CEPR News In focus this week: 23 October 23 Nov 2023 This weekly press briefing highlights some of the latest research reports, discussion papers and other publications from CEPR. It also features some of the latest columns on VoxEU, as well as new blogs/reviews, audio interviews and short films.
LABOUR MARKET RESILIENCE KEY TO MODEST GROWTH REBOUND IN EUROPE Writing at VoxEU, Maarten Verwey, Áron Kiss, Cristina Tinti and Kristine Van Herck present the key factors that underpin the Autumn 2023 Forecast and discusses the drivers of the continued labour market tightness in the EU, despite the economic slowdown: - The European economy has lost momentum this year against the background of high costs of living, weak external demand and monetary tightening. - A modest rebound in growth is expected going forward. - The resilience of the labour market is the main force behind the growth outlook.
35% REDUCTION IN WOMEN'S INCOME AFTER BECOMING MOTHERS: Evidence from Latin America A study by Inés Berniell, María Edo and Mariana Marchionni examines gender disparities in the labour market within the Latin American context, uncovering a substantial 35% reduction in women's income after becoming mothers. The findings underscore how the negative impact of motherhood contributes significantly to the persistent income inequality between men and women in the region.
TACKLING GENDER GAPS IN THE ITALIAN LABOUR MARKET: Evidence and policy implications Italy has one of the lowest female labour force participation rates in the EU and the lowest employment rate. Writnig at VoxEU, Francesca Carta, Marta De Philippis, Lucia Rizzica and Eliana Viviano identify three primary areas where gender gaps are most pronounced and warrant policy interventions: - Gender gaps in earnings are already large just one year after individuals complete their education, with women choosing lower-paying university majors than men. - Gender gaps widen when women have children, and women are severely under-represented in top professional positions. - Policy interventions include combating cultural barriers and stereotypes, increasing the supply of childcare facilities for young children, and reinforcing women’s presence in middle management, including through quotas.
LOW-COST SOLUTIONS FOR SIGNIFICANTLY REDUCING RESIDENTIAL EMISSIONS WORLDWIDE A stuy by Maxim Chupilkin, Zsoka Koczan and Ireko Zamilov combines data from a household survey administered across a large sample of emerging markets with cross-country data on residential emissions, to show how relatively low-cost, technologically straightforward improvements, such as installing (smart) meters and double-glazed windows, can help significantly reduce residential emissions, even taking the existing housing stock as given.
GREEN ECONOMY TRANSITION COULD BE HINDERED BY CHINA'S DOMINANCE OF RAW MATERIAL PRODUCTION A successful transition to a green economy depends crucially on the availability of various critical raw materials. Currently, China dominates the production and processing of many of these materials, and most of the reserves are in countries that are not politically aligned with the Western economies. Writing at VoxEU, Beata Javorcik, Lucas Kitzmüller, Sushil Mathew, Helena Schweiger and Xuanyi Wang discusses the current situation and potential policy solutions.
THE GLOBAL AI REGULATION RACE: Why the EU should focus on data quality and liability rules At a recent global summit on AI safety, US Vice-President Kamala Harris claimed “[i]t is America that can catalyse global action and build global consensus in a way no other country can”. Writing at VoxEU, Martin Kretschmer, Tobias Kretschmer, Alexander Peukert and Christian Peukert argues that it is the EU that is most advanced in adopting comprehensive and detailed legislation, with its ambitious AI Act. The proposed Act offers a blueprint for a risk-based approach that seeks to prevent harmful outcomes ex ante. The authors suggest that rather than requiring detailed risk declarations, enlightened (ex post) liability rules can offer space for open source innovation and incentivise investment in high-quality model inputs.
ATTITUDES AND LABOUR MARKETS IN THE GREEN TRANSITION: Evidence from emerging Europe Despite widespread awareness of climate change, individuals may not be willing to accept higher taxes or sacrifice economic growth and jobs for environmental priorities. A study by Cagatay Bircan, Lucas Kitzmüller, Sehar Noor and Niharika Satish delves into attitudes and labour markets in the green transition, particularly in emerging Europe, highlighting the slow adaptation despite growing demand for green skills. Maintaining public support for climate action necessitates ensuring a fair transition process and addressing economic concerns among vulnerable groups.
GLOBALISATION AND SERVITISATION OF FIRMS DRIVE ENTRY INTO CROSS-BORDER DATA TRANSFERS: Evidence from Japan Using a survey of Japanese firms 2019-2021 to examine the dynamics of corporate activities related to cross-border data flows, a study by Banri Ito and Eiichi Tomiura finds a significant increase in cross-border data collection activities, led by high-productivity firms. In addition to productivity and firm size, globalisation and servitisation are especially useful for explaining firms’ entry into overseas data collection activities.
THE ORIGINS OF MONETARY POLICY DISAGREEMENT: The role of supply and demand shocks A study by Carlos Madeira, João Madeira and Paulo Santos Monteiro investigates how differences in the nature of economic shocks and central bank objectives affect disagreement over the conduct of monetary policy: - Supply shocks increase the likelihood of disagreement over monetary policy decisions in central bank committees with a dual mandate. - Demand shocks are associated with less disagreement. This effect is present in US monetary policy committee votes since 1957, but absent in central banks with a single mandate, such as the Bank of England.
DISTRIBUTIONAL CONSEQUENCES OF TECHNOLOGY SHOCKS THROUGH LABOUR REALLOCATION The role of worker and job reallocation in an economy’s response to shocks and their impact on inequality is crucial, but less attention was paid to occupational reallocation. Ester Faia and Ekaterina Shabalina explore how occupational reallocation impacts job flows and wage disparities amidst technological and economic shifts using data from 1989 to 2019. The findings show a pronounced effect on bottom earners and routine jobs, with technology-driven economic booms reducing wage inequality and recessions exacerbating inequality. These insights suggest the need for targeted fiscal policies to mitigate the adverse effects of these economic cycles on wage inequality.
VIOLENCE AGAINST WOMEN IN POLITICS In today’s polarised atmosphere, violent attacks on politicians are not unusual, and women are more likely to be the victims. Are they victimised because they choose different policies, or just because of their gender? Gianmarco Daniele has investigated violence against women in Italian politics, and he talks to Tim Phillips about his disturbing findings.