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on Labour Economics |
| By: | Müller, Kai-Uwe (DIW Berlin); Neumann, Michael (DIW Berlin); Wrohlich, Katharina (DIW Berlin) |
| Abstract: | The paper extends a static discrete-choice labor supply model by adding participation and hours constraints. We identify restrictions by survey information on the eligibility and search activities of individuals as well as actual and desired hours. This provides for a more robust identification of preferences and constraints. Both, preferences and restrictions are allowed to vary by and are related through observed and unobserved characteristics. We distinguish various restrictions mechanisms: labor demand rationing, working hours norms varying across occupations, and insufficient public childcare on the supply side of the market. The effect of these mechanisms is simulated by relaxing different constraints at a time. We apply the empirical frame- work to evaluate an in-work benefit for low-paid parents in the German institutional context. The benefit is supposed to increase work incentives for secondary earners. Based on the structural model we are able to disentangle behavioral reactions into the pure incentive effect and the limiting impact of constraints at the intensive and extensive margin. We find that the in-work benefit for parents substantially increases working hours of mothers of young children, especially when they have a low education. Simulating the effects of restrictions shows their substantial impact on employment of mothers with young children. |
| Keywords: | labor supply, hours restrictions, involuntary unemployment, gender |
| JEL: | J22 J23 J16 J64 |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12003&r=all |
| By: | Ramos, Raul (University of Barcelona); Sanromá, Esteban (University of Barcelona); Simón, Hipólito (Universidad de Alicante) |
| Abstract: | This research examines wage differentials associated to different collective bargaining regimes in Spain and their evolution over time based on matched employer-employee microdata. The primary objective is to analyse the wage differentials associated to the presence of a firm-level agreement and how they have evolved, taking into account the changes in the economic cycle and the recent labour reform of 2012. The second objective of the study is to examine the impact on wages of an absence of a collective agreement. This regime has become more prevalent due to the regulatory changes associated to the labour reform. From the evidence obtained it may be concluded that, although the higher wages observed in company-level agreements are systematically explained by the better characteristics of firms with labour agreements, there is a positive wage premium that favours workers mostly in the middle and upper-middle end of the wage distribution. This premium has remained relatively stable over time and does not seem to have been affected by the reform, although a degree of cyclical evolution cannot be ruled out. With respect to the impact on wages of the absence of a collective agreement, the results suggest that this level of bargaining, which is still fairly scarce, despite displaying an increasing trend, is associated, on average, to comparatively low wages, and, consequently, to higher wage flexibility. The principal explanatory cause for this wage differential is the existence of a negative wage premium for workers of firms covered by sectoral agreements, particularly those at the lower end of the distribution. |
| Keywords: | collective bargaining, wage differentials, decomposition methods, economic cycle |
| JEL: | J31 J51 |
| Date: | 2018–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12013&r=all |
| By: | Cairo, Isabel (Board of Governors of the Federal Reserve System); Fujita, Shigeru (Federal Reserve Bank of Philadelphia); Morales-Jimenez, Camilo (Board of Governors of the Federal Reserve System) |
| Abstract: | Using a representative-household search and matching model with endogenous labor force participation, we study the interactions between extensive-margin labor supply elasticities and the cyclicality of labor force participation flows. Our model successfully replicates salient business-cycle features of all transition rates between three labor market states, the unemployment rate, and the labor force participation rate, while using values of elasticities consistent with micro evidence. Our results underscore the importance of the procyclical opportunity cost of employment, together with wage rigidity, in understanding the cyclicality of labor market flows and stocks. |
| Keywords: | Labor force participation; labor market transitions; labor supply elasticity; unemployment |
| JEL: | E24 J64 |
| Date: | 2019–01–09 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedpwp:19-3&r=all |
| By: | Martinez, Daniel (Inter-American Development Bank); Mitnik, Oscar A. (Inter-American Development Bank); Salgado, Edgar (Inter-American Development Bank); Scholl, Lynn (Inter-American Development Bank); Yanez-Pagans, Patricia (IDB Invest) |
| Abstract: | Limited access to safe transportation is one of the greatest challenges to labor force participation faced by women in developing countries. This paper quantifies the causal impacts of improved urban transport systems in women´s employment outcomes, looking at Bus Rapid Transit (BRT) and elevated light rail investments in the metropolitan region of Lima, Perú. We find large gains in employment and earnings per hour among women, and not for men, due to these investments. Most of the gains arise on the extensive margin, with more women being employed, but employment does not appear to be of higher quality than that for comparison groups. We find also evidence of an increase in the use of public transport. Results are robust to alternative specifications and we do not find evidence that they are driven by neighborhood composition changes. Overall, these findings suggest that infrastructure investments that make it more convenient and safer for women to use public transport can generate important labor market impacts for women who reside in the area of influence of the improved infrastructure. |
| Keywords: | urban transport, gender, employment, impact evaluation |
| JEL: | J01 J16 O12 R40 |
| Date: | 2018–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12020&r=all |
| By: | Jäger, Simon (Massachusetts Institute of Technology); Schoefer, Benjamin (University of California, Berkeley); Young, Samuel (Massachusetts Institute of Technology); Zweimüller, Josef (University of Zurich) |
| Abstract: | Nonemployment is often posited as a worker's outside option in wage setting models such as bargaining and wage posting. The value of this state is therefore a fundamental determinant of wages and, in turn, labor supply and job creation. We measure the effect of changes in the value of nonemployment on wages in existing jobs and among job switchers. Our quasi-experimental variation in nonemployment values arises from four large reforms of unemployment insurance (UI) benefit levels in Austria. We document that wages are insensitive to UI benefit levels: point estimates imply a wage response of less than $0.01 per $1.00 UI benefit increase, and we can reject sensitivities larger than 0.03. In contrast, a calibrated Nash bargaining model predicts a sensitivity of 0.39 – more than ten times larger. The empirical insensitivity holds even among workers with a priori low bargaining power, with low labor force attachment, with high predicted unemployment duration, among job switchers and recently unemployed workers, in areas of high unemployment, in firms with flexible pay policies, and when considering firm-level bargaining. The insensitivity of wages to the nonemployment value we document presents a puzzle to widely used wage setting protocols, and implies that nonemployment may not constitute workers' relevant threat point. Our evidence supports wage-setting mechanisms that insulate wages from the value of nonemployment. |
| Keywords: | wages, bargaining, unemployment benefits, nonemployment |
| JEL: | J31 J60 J65 |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11996&r=all |
| By: | Jesus Ferreiro; Carmen Gómez |
| Abstract: | For mainstream economics, rigidities in the labour market are the primary determinants of high and persistent long-term unemployment rates, leading to the need to reform labour market institutions and make them more flexible. Flexible labour markets would not only help to smooth normal business cycle fluctuations (implying a small impact of these fluctuations on employment and unemployment) but also to reduce the negative impacts on labour market of structural shocks. If we focus on the labour market performances in the European Union during the Great Recession, we can easily detect the existence of significant differences in the impact of this common structural shock on the domestic labour markets. For mainstream economics, the countries with the best results in terms of unemployment and employment would have been those that had a more flexible labour market at the beginning of the crisis and/or those having implemented reforms to increase this flexibility. The aim of this paper is to determine the validity of this argument, that is, whether labour reforms making the labour market more flexible effectively ensure macroeconomic stability by reducing the impact on the labour market of economic shocks. Using panel data techniques, we investigate whether, as mainstream studies argue, the evolution of employment and unemployment in the EU labour markets is explained, and to what extent, by the levels and changes registered in the indicators of employment protection legislation. Conversely, we examine whether, as heterodox and post-Keynesian studies suggest, this evolution is explained by the changes registered in economic activity (i.e., GDP growth). |
| Keywords: | employment, unemployment, Great Recession, employment protecti on |
| JEL: | C23 E24 J21 J64 J88 |
| Date: | 2019–01 |
| URL: | http://d.repec.org/n?u=RePEc:ast:wpaper:0037&r=all |
| By: | Brücker, Herbert (Institute for Employment Research (IAB), Nuremberg); Glitz, Albrecht (Universitat Pompeu Fabra); Lerche, Adrian (Universitat Pompeu Fabra); Romiti, Agnese (University of Strathclyde) |
| Abstract: | In this paper, we analyze how the formal recognition of immigrants' foreign occupational qualifications affects their subsequent labor market outcomes. The empirical analysis is based on a novel German data set that links respondents' survey information to their administrative records, allowing us to observe immigrants at monthly intervals before, during and after their application for occupational recognition. Our findings show substantial employment and wage gains from occupational recognition. After three years, the full recognition of immigrants' foreign qualifications increases their employment rates by 24.5 percentage points and raises their hourly wages by 19.8 percent relative to immigrants without recognition. We show that the increase in employment is largely driven by a higher propensity to work in regulated occupations. Relating our findings to the economic assimilation of immigrants in Germany, we further document that occupational recognition leads to substantially faster convergence of immigrants' earnings to those of their native counterparts. |
| Keywords: | occupational recognition, immigrants, labor markets |
| JEL: | J15 J24 J44 J61 |
| Date: | 2018–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12030&r=all |
| By: | Farré, Lídia (University of Barcelona); Gonzalez, Libertad (Universitat Pompeu Fabra) |
| Abstract: | We find that the introduction of two weeks of paid paternity leave in Spain in 2007 led to delays in subsequent fertility. Following a regression discontinuity design and using rich administrative data, we show that parents who were (just) entitled to the new paternity leave took longer to have another child compared to (just) ineligible parents. We also show that older eligible couples were less likely to have an additional child within the following six years after the introduction of the reform. We provide evidence in support of two potentially complementary channels behind the negative effects on subsequent fertility. First, fathers' increasing involvement in childcare led to higher labor force attachment among mothers. This may have raised the opportunity cost of an additional child. We also find that men reported lower desired fertility after the reform, possibly due to their increased awareness of the costs of childrearing, or to a shift in preferences from child quantity to quality. |
| Keywords: | paternity leave, fertility, labor market, gender, natural experiment |
| JEL: | J48 J13 J16 |
| Date: | 2018–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12023&r=all |
| By: | Sparber, Chad (Colgate University) |
| Abstract: | Highly-educated foreign-born workers can secure legal US employment through the H-1B program. The annual cap on H-1B issuances varies across individuals' US educational experience, H-1B work history, and employer type. Caps are met quickly in most but not all years. This paper exploits these differences to identify whether firms substitute across different sources of highly-educated, foreign-born, H-1B labor. New H-1B workers without advanced degrees from US universities substitute with new H-1B workers possessing advanced US degrees. We find no evidence for substitution with established H-1B workers. |
| Keywords: | skilled workers, H-1B status, immigrant |
| JEL: | J61 F22 |
| Date: | 2018–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12028&r=all |
| By: | Till Nikolka |
| Abstract: | This paper investigates the link between family ties and return migration using Danish full population register data. Couples returning from Denmark to the non-Nordic countries are positively selected with respect to income of the primary earner. Positive selection holds for male and female primary earners, but is weaker among dual earner couples and among couples with children. Results suggest that schooling considerations as well as factors related to cultural identity play a role for return decisions of couples with children. |
| Keywords: | International migration, family migration, return migration, education |
| JEL: | F22 J13 J61 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ifowps:_286&r=all |
| By: | Scholl, Lynn (Inter-American Development Bank); Martinez, Daniel (Inter-American Development Bank); Mitnik, Oscar A. (Inter-American Development Bank); Oviedo, Daniel (University College London); Yanez-Pagans, Patricia (IDB Invest) |
| Abstract: | Despite the growing interest in and proliferation of Bus Rapid Transit (BRT) systems around the world, their causal impacts on labor market outcomes remain unexplored. Reduced travel times for those who live near BRT stations or near feeder lines, may increase access to a wider array of job opportunities, potentially leading to increased rates of employment, access to higher quality (or formal) jobs, and increased labor hours and earnings. This paper assesses the effects of the Metropolitano, the BRT system in Lima (Peru), on individual-level job market outcomes. We rely on a difference-in-differences empirical strategy, based on comparing individuals who live close to the BRT system with a comparison group that lives farther from the system, before and after the system started to operate. We find large impacts on employment, hours worked and labor earnings for those individuals close to the BRT stations, but not for those who live close to the feeder lines. Despite the potential to connect poor populations, we find no evidence of impacts for populations living in lower income areas. |
| Keywords: | Bus Rapid Transit, employment, impact evaluation |
| JEL: | J01 J21 O12 R40 |
| Date: | 2018–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12019&r=all |
| By: | Feir, Donna (Federal Reserve Bank of Minneapolis); Gillezeau, Rob (University of Victoria); Jones, Maggie E.C. (University of Victoria) |
| Abstract: | In the late 19th century, the North American bison was brought to the brink of extinction in just over a decade. We show that the bison’s slaughter led to a reversal of fortunes for the Native Americans who relied on them. Once the tallest people in the world, the generations of bison-reliant people born after the slaughter were among the shortest. Today, formerly bison-reliant societies have between 20-40% less income per capita than the average Native American nation. We argue that federal Indian policy that limited out-migration from reservations and restricted employment opportunities to crop based agriculture hampered the ability of bison-reliant societies to adjust in the long-run, generating lasting regional disparities associated with other indicators of social dislocation, such as suicide and unrest. |
| Keywords: | North American Bison; Buffalo; Extinction; Economic History; Development; Displacement; Native Americans; Indigenous; Income Shock; Intergenerational Mobility |
| JEL: | I15 J15 J24 N31 N32 |
| Date: | 2019–01–14 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedmci:2019_001&r=all |
| By: | John T. Addison; Paulino Teixeira |
| Abstract: | Cross-country data are used to establish perceived shortfalls in employee involvement based on the responses of employee representatives in EU establishments with formal workplace employee representation. The desire for greater involvement is smaller where workplace representation is via works councils than union bodies, a finding that also obtains across country clusters. However, the favorable influence of the works council institution, if not information provision, does not carry over to situations in which management is adjudged uncooperative and untrustworthy. Whether the views of these respondents are representative of the workforce and hypothetically of a workforce currently without representation is also considered. |
| Keywords: | formal workplace employee representation, works councils, union agencies, information/consultation/participation deficits, union density, country heterogeneity, industrial relations quality |
| JEL: | J53 J58 J83 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_7399&r=all |
| By: | Hugo Hopenhayn; Julian Neira; Rish Singhania |
| Abstract: | The US economy has undergone a number of puzzling changes in recent decades. Large firms now account for a greater share of economic activity, new firms are being created at a slower rate, and workers are getting paid a smaller share of GDP. This paper shows that changes in population growth provide a unified quantitative explanation for these long-term changes. The mechanism goes through firm entry rates. A decrease in population growth lowers firm entry rates, shifting the firm-age distribution towards older firms. Heterogeneity across firm age groups combined with an aging firm distribution replicates the observed trends. Micro data show that an aging firm distribution fully explains i) the concentration of employment in large firms, ii) and trends in average firm size and exit rates, key determinants of the firm entry rate. An aging firm distribution also explains the decline in labor’s share of GDP. In our model, older firms have lower labor shares because of lower overhead labor to employment ratios. Consistent with our mechanism, we find that the ratio of nonproduction workers to total employment has declined in the US. |
| JEL: | E13 E20 J11 L16 L26 |
| Date: | 2018–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:25382&r=all |
| By: | Bindler, Anna (anna.bindler@economics.gu.se); Ketel, Nadine (Department of Economics, School of Business, Economics and Law, Göteborg University) |
| Abstract: | Little is known about the costs of crime to victims and their families. In this paper, we use unique and detailed register data on victimisations and labour market outcomes from the Netherlands to overcome data restrictions previously met in the literature and estimate event-study designs to assess the short- and long-term effects of criminal victimisation. Our results show significant decreases in earnings (6.6-9.3%) and increases in the days of benefit receipt (10.4-14.7%) which are lasting up to eight years after victimisation. We find shorter-lived responses in health expenditure. Additional analyses suggest that the victimisation can be interpreted as an escalation point, potentially triggering subsequent adverse life-events which contribute to its persistent impact. Heterogeneity analyses show that the effects are slightly larger for males regarding earnings and significantly larger for females regarding benefits. These differences appear to be largely (but not completely) driven by different offence characteristics. Lastly, we investigate spill-over effects on nonvictimised partners and find evidence for a spill-over effect of violent threat on the partner’s earnings. |
| Keywords: | Crime; victimisation; labour market outcomes; event-study design |
| JEL: | J01 J12 K14 |
| Date: | 2019–01 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunwpe:0749&r=all |
| By: | Katharina Candel-Haug; Alexander Cuntz; Oliver Falck |
| Abstract: | The economic consequences of migration are hotly debated and a main topic of recent populist movements across Europe. We analyze Polish immigration in the context of the 2004 enlargement of the European Union and find a positive and significant spillover effect of the immigrants on the number of local inventors in German counties in 2001-2010. For causal identification, we exploit a historical episode in the Polish migration history to Germany before the fall of the Iron Curtain and construct a shift-share instrument. Our results differ from findings for high-skilled migration to the United States, which is particularly interesting as Polish immigration to Germany was not based on selection by qualification in our period of analysis. |
| Keywords: | migration, innovation |
| JEL: | J61 O31 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_7409&r=all |
| By: | Imbert, Clement (University of Warwick and JPAL); Seror, Marlon (University of Bristol); Zhang, Yifan (Chinese University of Hong Kong); Zylberberg, Yanos (University of Bristol and CESifo) |
| Abstract: | This paper estimates the causal effect of rural-urban migration on urban production in China. We use longitudinal data on manufacturing firms between 2001 and 2006 and exploit exogenous variation in rural-urban migration due to agricultural price shocks. Following a migrant inflow, labor costs decline and employment expands. Labor productivity decreases sharply and remains low in the medium run. A quantitative framework suggests that destinations become too labor-abundant and migration mostly benefits lowproductivity firms within locations. As migrants select into high-productivity destinations, migration however strongly contributes to the equalization of factor productivity across locations |
| JEL: | D24 J23 J61 O15 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:wrk:warwec:1185&r=all |
| By: | Eder, Christoph (University of Linz); Halla, Martin (University of Linz) |
| Abstract: | The East-West gap in the German population is believed to originate from migrants escaping the socialist regime in the German Democratic Republic (GDR). We use newly collected regional data and the combination of a regression discontinuity design in space with a difference-in-differences approach to document that the largest part of this gap is due to a massive internal migration wave 3 years prior to the establishment of the GDR. The timing and spatial pattern of this migration movement suggest that the dominant motive was escaping physical assault by the Soviet army and not avoiding the socialist regime. The skill composition of these migrants shows a strong positive selection. The gap in population has remained remarkably sharp in space and is growing. |
| Keywords: | institutions, wartime violence against civilians, selective migration, regional migration, World War II, Germany, spatial distribution, regional economic activity |
| JEL: | N44 N94 R23 R11 R12 J61 |
| Date: | 2018–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12031&r=all |
| By: | Garbinti, Bertrand; Georges-Kot, Simon |
| Abstract: | This paper provides new insights on the effect of inheritance receipt on retirement. We build on lifelong information on inheritances received and labor market transitions available for respondents of the French Wealth Survey. This feature allows us to compare current retirement rates among current and future inheritors. Chances of current retirement are 40% higher among current inheritors than among individuals who will inherit in the next two years, but there is substantial heterogeneity in this effect across socio-demographic groups. The effect is also stronger for individuals with a higher risk aversion, which we interpret with a simple theoretical model. JEL Classification: J14, J26 |
| Keywords: | inheritance, labor supply, retirement, risk aversion |
| Date: | 2019–01 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20192222&r=all |
| By: | Jutvik, Kristoffer (Department of Economics); Robinson, Darrel (Department of Economics) |
| Abstract: | In this study we exploit a sudden policy change implemented in Sweden in order to evaluate the effects of permanent residency on labour market participation. In short, the policy change implied that Syrians were granted permanent instead of temporary residency as before the new regulations. Using detailed Swedish registry data, we examine the effect of the introduction of permanent residency on three measures of labour market inclusion in the short-term. We analyze the data through a simple difference-in-means as well as through comparison to groups unaffected by the policy in a difference-in-differences design and a synthetic control group approach. Our conclusions are twofold. On the one hand, we conclude that temporary residents that are subject to a relatively less-inclusive situation earn more and are unemployed less. However, at the same time, they are less likely to spend time in education than are those with permanent residency. |
| Keywords: | Labour Market Inclusion; Asylum Policy; Sweden; Residence Permits |
| JEL: | J15 J24 O15 |
| Date: | 2019–01–07 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:uunewp:2018_017&r=all |
| By: | Matz Dahlberg; Madhinee Valeyatheepillay |
| Abstract: | This paper uses Swedish geocoded data to empirically investigate the effect of a geographic dispersal policy on the characteristics of the refugees’ individualized (k-nearest) neighborhoods and the placed refugees’ neighborhood trajectories over time. Our findings indicate that the initial neighborhood of placed refugees are defined by a higher share of natives, a lower share of non-Western immigrants and a higher share of high-income individuals compared to refugees that arrived in a time period when they could choose themselves where to locate. In this sense, the placed refugees are geographically more integrated. We also find that, in subsequent moves for the placed refugees, those moving longer distances experience a drop in the share of natives and an increase in the share of non-Western in their close neighborhoods. Stayers and short-distance movers, on the other hand, have a less drastic change in their neighborhood in terms of share of natives and nonwestern over time. |
| Keywords: | Refugees, placement policy, individualized neighborhoods, sorting, geographic integration |
| JEL: | J15 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ifowps:_285&r=all |
| By: | Maria Rosaria Carillo (Università di Napoli Parthenope); Vincenzo Lombardo (Università di NapoliParthenope); Alberto Zazzaro (Università di Napoli Federico II, CSEF and MoFiR) |
| Abstract: | This paper explores the causes and the consequences of the evolution of family firms in the growth process. The theory suggests that in early stages of development, valuable family specific human capital stimulated the productivity of family firms and the development process. However, in light of the rise in the importance of managerial talents for firms’ productivity in later stages, family firms generated a misallocation of managerial talents, curbing productivity and economic growth. Evidence supports the dual impact of family firms in the development process and the role of socio-cultural characteristics in observed variations in the productivity of family firms. JEL Classification: D2, J62, L26, O14, O33, O4, Z1. |
| Keywords: | Family firms, economic development and growth, culture and social structure, allocation of talents, industrialization |
| Date: | 2019–01–10 |
| URL: | http://d.repec.org/n?u=RePEc:sef:csefwp:521&r=all |
| By: | Shushanik Margaryan; Annemarie Paul; Thomas Siedler |
| Abstract: | Using data from the German Socio-Economic Panel and exploiting the staggered implementation of a compulsory schooling reform in West Germany, this article finds that an additional year of schooling lowers the probability of being very concerned about immigration to Germany by around six percentage points (20 percent). Furthermore, our findings imply significant spillovers from maternal education to immigration attitudes of her offspring. While we find no evidence for returns to education within a range of labour market outcomes, higher social trust appears to be an important mechanism behind our findings. |
| Keywords: | attitudes towards immigration; intergenerational effects; schooling; externalities; instrumental variables estimation |
| JEL: | J15 J62 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp1001&r=all |
| By: | Karlson , Nils (The Ratio Institute); Wennerberg, Felinda (The Ratio Institute) |
| Abstract: | In November 2017, the European Union proclaimed its fourth pillar, The European Pillar of Social Rights., to promote a “truly pan-European” labour market. A large number of specific social rights are endorsed. This paper investigates the potential short- and long-term consequences of the social pillar on the welfare and prosperity of Europe. Moreover, we discuss its potential effects on the legitimacy of the European Union. Our conclusions indicate that rather than to “support and complement” the social and labour market policies of the Member States, the European Union is likely to replace these policies with the “better” goals of the Union in an effort to fully implement the principles established in the social pillar. The principle of subsidiarity in this case promotes centralisations. There are strong reasons to believe that increased centralisation to EU-level in these areas will reduce preference satisfaction, weaken accountability and decrease efficiency and innovation. In the long run the social pillar therefore is likely to be a threat to welfare and prosperity in Europe, and as a consequence, cause damage to the legitimacy of the European Union. |
| Keywords: | Nils Karlson; Felinda Wennerberg; European Integration; Social policy; Labour policy; Subsidiarity; Legitimacy; Prosperity |
| JEL: | F15 H53 I38 J58 |
| Date: | 2018–11–19 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ratioi:0314&r=all |