Documents Stehrer, Robert 14 results

"This paper provides an account of the future evolution of two labour market indicators – the employment rate and the unemployment rate – based on forecast growth of GDP and the working-age population, as well as trends related to sectoral productivity growth and participation rates. Given the resulting scenarios, the EU and its Member States generally face increasing employment rates and decreasing unemployment rates, thus continuing the general trend observable in recent years. The results also show, however, that the demographic pressures manifested in a decline in the working age population in many countries may imply unsustainable development leading to severe labour shortages in some countries, as indicated by very low unemployment rates at already high participation rates among their working age populations. As a result of severe macroeconomic labour shortages, some countries could face either lower growth, a strong need for higher productivity growth, or more inward migration. As already mentioned, in these countries, industries with higher than expected labour demand growth (mostly service industries) will suffer relatively more from the shortages. Thus, the results reported here suggest that, given looming demographic pressures, most EU economies may face severe challenges in both the medium and longer terms with regard to growth and welfare."

"Increasing fragmentation of production across borders is changing the nature of international competition. As a result, conventional indicators of competitiveness based on gross exports become less informative and new measures are needed. In this paper we propose a new concept based on the value added that countries contribute to the production of final manufacturing goods, called ‘global value chain (GVC) income'. We develop an ex-post accounting framework to measure this and provide trends for European countries based on a recent multi-sector input–output model of the world economy. We find that gross exports overestimate the competitiveness of economies that rely heavily on imported intermediates, and this bias has increased over time. Based on GVC incomes, we find that revealed comparative advantage of the EU27 is shifting to activities related to the production of non-electrical machinery and transport equipment, and away from non-durables. We also find that the number of jobs involved (GVC jobs) is declining and increasingly carried out by high-skilled workers outside the manufacturing sector, highlighting the uneven distributional consequences of production fragmentation. The results show that a GVC perspective on competitiveness is needed to better inform the policy debates on globalization."

"The breakdown of the communist regime in Eastern Europe marked a historical event for countries on both sides of the iron curtain. Applying the recently released EU KLEMS database on sectoral growth and productivity measures, we study the period after the transformational recession 1995-2004 for Austria, Czech Republic, Hungary, Slovak Republic, and Slovenia and compare the performance to a group of European core economies. Our analysis reveals pronounced differences in performance but also striking similarities in terms of industrial structure. Beginning witha brief account of aggregate growth and its components, the focus is then on specialisation patterns and the varying contribution of industries characterised by educational intensity. Fianlly, we investigate the manufacturing sector in more detail, demonstrating that the Eastern European countries sucessfully specialised in higher-tech sectors which might be explained by high productivity growth rates in these sectors."

"The freedom of movement of persons is one of the core tenets of the European Union. Immigration however is often seen as a cause for concern amongst native workers, as rising labour supply may threaten jobs and create downward pressure on wages. National politicians are increasingly under pressure to guard against it - in times of recession particularly. Despite this, there is evidence that highly-skilled migrant labour has the potential to raise competitiveness significantly and in theory this may feed into productivity. In this paper, we explore first the composition of inward migration to the EU and within the EU, concentrating specifically on the role of the highly-skilled and the extent to which migrants are overqualified within their jobs. We then analyse whether migrant workers affect productivity at the sectoral level. We find underutilisation of skilled foreign labour and there is little evidence in general to suggest that migrants have raised productivity which may in part be attributable to over-qualification. However, we find robust evidence that migrants - particularly highly-skilled migrants - play a positive role in productivity developments in industries which are classified as 'skill intensive'. "

"This study considers the overall implications of changes in employment patterns for the nature of the jobs in which people are employed and for job quality, in particular for the EU member states over the period 1995-2005. Jobs, defined as a particular occupation in a particular industry, are ranked according to their relative wage or their relative skill intensity. Given that these job rankings are relatively stable over time, we examine whether job expansion mainly took place for jobs in the lower or upper part of the ranking. Overall, the results suggest an increase in job quality in most of the countries included; in particular, the hypothesis of 'job polarization' could not be supported. The study further includes an analysis of differences with respect to job quality and changes in job quality for a number of other dimensions, such as gender, age, part-time working, fix-term contracts, etc."

This study investigates in detail value chain trade of the EU and its Member States, compares it to that of other trading blocs and regions such as NAFTA and East Asia, and delves into implications of value chain trade on specialisation and competitiveness as well as on the declining income elasticity of trade. The analysis of value chain (VC) trade, understood as trade that involves internationally organised production processes, is based on the latest update of the World Input-Output Database (WIOD). It relies to a large extent on a forward production integration measure termed re-exported domestic value added (DVAre) which comprises exports of intermediates that cross international borders at least twice. Results confirm the conjecture that the expansion of international value chains has come to a halt in the post-crisis period (2011-2014). Still, the EU's VC trade was growing at the same pace as value added exports in general in the post-crisis years, implying that value chains were not dismantled. In contrast, worldwide VC trade was indeed less dynamic than value added exports, which could be seen as a sign that some value chains are on the retreat. Zooming closer into the EU, there was a marked reshuffling of market shares of Member States in EU-wide VC trade from large Member States such as France, Italy and the United Kingdom towards a group of Central European (CE) economies – Germany, Austria, the Czech Republic, Hungary, Poland and Slovakia – which together form the Central European Manufacturing Core. Looking at the question whether VC trade is rather regional in scope, VC trade is separated into regional value chain (RVC) trade – involving only regional production partners – and global value chain (GVC) trade – involving also extra-regional partner countries. For the EU as a whole this split is about half-half, with only a slight move towards GVC trade between 2000 and 2014. Strikingly, demand is strongly shaping the organisation of production: while RVCs are predominantly producing for the EU market, GVCs are predominantly procuring for third countries. As regards implications of value chain trade, these are harder to assess. Overall, implications for structural change and competitiveness are rather country and context specific. Changes in attitudes towards international value chains contributed to the significant decline in the income elasticity of trade."

Several years after the global slump, the construction industry and many countries and sectors with construction-related activities and firms tied to them still feel the impact of that financial and economic crisis. In contrast, several years prior to the crisis, there had been a major construction bubble. This report outlines the significance of the construction sector for the EU economy, given its potential in job creation in micro and small enterprises as well as its role as a major consumer of intermediate products and related services. Developments within the industry have wide-reaching implications for the nature of growth that can be achieved, not least in terms of achieving the ambition of smart, sustainable and inclusive growth that is at the heart of the Europe 2020 strategy. Furthermore, a modernisation of the sector and improvements in the efficiency of building construction are also key aspects for the transformation of the EU's energy system as pointed out in the ‘Energy Roadmap 2050'. In this context, the Commission introduced its ‘Strategy for the sustainable competitiveness of the construction sector and its enterprises' that contained a proposed Action Plan Construction 2020 aimed at addressing challenges within the 2020 time horizon. This Action Plan focuses on five thematic priorities which aim to address economic, skills, environmental, regulatory, and international challenges. This study provides an assessment of the role and dynamics of the construction industry in the European Union and its interlinkages with other industries over the last fifteen years. The report draws a picture of a sector in transformation, partly still suffering from the ramifications of the global crisis, and points to the new foundations from which the sector and the whole value chain can develop towards the future."

"Many EU countries are currently undergoing major demographic changes, particularly in terms of shrinking total and working-age populations and population ageing. If this trend is to continue, the functioning of the labour market is at risk as labour shortages are increasingly more likely to emerge which will subsequently imperil further economic growth and catching-up across the EU. This report addresses the likely labour-market consequences of observable demographic trends in the EU. It applies a simple trend-based model which uses observable trends of the past 15 years of the working-age population and the activity rate – which together determine the evolution of the supply of labour – as well as of labour productivity and GDP growth – which together determine the evolution of the demand for labour – to simulate likely scenarios for the future development of labour supply and demand until 2050. Projected future trends in both labour supply and demand are then used to establish whether and – if so – in what year adverse past demographic developments are likely to kick in and begin jeopardising further growth. Different simulation exercises demonstrate that in some EU countries – particularly countries in Central and Eastern Europe – labour supply-side constraints would already materialise in the mid-2020s, which calls for quick policy action to address and ideally avert the imminent demographic collapse. "

"The future of employment and labour demand growth in the dawning era of intelligent robots and other new technologies is heavily debated. This paper argues that this discussion needs to be complemented by a second trend which has been unfolding in Europe for some time, namely the demographic decline. Various demographic scenarios for many EU countries point towards a significant decline in the working-age population in the near future which puts the functioning of labour markets at risk as labour shortages become increasingly more likely and subsequently threaten economic growth. In this context, this paper gives an overview of recent trends in the growth of real value added, labour productivity and employment as well as of demographic scenarios. Based on these trends, the hypothetical increase of labour productivity growth which would be required to keep real GDP growth at its current level, despite the projected reduction in the workforce, is calculated. Results show that the hypothetical labour productivity growth rate required is about one percentage point higher than the actual growth rate, suggesting that the current labour productivity growth rate in the EU needs to more than double. A complementary econometric analysis shows that even though robots exhibit a positive impact on labour productivity growth, this is not (yet) strong enough to close the gap between the recent and the hypothetical labour productivity trend growth rate which would be required."