Browse by: "2016"

This paper surveys the state and evolution of GDP per capita in 281 regions of OECD countries for the time period 1995 – 2013. It puts a special focus on the disparities between the regions. These can be substantial: In 2013, GDP per capita of the least and most developed region varied by a factor of roughly ten. Using standard inequality measures like the coefficient of variation or the Gini coefficient, it is found that inequality has been decreasing between countries, while within-country disparities have often widened. Furthermore, transition matrices reveal that mobility within the distribution over time is higher in countries with larger degrees of fiscal decentralisation. This suggests that decentralisation allows regions to “take matters into their own hands”. Implications of other factors that correlate with the level of economic development are also discussed.

This paper investigates the relationship between fiscal decentralisation and economy-wide disposable income inequality. Drawing on a dataset of up to 20 OECD countries over a period from 1996 to 2011, a regression analysis is performed, relating several indicators of national income inequality and a wide array of fiscal decentralisation indicators. The results indicate a weak, inequality-reducing relationship between decentralisation and income inequality, as measured by the Gini coefficient, but the effect is rather small and unstable across specifications. Fine-graining the analysis by using income percentile ratios, in turn, produces more significant and stable results. It shows that the effects of fiscal decentralisation are not the same along the income distribution. While decentralisation tends to be associated with a reduction in income inequality between high incomes and the median, it is linked to a divergence of low income groups from the median, notably via sub-central tax autonomy. Transfers between levels of government also tend to increase the gap between lower and middle incomes. Interpreting these effects jointly, it seems that mainly middle income earners benefit from fiscal decentralisation. Finally, some insights on decentralisation and regional income inequality are presented. At first sight, fiscal decentralisation does not seem to be associated with income sorting in large jurisdictions, but a more fine-grained analysis is required to answer this question.

A country or firm's position in the value chain will largely depend on its comparative advantage, and therefore the mix of skills and resource endowments it brings to international production. For some, this might initially involve specialising in the labour intensive segments while others may specialise in the high-tech elements. In either case what matters is whether participation leads to growing economic activity. This paper discusses how countries can use foreign value added to enhance their domestic export performance. It shows that foreign sourcing is a complement to, rather than substitute for, the creation of domestic value added and employment in exports highlighting how, with GVCs, export competitiveness is inextricably linked to importing. The paper discusses how ASEAN countries can leverage different policies in order to make the most out of GVCs.

The global financial crisis and its high economic and social costs have revived academic and policy interest in “early warning indicators” of crises. This paper aims to investigate the performance of vulnerability indicators as advance warning indicators of past severe GDP per capita recessions in Turkey. It draws on the recently established database of vulnerability indicators (Röhn et al., 2015) and employs the signalling approach as in Hermansen and Röhn (2015) complemented by visual inspections to detect vulnerability indicators that performed particularly well in the Turkish context. The evidence suggests that an index of the global stock market performs extremely well in the Turkish context. This index, which could be interpreted as a proxy for the risk appetite of global investors, exceeded its critical threshold before almost all past severe GDP per capita recessions in Turkey while sending only very few false alarms. Among domestic indicators, large positive deviations of household credit and the domestic stock market from trend also perform relatively well in signalling subsequent past severe GDP per capita recessions. The evidence is broadly robust to considering a more homogenous set of lower income OECD countries when defining the critical thresholds.

This paper characterises the extent of GVC participation in selected countries of Latin America. It looks deeper into certain key trade policy-related aspects of Latin American trade integration with the potential to improve GVC participation. Latin America has a dense web of intra and extra-regional preferential trade agreements (PTAs). Nevertheless, the overlap, duplication and conflicts among the different rules and standards governing trade under these PTAs are likely reducing the benefits of these agreements. This is prompting renewed interest in the idea of linking or harmonising the various Latin American PTAs. To help inform this debate, this study analyses the impact of rules of origin (RoO) and non-tariff measures (NTMs) on GVC integration in the region, and examines relevant harmonisation initiatives.

This paper analyses proficiency in literacy and numeracy in the countries that have participated in the International Adult Literacy Survey (IALS, administered between 1994 and 1998), the Adult Literacy and Life Skills Survey (ALL, administered between 2003 and 2007) and the Survey of Adult Skills (PIAAC, administered in 2012). While many countries experienced small to modest changes in literacy proficiency between IALS and PIAAC, others saw sizeable variations, mostly on the negative side. In the shorter span that separated ALL and PIAAC, numeracy proficiency clearly declined (except in Italy), while literacy moved less on average (except for the large increase registered in Italy and the large decline experienced by Norway). Changes in the composition of the population have had little impact on observed changes in scores. Larger variations took place within different socio-demographic groups, but these tended to cancel each other out on aggregate. In particular, large variations are observed by age and levels of education. Older adults in PIAAC are generally more proficient than their IALS counterparts, probably due to the increase in educational attainments that took place over recent decades. On the contrary, tertiary-educated individuals appear to be on average less proficient than in the past, which may signal that the expansion of tertiary education has been accompanied by a decline in the average quality of university graduates (or of university instruction). There is also no evidence that the change in delivery mode, with a switch to a computer-based assessment in PIAAC, had any significant effect on performance. However, the OECD is unable to ascertain how differences in implementation and technical standards affect the comparability of the data, so that a certain degree of caution should always be exercised in interpreting these results. Amongst the countries that experienced larger changes in literacy proficiency between surveys, a close inspection of IALS data (in particular through an investigation of response patterns at the item level) highlights some anomalies in Italy and Poland (and, to a lesser extent, in England and Northern Ireland), suggesting that particular caution should be exercised in interpreting the evolution of proficiency in these countries.

We compute a distribution-adjusted welfare measure that aggregates outcomes in three dimensions of well-being, namely income, employment and longevity. Aggregation weights reflect preferences of people on these dimensions. The welfare measure is calculated for 26 OECD countries and selected emerging economies, and covers about three decades. Relying on a single theoretical model of a hypothetical representative agent, we combine life satisfaction regressions to capture the full welfare losses of unemployment with a calibration approach to capture the value of longevity. We test for robustness of results over a series of datasets and specifications and find that the resulting estimated shadow prices of (one percentage point of) unemployment and one year of longevity average 2% and 6% of income respectively. While we assume an identical utility function for all individuals, shadow prices of unemployment and longevity vary both across countries and within countries across income groups. We find that economic growth differs significantly from the growth of our welfare measure. The latter grew faster than GDP thanks to the gains that countries experienced on longevity, but was also more volatile due to changes in unemployment. Rising income inequality exerts a negative effect on our welfare measure. Gains in longevity have almost the same impact on welfare as income growth, while the long-term impact of employment was smaller.

Productivity growth has been sluggish since the Great Recession and had been slowing before it. This slowdown has touched nearly every industry. Although part the slowdown may be related to weakness of investment related to the slow recovery of aggregate demand, structural issues also appear to be playing a role, including persistent declines in business dynamism (market entry and exit of firms) and signs of diminishing competitive pressures. Historically, young productive firms have been an important source of productivity growth, but start-up rates have been slowing for some time and have been especially low in the aftermath of the crisis, and failure rates of new firms have risen. This diminished dynamism appears to be associated with other trends such as population ageing, funding difficulties, reforms in 2005 to the personal bankruptcy code that made debt discharge more difficult, intellectual property rights that favour some established companies, the spread of state-level occupational licensing requirements, as well as zoning and land use restrictions that inhibit resources from flowing to their most productive use. There are also signs that market power is gradually intensifying on balance, restraining competitive forces that would otherwise translate productivity gains into broad-based improvements in household purchasing power.

This review summarises existing studies evaluating the impact of apprenticeships on individuals and firms and provides a brief overview of relevant evaluations in three related policy areas: education; active labour market programmes; and private on-the-job training. Based on the reviewed literature, it draws a number of lessons that are relevant for evaluating apprenticeship programmes in OECD member countries, such as the Modern Apprenticeships in Scotland. First, rigorous evaluation depends on the existence of suitable, high-quality data. Second, the measured effects of apprenticeships depend on the time elapsed since the end of the training period. Third, the outcomes most commonly examined in the existing literature are wages and the probability of employment. Fourth, it is important to employ methods that take into account not only observed but also unobserved individual characteristics. Finally, comparing apprentices to different “control groups” might provide different and complementary evidence on the impact of apprenticeships.

Based on the OECD data from the Survey of Adult Skills (PIAAC) this paper sheds light on the skills of migrants. In line with earlier research the data show that migrants from Poland are more likely to have a tertiary degree than peers at home, but they often work in elementary professions abroad that do not match these high qualifications. This may well be at least partly a language issue, as migrants from Poland resemble migrants from other low-income countries in that their numeracy and literacy skills in the language of their host country is markedly lower than the average across all PIAAC participants, migrants or not. This gap is smaller, though, when looking only at migrants who report having been tested in a language that they use often and master well. The data reveal an interesting difference with migrants from higher-income countries, as their test results do not differ from the average, although they face the same language issues as other migrants. The reason may well be that only migrants from low-income countries can hope to earn higher wages abroad even if they work in low-skill professions, while migrants from higher-income countries need to master the language of their host country to do well. In fact, Polish migrants earn higher wages than their peers who stayed at home, even though they are particularly often overqualified.

Fiscal decentralisation can lead to a more efficient provision of local public goods and services and promote a better match between policies and citizens’ preferences. At the same time, however, there are concerns about whether all regions will gain from more autonomy. Decentralisation may not lift all boats, with “poor” regions losing competitiveness with respect to better endowed ones, thus increasing regional disparities. The present work investigates the relationship between fiscal decentralisation and regional inequality within countries. Particular attention is paid to the different channels through which decentralisation can affect disparities: taxing powers, spending autonomy and the vertical fiscal imbalance. The empirical analysis, which is conducted on a sample of 30 OECD countries for the period 1995-2011, suggests that a balanced fiscal structure, where local spending is mainly financed by local taxation, reduces regional disparities, by providing an incentive to better use local resources and implement policies that favour economic development.

Measures that enable the acquisition of new skills and reduce mismatches between the demand and supply of existing skills can boost US economic growth and make its benefits more inclusive. Although overall schooling performance has generally improved over time, many disadvantaged students still fail to achieve basic numeracy and literacy. Many parents are denied the opportunity to make their most productive contribution to the economy due to a lack of paid parental leave provisions, publicly-funded childcare and early-childhood education. Discrimination against individuals on the basis of race and gender or those with criminal records can also create barriers to opportunity. Some geographic areas of the country are performing very well, while others are being held back by governance structures that are ill-equipped to deal with economic, social, and environmental challenges. Getting the right policies and infrastructure in place in a timely manner can expand opportunity in these areas.

This policy brief on strategies and policies to scale the social impact of social enterprises was produced within a multiannual co-operation between the LEED programme of the OECD and the Directorate General Employment, Social Affairs and Inclusion of the European Commission. It begins by explaining what a social enterprise is and what scaling means in the context of social enterprises. It then compares the scaling patterns of social enterprises and conventional enterprises, looking at social impact vs. profit maximisation, the types of goods and services involved, and stakeholder relations. It goes on to examine specific strategies for scaling impact and also highlights the challenges and policy responses connected with this.

In 2015, PISA (the Programme for International Student Assessment) asked students to describe their well-being in addition to collecting information on students’ subject-specific skills. This paper provides a comprehensive overview and details the policy relevance of the following five dimensions of well-being covered in PISA 2015: cognitive, psychological, social, physical and material well-being. In addition, the paper outlines the underlying indicators of each dimension and their theoretical and analytical value for education policy. This paper concludes by identifying data gaps within the indicators and exploring how future cycles of PISA could bridge these gaps in order to provide a more comprehensive portrait of students’ well-being.

This paper examines the contribution of high-quality teacher professional development (TPD) to the strategies teachers report using to improve students’ learning in the classroom. What was taught in this TPD, and how it was delivered to teachers is compared across the 35 educational systems with available data in TALIS 2013. Results suggest that teachers who take part in curriculum-focused TPD are more likely to report using a variety of the instructional methods considered in this study. Furthermore, TPD delivered with greater levels of teacher collaboration, active learning and longer duration also increases, in many countries and economies, the likelihood of teachers reporting using a large number of these strategies. In contrast, teachers’ exposure to TPD involving other teachers from the school (i.e. with collective participation) seems to be specifically detrimental for active teaching methods. The paper discusses the prevalence of these features, national gaps in their exposure and policy implications derived from these findings.

France
General legislation, regulations and instruments
Nuclear trade (including non-proliferation)
International co-operation

India
Licensing and regulatory infrastructure
Liability and compensation

Ireland
Nuclear safety and radiological protection (including nuclear emergency planning)
Transport of radioactive material
Nuclear trade (including non-proliferation)

Lithuania
Licensing and regulatory infrastructure
Nuclear safety and radiological protection (including nuclear emergency planning)
Radioactive waste management

Luxembourg
Nuclear safety and radiological protection (including nuclear emergency planning)

Slovak Republic
International co-operation
General legislation, regulations and instruments

Spain
Radioactive materials (including physical protection)
Radioactive waste management

United States
Licensing and regulatory infrastructure