Browse by: "2016"

The generous Danish welfare state relies on a high degree of labour force participation both for financing and in order to ensure social cohesion. This underlines the need for getting work incentives right and improve the employability of vulnerable groups of workers, in particular migrants. Many benefit recipients also face high marginal tax rates for returning to work, creating a barrier for inclusion. Likewise, as the population ages, the need for longer working lives becomes a central aim. In Denmark, much has been done to keep older workers in the labour market, but there is further scope for reducing barriers to work for this group, including through the design of the pension system. Cost pressures at social institutions could be addressed by better reaping the effects on municipal reform, more coordination between different service providers, and open the market for social services, for instance old age care, for private suppliers under a strict quality monitoring framework.

Public stockholding remains a major concern in multilateral negotiations on agricultural trade liberalisation. This paper focuses on identifying alternative policies to buffer stockholding. It first positions buffer stocks within the range of policies aimed at price stabilisation and food security, with a view to identifying alternatives to meet the same policy objectives. The paper then examines the most direct alternative to public food stocks for price stabilisation, namely private stockholding. It explores experience with private stockholding to assess its effectiveness in achieving price stabilisation objectives and the necessary conditions for implementation. As the price stabilisation role of buffer stocks is also argued to be necessary for food security, the paper also explores alternative approaches that governments may take to meeting this food security objective through social safety nets. Some illustrative examples are explored to highlight key elements for successful implementation. The paper concludes with some observations regarding policy alternatives to buffer stocks.

This paper explores the relationship between policy settings and extreme positive and negative growth events, what we call GDP tail risks, using quantile regression methods. Conditioning on several country characteristics such as the size, stage of development and openness to trade as well as macroeconomic policies, the following findings for a panel of mostly OECD countries emerge: First, countries with stronger banking supervision and capital market development, better quality of governance, higher foreign reserves and several labour market characteristics such as higher unemployment benefits and greater spending in active labour market policies tend to experience less severe negative growth shocks (negative tail risk). Second, greater use of macro-prudential tools is generally associated with less extreme positive growth shocks (positive tail risk) and lower average growth. Third, larger automatic stabilisers are associated with both less severe negative and positive growth shocks but also lower average growth.

Certain growth-promoting policies can have negative side-effects by increasing the vulnerability of economies to financial crises. Typical examples are greater openness to financial flows or more liberalised financial markets. This paper investigates whether the growth benefits of policy reforms in these growth-enhancing areas, and others such as trade openness, exceed the possible costs of occasional, albeit potentially severe, crises for a sample of 100 developed and emerging economies from 1970 to 2010. The results suggest that the pro-growth effects of greater capital account openness outweigh the negative effects of a higher propensity to twin crises. Greater domestic financial liberalisation is associated with faster growth, but also with a higher propensity to systemic banking and twin crises. A free floating exchange rate and greater openness to trade, by reducing the likelihood of currency crises, are associated with higher growth. While pro-competitive product market regulations and lower corporate taxes are associated with higher growth, they do not seem to influence financial fragility via higher probability of crises.

The Danish financial sector is big and there is a high degree of inter-connectedness between banks, mortgage institutions and pension funds. Danish households have large balance sheets and high levels of gross debt. Even though the high debt levels are matched by large assets, notably in form of pension savings, there are feedback loops with the housing market and households’ balance sheets contributing to macroeconomic volatility. Currently, the very low interest rate environment may contribute to the building up of risks, notably in the housing market. Given the on-going recovery of the housing market, it is an opportune time to eliminate the debt-bias in taxation, which would strengthen the automatic stabilisers of the fiscal system. In addition, further liberalising the private rental market would help create a more dynamic housing market overall and reduce the need to meet housing needs primarily with the owner occupancy segment.

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 household incomes across the distribution, hence on income inequality. The paper builds on a macro-micro approach by combining recent macro-level estimates of the impact of structural reforms on macroeconomic growth with micro-level estimates of the impact of structural reforms on household incomes across the income distribution. It considers the sources of macroeconomic growth, by decomposing growth in GDP per capita into growth in labour utilisation and labour productivity. This allows for shedding light on the mechanisms through which growth and its drivers, including policy drivers, benefit household incomes at different points of the income distribution. Most structural reforms are found to have little impact on income inequality when the latter is assessed through measures that emphasise the middle class. By contrast, a higher number of structural reforms, in particular social protection reforms, are found to have an impact on income inequality and thus may raise tradeoffs and synergies between growth equity objectives when inequality is assessed through measures that emphasise relatively more incomes among the poor. This corresponds to higher degrees of inequality aversion.

This paper delivers a broad assessment of income inequality in Denmark. As a necessary preamble to provide a basis for discussion, we start by contrasting Danish official inequality measures with those gathered by the OECD in an international context. We show that differences between these two sources are fully explained by differences in methodological choices. We then go beyond synthetic measures of inequality to deliver a granular assessment of income distribution and of the distributional impact of taxes and transfers; and on this basis we compare Denmark to other OECD countries. This approach is then used to quantify the distributional impact of some growth-enhancing reforms undertaken or recommended for Denmark, based on empirical evidence across OECD countries. Finally, we take a forward looking stance by discussing global forces shaping the rise in inequality, in particular skill-biased technological change and deliver a tentative scenario for Denmark in the wider OECD context.

This report explores the relationships between mathematics teachers’ teaching strategies and student learning outcomes in eight countries, using information from the TALIS-PISA link database. First, the study seeks to understand the shaping of teaching strategies by examining the way teachers use different classroom practices and the prevalence of these strategies among teachers across schools and countries. As a result of this exploration, three teaching strategies are put forward: active learning, cognitive activation and teacher-directed instruction. Second, the report aims at identifying the teaching strategies that are positively associated with student skill acquisition. Third and finally, it analyses the contributions of the school and the classroom settings, the teacher background and beliefs, to the implementation of the teaching strategies found to be positively related to student learning outcomes. Results show that cognitive activation strategies and, to a lesser extent, active learning strategies, have a strong association with students’ achievement in mathematics. However, this association seems to be weaker in schools with socio-economically disadvantaged students. Also, teachers from the same school tend to share the same approach to teaching, which indicates that these teaching strategies are part of a “teaching culture” within the school. Teacher self-efficacy and teacher collaboration are shown to be the factors more often associated with the implementation of cognitive activation strategies and active learning. Following on from these findings, the paper concludes with a series of policy recommendations.

Regions and cities play a growing role in tourism development and policy design. The economy-wide effects of tourism are significant and vary a lot from one territory to another in terms of number of visitors, type of tourism, seasonality patterns, revenues and added value per visitor or jobs generated. This OECD review supports a better measurement of the various impacts of tourism at sub-national level by the sharing of good and innovative country statistical initiatives. The review will contribute to the development of reliable data and analysis at regional and local levels for business and policy decision making. The review presents statistical initiatives for Australia, Austria, Canada, Denmark, Finland, France, Ireland, New Zealand, Spain, Switzerland and the United Kingdom. The initiatives focus on a wide range of issues such as total economic impact of tourism; direct economic impacts of tourism; tourism-related employment; enterprise demographics; tourism spending/revenues and high yield visitors, data visualization; regional competitiveness; and sustainability.

PISA 2015, la dernière édition de cette enquête, avait pour domaine majeur d’évaluation la culture scientifique des jeunes de 15 ans, définie comme « la capacité des individus de s’engager dans des questions et des idées en rapport avec la science en tant que citoyens réfléchis ». Pour réussir l’évaluation PISA de sciences, les élèves devaient prouver leur maîtrise de trois compétences : expliquer des phénomènes de manière scientifique (sur la base de la connaissance de faits et concepts scientifiques) ; évaluer et concevoir des investigations scientifiques ; et interpréter des données et des faits de manière scientifique.

This paper applies the OECD-EU methodology to identify the functional urban areas (FUAs) in Colombia. Using the municipal boundaries, population grid data and inter-municipalities commuting flows from the 2005 population census, the paper identifies 53 FUAs accounting for 27 million people, or 63% of the national population. The resulting FUAs are then compared with the existing national definition (Misión del Sistema de Ciudades) and the legally constituted metropolitan areas in Colombia. Finally, using the OECD-EU methodology already applied to OECD countries, the eight largest FUAs in Colombia are compared with the 281 largest FUA in OECD countries, through a set of economic, social and environmental indicators. The application of the OECD-EU methodology allows to identify the whole system of urban areas in Colombia, with the same criterion; it thus provides a complementary tool to the national and city government to better plan and design future urban policy strategies. For example, this paper finds that metropolitan areas in Colombia have smaller commuting areas relative to OECD average and that improvements in the transport infrastructure may strengthen the economic integration of Colombian metropolitan areas.

The most recent round of the assessment, PISA 2015, focused on 15-year-olds’ science literacy, defined as “the ability to engage with science-related issues, and with the ideas of science, as a reflective citizen”. To succeed on the PISA science test, students had to display their mastery of three skills: explaining phenomena scientifically (based on knowledge of scientific facts and ideas), evaluating and designing scientific enquiry, and interpreting data and evidence scientifically.

This paper explores the practical challenges tax policy analysts face when trying to apply differential taxation to “normal” and “excess” returns. The distinction between these two elements is being increasingly used in tax policy. The problem is that there is no clear definition for a “normal” return. While it is often equated to a risk-free return, or the return available on a ten-year government bond, many commentators agree that it should incorporate a risk element. The typical rationale for applying differential taxation stems from the desire to achieve neutral taxation, i.e. minimise the real economic responses of taxpayers due to the wedge taxation imposes between before-tax and after-tax returns. A set of important questions are raised for tax policy analysts to consider. Two crucial factors that make the distinction challenging are heterogeneity and uncertainty. Given the potential for unintended consequences, this is an important issue that warrants more discussion and thought.

As school choice is an increasingly common feature of OECD education systems, the regulation of publicly funded private schools has become a salient concern for researchers and policy makers alike. Focussing on three areas of regulation – selective admission, add-on tuition fees and for-profit ownership – this paper provides a review of the theoretical and empirical literature concerning their effects on equity and educational effectiveness. It also offers an overview of different countries’ approaches to the funding of private education and the methodological challenges involved in their empirical evaluation. The available evidence confirms that the funding of private schools has yielded widely different results across educational systems and suggests that regulatory frameworks are an important factor shaping these outcomes. Selective admission and substantial add-on tuition fees in particular are likely to exacerbate social segregation and can undermine schools’ incentives to compete on the basis of educational quality. The evidence on subsidised for-profit schools is equally divergent across countries but evidence points to the importance of rigorous accreditation processes and clear conditions concerning selectivity and fees to guide allocation of public funds. Although important questions are yet to be conclusively addressed, including the interaction of different regulatory devices and their effect on specific student groups, the existing literature suggests that private school regulation can make an important contribution to the equity and effectiveness of school choice programmes.

This report explores the relationship between services trade policies and mark-ups at the firm level, taken as a measure of competitive pressure. Restrictive regulations are found to enable firms to charge higher mark-ups in a majority of services sectors, suggesting ample scope for pro-competitive gains from trade liberalisation. Barriers to establishment consistently enable incumbent firms shielded from competition to raise their prices, while a lack of regulatory transparency and complex administrative procedures tend to add to all firms’ operating expenses. A “tax equivalent” of trade-restrictive regulations is then inferred from the abnormal price-cost margin of domestic firms in each service sector. These estimates indicate the magnitude of the welfare costs of regulatory trade restrictions across sectors and countries. The sectors with the highest average tax equivalents of STRI indices are broadcasting, construction, storage, and air and maritime transport, while those with the lowest averages are road transport, architecture and cargo-handling. There is however considerable variation between countries in all sectors.

This report sets out some basic rules that underpin an ethical approach to research using new forms of data for social and economic research. These rules and the interpretation that we place upon them give rise to a set of recommendations designed to provide a framework for the ethical governance of research using such data. There are assumptions and limitations underpinning these recommendations – they are not cost-free and will be easier to apply in countries with established research ethics procedures, particularly where research organisations and data owners have access to ethical review bodies. The sharing of expertise on, and knowledge about, research ethics between countries is critical to the creation of a common and cost-efficient ethical environment for social scientific research.

Universal health coverage has been achieved in nearly all OECD countries, providing the population with access to a defined range of goods and services. This paper provides detailed descriptions of how countries delineate the range of benefits covered, including the role of health technology assessment and specific criteria to inform the decision-making process. Further, the paper examines the composition of assessment/appraisal and decision-making bodies across the different OECD health systems, highlighting the role of patients and public as well as transparency of decision-making processes. While the process of including new technologies to the range of benefits covered is structured and relies on a well-defined set of criteria, dynamic adjustments of the range of benefits covered are less structured. The paper then looks at the boundaries of health care coverage and presents a set of services for which coverage varies greatly across the OECD countries.

Financial conditions indices (FCIs) have been developed to summarise financial conditions and also supplement more traditional macroeconomic forecasting. They capture market expectations but also quantitative and survey information. This paper seeks to provide up to date financial conditions indices for six countries, France, Germany, Italy, Japan, the United Kingdom and the United States, as well as the euro area, updating earlier results by the OECD. The addition of the period of the financial crisis period has made radical changes to the original results of the FCI estimation. Country-specific estimates provide a number of wrong signs and insignificant coefficients. We find in general that the panel (and NiGEM) based FCIs are more satisfactory. Furthermore, a promising avenue for further research is the dynamic factor/principal components approach.