Browse by: "2015"

Managing and regulating the extractive industries can pose substantial challenges to minerals-rich countries. Aiming to overcome the “resource curse”, some countries attempt to generate greater gains from their natural resources by using trade policy instruments such as export restrictions. Others look to create a balanced regulatory framework to maximise gains from sustainable extraction and minimise the negative spillover effects. Colombia and Peru have aimed to do the latter. This study examines their experiences as regards some aspects of the management of their extractive industries. In particular, it examines the design of the tax system as it applies to non-renewable resources, the reform of the distribution of revenues from the sector, and strategies for tackling illegal mining. These policy areas are important to ensure that the extraction of natural resources benefits the economies and societies of the two Andean nations.

This paper analyses income inequality in Ireland using a new panel dataset based on the administrative tax records of the Revenue Commissioners for Ireland. High inequality at market incomes in Ireland by international standards appears to be driven by both ends of the income distribution. An analysis of income mobility over time shows it has been low at both ends of the income distribution, though it increased at the low end once the crisis began, reflecting the sharp deterioration of the labour market. The data confirms that the tax system is highly progressive at the high end of income distribution and the welfare system provides the most significant support to lower income deciles in Ireland. The redistributive function in the tax and benefit system was enhanced during the last decade, not only because more income support was necessitated with the crisis, but also because of steeper and more progressive tax rates. This working paper relates to the 2015 OECD Economic Survey of Ireland (www.oecd.org/eco/surveys/economic-survey-ireland.

This paper presents a first set of updates and extensions of the large body of existing evidence about the aggregate labour market impact of structural policies, in the context of enhancing the OECD’s supply-side framework for the quantification of reform packages. In line with previous findings, elements of the tax benefit system, activation policies and wage setting institutions are found to be robust policy determinants of the aggregate employment and unemployment rates. Looking beyond the overall employment impact, outcomes for vulnerable groups such as the low educated, the youth and the elderly tend to be more affected by certain structural policies, including specific measures targeted at them. Finally, more competition-friendly product market regulations are also found to impact aggregate employment rates positively and significantly, although less robustly.

The economic literature suggests that a revenue-neutral shift of tax revenues from income taxes to property taxes would increase GDP per capita in the medium term. This paper analyses for Ireland the consequences of such a shift in the tax mix. In particular, it examines whether this can be carried out in a way that would neither undermine income distribution nor depress government revenue. Simulations using the ESRI tax-benefit model, SWITCH, suggest it is possible to achieve such a broadly revenue-neutral tax shift in a non-regressive way, while lowering marginal tax rates for most taxpayers. In particular, reductions in the Universal Social Charge would reduce marginal and average tax rates and have a positive impact for the income of most households. This could be funded by shifting the tax base toward residential properties, though this might have an adverse effect on income distribution, due to Ireland’s high rates of home ownership throughout the income distribution. The analysis shows that low income groups could be protected through the careful introduction of income-related supports, with revenue losses recovered through a more progressive property tax rate structure. Overall, the simulations show that a shift from labour to property tax can be pro-growth and pro-employment, without equity losses. The paper therefore suggests that tax reform can be inclusive.

This paper examines the labour market impacts of lifestyle risk factors and associated chronic diseases, in terms of employment opportunities, wages, productivity, sick leave, early retirement and receipt of disability benefits. It provides a review of the evidence of the labour market outcomes of key risk factors (obesity, smoking and hazardous drinking) and of a number of related chronic diseases, along with findings from new analyses conducted on data from a selection of OECD countries. Overall, the evidence suggests that chronic diseases and associated risk factors have potentially large detrimental labour market impacts, but with mixed findings in some areas. Obesity and smoking clearly impair employment prospects, wages and labour productivity. Cardiovascular diseases and diabetes have negative impacts on employment prospects and wages, and diabetes, cancer and arthritis lower labour productivity. Alcohol use, cancer, high blood pressure and arthritis have mixed effects on employment and wages, and are not always linked with increased sickness absence (e.g. cardiovascular diseases and high blood pressure). Finally, this paper stresses the importance of these findings for the economy at large, and supports the use of carefully designed chronic disease prevention strategies targeting people at higher risk of adverse labour market outcomes, which may lead to substantial gains in economic production through a healthier and more productive workforce.

All OECD countries recognise the benefits that stem from high speed broadband networks and have made tremendous progress in recent years in fostering their deployment. Nonetheless, many challenges remain in terms of how to enhance and expand these networks to meet the growing demands of an increasingly digital economy and society. Although private investments have been the overwhelming source of finance for high speed networks in OECD countries, municipal networks have been used in a number of OECD countries to fill gaps or provide substantial areas of service in a region, city or smaller town and surrounding locations. This report examines some of the experience with these municipal broadband networks in selected OECD countries. Municipal networks are defined here as high speed networks that have been fully or partially facilitated, built, operated or financed by local governments, public bodies, utilities, organisations, or co-operatives that have some type of public involvement. The models and experience of these networks have varied from being highly successful to not meeting expectations. In some cases, they have provided welcome competition by offering an alternative infrastructure and have opened the market for retail Internet service providers by separating the basic infrastructure from services. In other cases, they have enabled the use of shared infrastructure. Some have built on a long tradition of municipalities providing services from entities owned by them, such as the provision of utility services like energy, water, gas, or cable television. Some have involved public private partnerships, others have been privatised following initial public ownership and some are community driven.

The International Standard Classification of Education (ISCED) is the reference framework used to classify education programmes and related qualifications by education levels and fields. The basic concepts and definitions of ISCED are intended to be internationally valid and cover the full range of education systems. ISCED 2011, the second major revision of the classification, reflects significant shifts in the structure of tertiary education resulting from the Bologna process in Europe, the development of early childhood education, and increasing interest in statistics on the outcomes of education such as educational attainment. ISCED 2011 has been implemented for the first time in data collected for indicators published in Education at a Glance 2015. This new classification offers the potential for new analysis at both tertiary level and in early childhood education. The ISCED classification of fields of education was reviewed separately. The ISCED 2013 Fields of Education and Training classification (ISCED-F 2013) will be used for the first time in Education at a Glance 2017.

La Classification internationale type de l’éducation (CITE) est le cadre de référence utilisé pour classer les programmes éducatifs et les certifications correspondantes par niveaux d’éducation et domaines d’études. Les définitions et les concepts fondamentaux de la CITE ont été établis de manière à être internationalement valides et applicables à l’ensemble des systèmes d’éducation. Deuxième révision majeure de cette classification, la CITE 2011 prend en compte des évolutions importantes dans la structure de l'enseignement tertiaire résultant de la mise en œuvre du processus de Bologne en Europe, le développement des programmes d’éducation de la petite enfance et un intérêt accru pour les statistiques relatives aux résultats de l'éducation, comme le niveau de formation. La CITE 2011 a été utilisée pour la première fois pour la collecte des données des indicateurs publiés dans cette édition 2015 de Regards sur l’éducation. Cette nouvelle classification offre de nouvelles perspectives analytiques, tant au niveau de l’enseignement tertiaire qu’à celui de l’éducation de la petite enfance. La classification CITE des domaines d’études a fait l’objet d’une révision distincte. La Classification des domaines d’études et de formation de la CITE 2013 (CITE-F 2013) sera utilisée pour la première fois dans l’édition 2017 de Regards sur l’éducation.

The topic of biodiversity loss has been the subject of a vast and growing scientific and economic literature. Species are estimated to be going extinct at rates 100 to 1000 times faster than in geological times. Globally, terrestrial biodiversity is projected to decrease by a further 10% by 2050. As with biodiversity, the planet has also experienced major losses in the services derived from ecosystems. During the last century, for example, the planet has lost 50% of its wetlands, 40% of its forests and 35% of its mangroves. Around 60% of global ecosystem services have been degraded in just 50 years. While there is a large and growing literature on the values associated with the services that ecosystems provide, much less has been done in analysing the causality in the other direction – i.e. in assessing the linkages from changes in ecosystem services to the functioning of the economy. This report contributes to an effort to identify environmental pressures under different structural and environmental policy assumptions and the associated damages that will result under different economic scenarios to 2050. Based on these it aims, inter alia, to examine how the environmental pressures may affect economic growth paths. This report contributes to that goal by looking at the consequences of the loss of biodiversity and ecosystem services. It does so by reviewing the main findings in the literature and key issues involved in the valuation of biodiversity and ecosystems services, as well as key issues involved in linking loss of biodiversity and ecosystems services to economic activity. The report finishes by identifying the main opportunities and obstacles in including biodiversity and eco-system services into a dynamic general equilibrium framework.

The United States is at a crossroads in its policies towards the family and gender equality. Currently America provides basic support for children, fathers, and mothers in the form of unpaid parental leave, child-related tax breaks, and limited public childcare. Alternatively, the United States’ OECD peers empower families through paid parental leave and comprehensive investments in infants and children. The potential gains from strengthening these policies are enormous. Paid parental leave and subsidised childcare help get and keep more women in the workforce, contribute to economic growth, offer cognitive and health benefits to children, and extend choice for parents in finding their preferred work-life strategy. Indeed, the United States has been falling behind the rest of the OECD in many social and economic indicators by not adequately investing in children, fathers and mothers.

In order to promote productivity, and thus boost living standards in the long run, public policies need to focus on improving incentives, capabilities and flexibility within an economy. Such policies can be difficult for governments to devise and even more difficult for them to implement, given pressure group politics and fragmented administrative structures. A strong case exists for establishing public institutions that not only help governments identify the right policies, but that can also help them counter pressures against reform and inform the community about what is at stake. Necessary design features for such institutions include independent governance, transparent processes, solid research capacity, an economywide frame of reference and linkages to policy-making mechanisms within government. This paper provides a taxonomy of relevant institutional forms evaluated against these criteria. While the contribution of most organisations to ‘pro-productivity’ policies is incidental to their primary function, some have been expressly designed for this purpose. The extent of their contributions in practice has depended on the detail of their governance and operations, the tasks they have been assigned and how well governments have handled their reports. While there is no ‘one design fits all’ solution, there is considerable scope for most governments to strengthen institutional capability in this area. There is also potential for governments to learn from each other about the relative merits of different approaches, and for existing institutions themselves to build capability by drawing on the experience of others.

A well-functioning labour market is indispensable to promote job creation, increase living standards, and develop a cohesive society. In Italy, the various deficiencies of the labour market have resulted in high unemployment, low labour force participation and job-skill mismatch. These deficiencies have contributed to the problem of allocation of resources, income distribution, and low productivity, reducing people’s well-being. The current government, following on past governments’ reforms, is introducing a package of labour market reforms – the Jobs Act – to improve the labour market in a consistent way. The reform will make the labour market more flexible and inclusive, and reduce duality. The long-lasting problem of effective enforcement will need to be overcome, with an increased focus on rapid implementation by the current government. A set of well-designed institutions, not only labour market policies but also the education system and product market regulation, would encourage higher labour force participation, especially among women, and produce more and better quality jobs in a more skill-intensive economy. This Working Paper relates to the 2015 OECD Economic Survey of Italy (www.oecd.org/eco/surveys/economic-survey-italy.htm).

Over the past decade, France has substantially eased the burden of anti-competitive regulations and effectively enforced competition law against anti-competitive practices. Various sectors have been opened up more widely to competition, and the powers of the Competition Authority have been strengthened. However, the administrative procedures involved in starting a business remain lengthy, and the number of regulations and rules is substantial, while their potential impact on competition is not fully taken into account when they are drawn up and implemented. Recent streamlining initiatives are welcome but remain limited. Meanwhile, the territorial fragmentation of public procurement procedures, which could decline following ongoing reforms, impairs their efficiency and entry and operating requirements appear to go beyond consumer protection in several regulated professions, such as in legal services and health care. In the retail sector, recent reforms have significantly relaxed negotiating conditions between suppliers and retailers, and Sunday trading is intended to be partly liberalised. However, the ban on resale below cost has not been challenged, nor the tight rules controlling commercial zoning. Individual shops that contract with superstore chains cannot change chain easily. Of the network industries, it is in the telecommunications sector that competition has made the most progress, and there is room for further improvements in transport and energy. This Working Paper relates to the 2015 OECD Economic Survey of France (www.oecd.org/eco/surveys/economic-survey-france.htm).

La France a considérablement diminué le poids des réglementations anticoncurrentielles et appliqué de façon efficace le droit de la concurrence dans le cas de pratiques anticoncurrentielles au cours des dix dernières années. Divers secteurs ont été ouverts plus largement à la concurrence et l’Autorité de la concurrence a été dotée de pouvoirs accrus. Toutefois, les procédures administratives lors des créations d’entreprises restent longues et le nombre de normes et réglementations pouvant être appliquées est substantiel alors que leur impact potentiel sur la concurrence n’est qu’imparfaitement pris en compte lors de leur élaboration et de leur mise en oeuvre. Les récents efforts de simplification sont bienvenus mais demeurent encore limités. Dans le même temps, les conditions d’attribution des marchés publics pâtissent, elles, du morcellement territorial de la commande publique qui devrait être réduit grâce à la réforme territoriale en cours, tandis que les conditions d’entrée et d’exercice de nombre de professions réglementées restent relativement restrictives, notamment dans les services juridiques et dans le domaine de la santé. Dans le secteur du commerce de détail, les réformes récentes ont permis d’assouplir significativement les conditions de négociations entre fournisseurs et distributeurs, et les conditions de l’ouverture dominicale sont en train d’être réformées. Cependant, le principe d’interdiction de la revente à perte n’a pas été remis en cause, tout comme le fort encadrement de l’urbanisme commercial. Les commerçants indépendants qui contractent avec de grandes enseignes peuvent difficilement changer d’enseigne. Parmi les industries de réseaux, c’est dans le secteur des télécommunications que la concurrence a le plus progressé, mais elle reste perfectible dans les transports et l’énergie. Ce Document de travail se rapporte à l’Étude économique de l’OCDE de la France 2015 (www.oecd.org/fr/eco/etudes/etude-economique-france.htm).

The determinants of foreign direct investment (FDI) are explored with gravity models, using a Poisson estimator and a linear estimator, both with fixed effects. The heterogeneity of product market regulations has a large and robust impact on cross-border investment: a reduction of regulatory divergence by one fifth could increase FDI by about 15%. In particular, the divergence of command and control regulations and of protection of incumbents (antitrust exemptions, entry barriers in networks and services) reduce cross-border investment. In addition, countries with higher employment protection have both less inward and less outward FDI, and there is some evidence that more complex regulatory procedures reduce inward FDI.

In a majority of OECD countries, GDP growth over the past three decades has been associated with growing income disparities. To shed some lights on the potential sources of trade-offs between growth and equity, this paper investigates the long-run impact of structural reforms on GDP per capita and household income distribution. Pro-growth reforms can be distinguished according to whether they are found to generate an increase or a reduction in household disposable income inequality. Those that contribute to reduce inequality include the reduction in regulatory barriers to competition, trade and FDI, as well as the stepping-up in job search assistance and training programmes. Conversely, a tightening of unemployment benefits for the long-term unemployed is found to lift mean household income but to lower income among poorer households, thus raising inequality. Several other reforms have no significant impact on income distribution.

JEL Classification: 047, D37, E61
Keywords: Growth, inequality, pro-growth policies

Only in some countries is a larger proportion of immigrant students in schools related to lower student performance – and this relationship is mostly explained by the concentration of disadvantaged students in these schools. Immigrant students from the same country of origin and similar socio-economic background often perform differently in different school systems. There is a strong connection between the performance of immigrants at school and their education and labour market outcomes as young adults.

Une plus forte proportion d’élèves immigrés dans les établissements d’enseignement n’est associée à une moindre performance des élèves que dans certains pays – et le cas échéant, cette corrélation s’explique principalement par la concentration d’élèves défavorisés dans ces établissements. Les élèves immigrés originaires du même pays et issus d’un milieu socio-économique similaire obtiennent souvent des résultats différents selon le pays d’accueil où ils sont scolarisés. Il existe une forte corrélation entre la performance des élèves immigrés à l’école et leurs résultats en termes d’éducation et de participation au marché du travail une fois jeunes adultes.