and ISCO-08/NACE Rev.2 classifications to construct an open–access database, ‘TechXposure'. By combining our data with a shift–share approach, we instrument the regional exposure to emerging digital technologies to estimate their employment impact across European regions. We find an overall positive effect of emerging digital technologies on employment, with a one-standard-deviation increase in regional exposure leading to a 1.069 percentage point increase in the employment-to-population ratio. However, upon examining the individual effects of these technologies, we find that smart agriculture, the internet of things, industrial and mobile robots, digital advertising, mobile payment, electronic messaging, cloud storage, social network technologies, and machine learning negatively impact regional employment."

"This paper examines the labor market implications of investment in automation over the life cycle of ICT and robot technologies from 1995 to 2017 in 163 European regions. We first identify major technological breakthroughs during this period for these automation technologies and identify the phases of acceleration and deceleration in investment. We then examine how exposure to these automation technologies affects employment and wages across these different phases of their life cycle. We find that the negligible long term impact of automation on employment conceals significant short term positive and negative effects within phases of the technology life cycle. We also find that the negative impact of ICT investment on employment is driven by the phase of the cycle when investment decelerates (and the technology is more mature). The phases of the technology life cycles are more relevant than differences in regions' structural characteristics, such as productivity and sector specialization in explaining the impact of automation on regional employment."

"To gain insights into the mechanisms that shape the interaction between economic growth and climate change, we analyze the simplified DICE through the lens of growth theory. We analytically show that this model exhibits a continuum of saddle-point stable steady states, a property that carries over to a large set of (analytical and numerical) IAMs. This novel insight is important because it implies initial conditions of stock variables, notoriously difficult to calibrate, matter for the ultimate steady state, i.e. for the long-run economic and climate outcomes. However, we also show that a lack of information about the stock of global capital is considerably less consequential than a lack of information about GHG in the atmosphere. These properties have important implications for understanding the consequences of delayed climate policy implementation and the optimal carbon tax. We employ numerical techniques to show how a postponement of optimal climate policy implementation leads to a higher long-run temperature. We also show that the SCC-to-GDP ratio is in fact largely constant, despite transitional dynamics. However, its level depends strongly on the point in time the policy is implemented. Finally, we employ the setup to better understand the consequences of stronger TFP growth for the climate."

"Environmental degradation and economic inequality are two of the defining challenges of the twenty-first century. We synthesize conceptual mechanisms that underpin inequality-environment interlinkages and take stock of the relevant empirical evidence. We propose three channels of interaction, describing, first, how the cost of environmental policy is distributed across households, second, how environmental benefits vary with household income, third, how income inequality and redistribution shape environmental outcomes. The three channels determine how both environmental quality and economic inequality matter for policy appraisal. We argue that it is crucial to consider inequality-environment interlinkages in economic research and policy design, as neither issue can be fully understood in isolation, and close by highlighting future research needs."

"This paper examines the implications of Artificial Intelligence (AI) and automation for the taxation of labor and capital in advanced economies. It synthesizes empirical evidence on worker displacement, productivity, and income inequality, as well as theoretical frameworks for optimal taxation. Implications for tax policy are discussed, focusing on the level of capital taxes and the progressivity of labor taxes. While there may be a need to adjust the level of capital taxes and the structure of labor income taxation, there are potential drawbacks of overly progressive taxation and universal basic income schemes that could undermine work incentives, economic growth, and long-term household welfare. Some of the challenges posed by AI and automation may also be better addressed through regulatory measures rather than tax policy."

"This paper uses administrative employer-employee data to uncover the effects of a large payroll tax reduction for minimum-wage workers in France. Exploiting the change in labor costs both at the job level and at the firm level, I find that the policy spurred an additional 13 percentage points increase in the number of minimum-wage jobs, and that these extra jobs stem exclusively from firms which had previously very few or no minimum-wage workers. On the other hand, firms which already employed workers at minimum-wage levels, and therefore benefit ex ante from a cash windfall, increase employment irrespective of wage levels. These firms grow by an additional 4 percent in the first two years following the reform. This effect is stronger in liquidity-constrained and credit-constrained firms. Overall, these results show that not all firms react to changes in relative labor costs and highlight the importance of alleviating liquidity constraints for firm growth."