Browse by: "2014"

In most OECD countries, the gap between rich and poor is at its highest level since 30 years. Today, the richest 10 per cent of the population in the OECD area earn 9.5 times the income of the poorest 10 per cent; in the 1980s this ratio stood at 7:1 and has been rising continuously ever since. However, the rise in overall income inequality is not (only) about surging top income shares: often, incomes at the bottom grew much slower during the prosperous years and fell during downturns, putting relative (and in some countries, absolute) income poverty on the radar of policy concerns. This paper explores whether such developments may have an impact on economic performance.

Drawing on harmonised data covering the OECD countries over the past 30 years, the econometric analysis suggests that income inequality has a negative and statistically significant impact on subsequent growth. In particular, what matters most is the gap between low income households and the rest of the population. In contrast, no evidence is found that those with high incomes pulling away from the rest of the population harms growth. The paper also evaluates the “human capital accumulation theory” finding evidence for human capital as a channel through which inequality may affect growth. Analysis based on micro data from the Adult Skills Survey (PIAAC) shows that increased income disparities depress skills development among individuals with poorer parental education background, both in terms of the quantity of education attained (e.g. years of schooling), and in terms of its quality (i.e. skill proficiency). Educational outcomes of individuals from richer backgrounds, however, are not affected by inequality.

It follows that policies to reduce income inequalities should not only be pursued to improve social outcomes but also to sustain long-term growth. Redistribution policies via taxes and transfers are a key tool to ensure the benefits of growth are more broadly distributed and the results suggest they need not be expected to undermine growth. But it is also important to promote equality of opportunity in access to and quality of education. This implies a focus on families with children and youths – as this is when decisions about human capital accumulation are made -- promoting employment for disadvantaged groups through active labour market policies, childcare supports and in-work benefits.

Many studies on household energy efficiency investments suggest that a wide range of seemingly profitable investments are not taken up. This paper provides novel evidence on the main factors behind consumer choices using the OECD Survey on Household Environmental Behaviour and Attitudes. The empirical analysis is based on the estimation of binary logit regression models. Empirical results suggest that households’ propensity to invest in clean energy technologies depends mainly on home ownership, income, social context and households’ information. Indeed, home owners and high-income households are more likely to invest than renters and low-income households. On the other hand, social context, such as membership in an environmental non-governmental organisation, and households’ knowledge about their energy spending and use may play a relevant role in technology adoption.

This report assesses conceptually and empirically the extent to which the stringency of environmental regulations drives international trade in environmental goods. Many of the measures governments adopt to address issues such as local air and water pollution or GHG emissions take the form of regulations that aim to change the behaviour of firms or households. Compliance by private actors with those regulations in turn generates a growing market for environmental goods and services that is increasingly international in scope as more countries tighten their environmental regulations. Regulatory stringency thus spurs the development of a market for a whole range of equipment specifically meant for preventing and abating pollution, with important implications for international trade in such equipment. The different indicators of regulatory stringency considered in the present analysis generally support the notion that the stringency of environmental regulations positively affects countries’ specialisation in environmental products, even when considering specific sectors such as solid-waste management or wastewater treatment. While increased trade in environmental products is not an end in itself, the environmental benefits this entails can contribute to global improvements in environmental quality. By increasing demand for environmental products and technologies, environmental policy can complement trade policy in supporting pollution-reduction efforts not just domestically, but also abroad.

Cross-country analysis of the economic effects of environmental policies is limited by the lack of reliable, comparable measures of the stringency of environmental policies. This paper attempts to fill this gap, by constructing new quantitative indexes of environmental policy stringency (EPS). Selected environmental policy instruments, primarily related to climate and air pollution, are scored and aggregated into composite EPS indexes. Two EPS indexes are proposed – one for the energy sector, and an extended one to proxy for the broader economy (“economy-wide”). They cover most OECD countries over 1990s-2012. While a simplification of the multidimensional reality of environmental policies, the EPS indicators are a first tangible effort to measure environmental policy stringency internationally over a relatively long time horizon. They show relatively high and significant correlations with alternative proxies of EPS used in the literature, such as measures of perceived stringency based on surveys, measures based on environmental outcomes and a composite policy-based measure with no time series. The paper describes some additional features of the EPS indicators and sketches out possible future extensions.

This paper investigates the impact of changes in the stringency of environmental policies on productivity growth in OECD countries. Using a new environmental policy stringency (EPS) index, it estimates a reduced-form model of multi-factor productivity growth, where the effect of countries' environmental policies varies with pollution intensity of the industry and technological advancement. A multi-layer analysis provides insights at the aggregate economy, the industry and the firm level. At the aggregate economy level, a negative effect on productivity growth is found one year ahead of the policy change. This negative “announcement effect” is offset within three years after the implementation. At the industry level, a tightening of environmental policy is associated with a short-term increase in industry-level productivity growth, for the most technologically advanced country-industry pairs. This effect diminishes with the distance to the global productivity frontier, becoming insignificant at larger distances. At the firm level, only the technologically most advanced firms show a positive effect on productivity growth from a tightening of environmental policies, while a third of firms, the less productive ones, experience a productivity slowdown.

Environmental policies seek to address market failures related to the protection of the environment. However, they may also increase barriers to entry and distort competition. If stringent environmental policies can be designed in a way that minimises such economic burdens, they can facilitate the achievement of economic and environmental goals and a cleaner growth model. This paper reports evidence on selected competition-relevant aspects of environmental policy design from a cross-country questionnaire. Information on administrative burdens related to environmental licenses, differential treatment among incumbents and new entrants and the procedures to evaluate economic effects of environmental policies are summarised in a set of indicators of the Burden on the Economy due to Environmental Policies (BEEP). The indicators allow for a set of tentative conclusions. Firstly, the BEEP captures information on anti-competitive regulations absent from the OECD’s product market regulation indicators (PMR). Secondly, though it is not yet possible to evaluate the economic impact of anti-competitive aspects of environmental policies, it is likely they impact well beyond the sectors directly concerned, hampering productivity growth, as shown for other product market regulations. Finally, the burdens of environmental policies are not related to their actual stringency, indicating that ambitious environmental targets can be pursued in ways that are more (or less) friendly to competition.

Environmental policies address wellbeing and sustainability objectives, affecting firm and household behaviour. A newly developed, cross-country composite proxy of environmental policy stringency (EPS) shows that stringency has been increasing across OECD countries over the past two decades. However, the tightening environmental policies have had little effect on aggregate productivity, spurring primarily short-term adjustments. Nevertheless, they have led to various effects within the economy - the most technologically advanced industries and firms have seen a small increase in productivity, possibly being in the best position to adapt. Least productive firms have seen their productivity fall. Part of the effect is likely to have taken place through entry and exit of firms and relocation of activities. Finally, this project provides evidence on the anti-competitive bias of some aspects of environmental policies. The indicator of Burdens on the Economy due to Environmental Policies (BEEP) shows that barriers to entry and competition, and the consideration given to economic effects of environmental policies vary notably across countries, but that this variation is not related to the stringency of policies. Hence, to support both economic and environmental outcomes, stringent environmental policies can and should be implemented with minimum barriers to entry and competition.

This paper explores methodological approaches that can be used to monitor and evaluate climate change adaptation initiatives at the projects and programme levels. It examines approaches that have been used in other areas of development practice to see what lessons have been learned that can inform the development of monitoring and evaluation frameworks targeted at adaptation. The paper focuses on three methodological challenges related to monitoring and evaluation that are particularly relevant for adaptation: i) assessing attribution, ii) establishing baselines and targets, and iii) dealing with long time horizons. The paper also considers the importance of on-going learning in evaluation and the benefit of applying a comprehensive approach to monitoring and evaluation, building on tested practices from participatory methods and social sciences techniques.

Austerity has become a widely used term in economic research and popular media as many countries have recently implemented deficit reduction policies. This article begins by exploring definitions of austerity used in research and the ways these different definitions impact analysis of policy effects. The article then takes into account a number of factors that can affect the outcome of these so-called austerity measures, including economic conditions, time period, and parties impacted by the policies. Without a clear definition of austerity and the contexts under which it is implemented, a conclusive analysis of austerity’s effects cannot be conducted. This article concludes that the term “austerity” will remain a confusing term that can breed misunderstanding, social uprisings, political unrest, and ill-prescribed solutions to economic problems.

JEL classification: H10, H12, H41, H60
Keywords: Austerity, spending cuts, deficits, tax increases, recession

• Le rapport New Insights from TALIS 2013: Teaching and Learning in Primary and Upper Secondary Education (Nouveaux éclairages de TALIS 2013 : Enseigner et apprendre dans le primaire et le deuxième cycle du secondaire [OCDE, 2014a]) offre une vue d’ensemble des enseignants et de l’enseignement dans le primaire et le deuxième cycle du secondaire pour une sélection de pays ayant participé en 2013 à l’Enquête internationale sur l’enseignement et l’apprentissage (TALIS) de l’OCDE.
• Les femmes représentent la majorité du corps enseignant dans la plupart des pays, et ce à tous les niveaux d’enseignement. Malgré ce constat et le fait que la plupart des chefs d’établissement soient d’anciens enseignants, les femmes sont nettement moins nombreuses parmi les chefs d’établissement, quel que soit le niveau d’enseignement.
• Les enseignants du primaire travaillent en général dans des établissements où les chefs d’établissement font plus souvent état, par comparaison avec le deuxième cycle du secondaire, d’un manque de matériel et/ou de personnel pouvant diminuer la capacité de leur établissement à offrir un enseignement de qualité. En outre, dans de nombreux pays, les établissements présentant un fort pourcentage d’élèves défavorisés sur le plan socio-économique font face à des pénuries de ressources clés plus importantes, ce qui vient s’ajouter au contexte déjà difficile dans lequel s’inscrivent les élèves et les enseignants de ces établissements.

This paper presents long-term trade scenarios for the world economy up to 2060 based on a modelling approach that combines aggregate growth projections for the world with a detailed computable general equilibrium sectoral trade model. The analysis suggests that over the next 50 years, the geographical centre of trade will continue to shift from OECD to non-OECD regions reflecting faster growth in non-OECD countries. The relative importance of different regions in specific export markets is set to change markedly over the next half century with emerging economies gaining export shares in manufacturing and services. Trade liberalisation, including gradual removal of tariffs, regulatory barriers in services and agricultural support, as well as a reduction in transaction costs on goods, could increase global trade and GDP over the next 50 years. Specific scenarios of regional liberalisation among a core group of OECD countries or partial multilateral liberalisation could, respectively, raise trade by 4% and 15% and GDP by 0.6% and 2.8% by 2060 relative to the status quo. Finally, the model highlights that investment in education has an influence on trade and high-skill specialisation patterns over the coming decades. Slower educational upgrading in key emerging economies than expected in the baseline scenario could reduce world exports by 2% by 2060. Lower up-skilling in emerging economies would also slow-down the restructuring towards higher value-added activities in these emerging economies.

While past labour market reforms have been successful in terms of employment, the relative poverty risk and income inequality have remained broadly unchanged in recent years. Some social groups remain particularly vulnerable, including individuals in non-regular employment, the unemployed and the low skilled. If in employment, their jobs tend to be unstable and wages and income mobility low. Continued efforts are needed to foster economic growth in a more inclusive manner, such that the most vulnerable groups benefit from and contribute to economic growth more strongly and such that the gaps between the rich and the poor in terms of income and wellbeing are reduced. These efforts should include enhancing the labour market outcomes of the most vulnerable and increase upward income mobility among disadvantaged individuals; strengthening skills at the lower end of the skills distribution; revising the tax and benefit system to improve incentives and to ensure efficient and well-targeted redistribution; and to make health and old-age pension insurance more inclusive. This working paper relates to the 2014 OECD Economic Survey of Germany (http://www.oecd.org/eco/surveys/economic-survey-germany.htm).

This report assesses quantitatively the competition, scarcity and connectivity impacts of different airline responses to expanding runway capacity at Gatwick or Heathrow.

• L’augmentation du nombre de diplômés de l’enseignement tertiaire ne semble pas avoir entraîné de phénomène d’« inflation » susceptible d’éroder la valeur de ce diplôme sur le marché du travail. Toutefois, les diplômés de l’enseignement tertiaire bénéficient de l’avantage le plus élevé en termes de revenus du travail relatifs lorsqu’ils vivent dans un pays où les diplômés de ce niveau d’enseignement sont peu nombreux.
• En moyenne, par comparaison avec les revenus du travail des adultes diplômés du deuxième cycle du secondaire, les adultes diplômés de l’enseignement tertiaire gagnent environ 1.6 fois plus, tandis que les adultes dont le niveau de formation est inférieur au deuxième cycle du secondaire gagnent 24 % de moins.
• L’élévation du niveau de formation et du niveau de compétence en littératie entraîne une augmentation des revenus ; toutefois, cet avantage est plus marqué pour les hommes que pour les femmes, et semble s’accroître avec l’âge.
• La crise a creusé les écarts de revenus entre les moins instruits et les plus instruits : dans les pays de l’OCDE, la différence moyenne de revenus du travail entre ces deux groupes est passée de 75 points de pourcentage en 2008 à 79 points de pourcentage en 2012.
• Les diplômes sont plus reconnus que les compétences : l’élévation du niveau de formation a un impact positif plus fort sur les revenus du travail que l’élévation du niveau de compétence en littératie.

• The report New insights from TALIS 2013: Teaching and learning in primary and upper secondary education (OECD, 2014a) presents an overview of teachers and teaching in primary and upper secondary education for a sample of countries that participated in the OECD Teaching and Learning International Survey (TALIS) in 2013.
• Women represent the majority of the teaching workforce for most countries at all levels of education. Despite this and the fact that most principals are former teachers, significantly fewer principals are women at all education levels.
• Primary teachers tend to work in schools where principals report material and personnel shortages that hinder the delivery of quality education more often than upper secondary teachers. Moreover, schools with high proportion of socio-economically disadvantaged students face greater shortages in terms of key resources in many countries. This further exacerbates the already-challenging circumstances for teachers and students.

International trade has grown rapidly in the post-war era with trade volume growing twenty-seven fold between 1950 and 2007, three times faster than world GDP growth (WTO, 2007). Growth in trade is expected to outpace the GDP growth also over the next 50 years, according to recent OECD projections. The value of international trade is estimated to grow by a factor of four by 2050 in real terms (Fontagné et al., 2014). Trade patterns will however change due to fragmentation of production processes and integration of emerging markets into global markets. Trade liberalisation, either at global or regional level, will also have an impact on global patterns.

This document explores the key elements of bilateral air service agreements (ASAs) and recent trends towards increasing liberalisation and examines linkages between ASAs and cross border airline alliance. It discusses issues related to antitrust reviews of proposed alliances and summarises and comments on the impacts of international airline alliances.

In France, the obligation to conduct an ex-post assessment is relatively recent (1982) but it has in fact revealed some methodological problems that flow from the retrospective nature of the exercise. This report shows that some of those difficulties can be overcome through the establishment of permanent observatories. It presents examples of such observatories, with a particular focus on motorway (“autoroute”, or “freeway” in North American usage) investments. A particular case is then investigated, concerning the socioeconomic observatory on the effects of the Sud-Europe-Atlantique [South-Europe-Atlantic] high-speed train line that is now under construction. This major project (€7.8 billion) has been let under a concession. The concession contract calls for the establishment of an observatory that also covers the construction period and is to remain in operation for 10 years after the line comes into service, or until 2027. Besides an overall presentation of the mechanism, the report deals in particular with the metrological precautions that must be taken in order to monitor the multimodal offer of transport for the areas concerned. One of the key issues here, in fact, is to explain the discrepancies between forecast and projected and actual traffic, an explanation that may be more complete than in the ex-post evaluation procedure.

Public-private partnerships (P3s) typically rely on long-term contracts between participants. When conditions arise that fall outside the expectations embodied in the contract, one party may seek to renegotiate the contract terms. Globally, the frequency of P3 contract renegotiations has been sufficient to raise questions regarding why these events occur and what their consequences are for the projects and society. The literature highlights four relevant causes behind renegotiation occurrences: unexpected exogenous changes, the complexity of the contractual relationship, winner´s curse and rent seeking behavior. This study examines the US experience with highway P3 renegotiations, including four types of event: contract modifications, defaults, bankruptcies and buyouts. While the US highway P3 market has grown gradually, failure to understand renegotiations and their potential consequences may dampen the market and adversely affect national infrastructure investment efforts. The analysis finds that insufficient evidence exists to disentangle the drivers of renegotiation in the US, although exogenous changes and contractual relationship complexity appear to be paramount. The analysis highlights the distinct political and institutional environment that shapes highway P3 renegotiations in the US, suggesting the need for continuing and sensible analysis to effectively manage the undesirable consequences of renegotiations.