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This paper measures the effective taxation of housing investments in 40 OECD member and partner countries. The paper derives both Marginal Effective Tax Rates (METRs) and Average Effective Tax Rates (AETRs), which incorporate the stream of income and taxes over the life of the housing investment. The methodology is applied to owner-occupied and rented residential property for investments that are financed with debt or equity. The paper finds that the level and components of housing taxation depend greatly on the investment scenario. Effective tax rates vary substantially depending on the holding period, rate of return, tenure (owner-occupied or rented), financing scenario, and the inflation rate. Effective tax rates do not vary much with the taxpayer’s income and wealth or with the rate of return. The paper finds there is scope to reduce the tax differential between different investment scenarios and strengthen progressivity and horizontal equity.
As data have become a social and economic resource, including for value creation, decision-making, innovation and production, policy makers are facing a number of challenges. Among the most important issues – but also one that is particularly complex – is how to measure the economic value of data to provide a solid evidence base for policymaking. This Going Digital Toolkit note brings clarity about what is meant by the term “data” in the context of efforts to conceptualise and measure the value of data from a statistical perspective. The note also highlights why estimating the value of data is increasingly important, identifies the conceptual and practical measurement challenges faced, and catalogues various innovative initiatives underway across countries in the context of the forthcoming revision of the System of National Accounts and beyond.
Data portability has become an essential tool for enhancing access to and sharing of data across digital services and platforms. This report explores to what extent data portability can empower users (natural and legal persons) to play a more active role in the re-use of their data across digital services and platforms. It also examines how data portability can help increase interoperability and data flows and thus enhance competition and innovation by reducing switching costs and lock-in effects.
This paper reviews the literature on the distributional effects of environmental and climate policies, focusing on ex-post empirical evidence. It decomposes the distributional effects into the main dimensions to understand which policy packages are more likely to achieve a triple dividend of environmental effectiveness, economic efficiency and equity. This paper also takes stock of the related literature on the political acceptability of environmental policies to assess proposals of compensation policy packages, including green recovery plans, environmental tax reforms and progressive subsidies to green technologies.
The landscapes of housing loan markets vary considerably across OECD countries, reflecting differences in preferences and policy settings. This paper first draws a topography of disparities in mortgage structure, documenting considerable variation across OECD countries in key features such as in use of fixed vs variable interest rates and typical maturities. The paper then discusses policies that can influence these outcomes. It highlights the scope for encouraging inclusive access to housing through tax-and-spending programmes that are neutral between renting and owning rather than through often very costly tax advantages for mortgage borrowing. The paper finally proposes a novel indicator to measure the balance between the rights of borrowers and lenders. Mortgage markets are deepest in countries where the index shows that creditor and borrower rights are balanced rather than severely tilted to one side.
Motorway crashes kill over 200 people in Korea each year. This report reviews international best practices in motorway safety across ten countries to inform ways to make Korea’s motorways safer. Matching the average safety performance observed across Germany, Japan, the Netherlands and the United Kingdom would halve the number of motorway deaths. The report offers recommendations for an action plan to 2030, also taking into account the expected uptake of connected and automated vehicles.
Making trade work for all and harnessing popular support for openness to trade depends on consumers benefitting from lower prices and broader product variety. The present study reveals that those benefits depend on competition in services markets, in particular in telecommunication. These findings result from employing an industrial organisation framework to estimate the transmission of prices from the world market to consumers of certain services in local markets (distribution, transport, and financial services). The OECD Services Trade Restrictiveness Index (OECD STRI) is used to explore the relationship between the pass-through rate of input prices to consumer prices and policy measures that capture the openness and strength of competition in services markets. The OECD STRI in telecommunications is found to be associated with a more complete and faster pass-through of prices in all markets studied. The results also illustrate the crucial role played by the internet in allowing for price comparisons that generate competitive pressure on distributors.
Inter-regional migration – the movements of the population from one region to another within the same country – can be an important mechanism of spatial economic adjustment, affecting regional demographic and growth patterns. This paper examines the economic and housing-related factors that affect the decision of people to migrate to another region within the same country, drawing empirical evidence from country-specific gravity models of inter-regional migration for 14 OECD countries. The results suggest that inter-regional migrants move in search of higher income and better employment opportunities, but are discouraged by high housing costs. In particular, house prices are found to be an important barrier to migration, especially in countries having experienced strong increases in the level and cross-regional dispersion of house prices. There is however large heterogeneity across countries in terms of what factors matter the most and in terms of the magnitude of the migration response.
This paper explores the conceptual framing and measurement of transboundary impacts in the context of the 2030 Agenda. It starts by defining transboundary impacts and reviewing different measurement approaches used so far. It then proposes a typology of transboundary impacts, classified depending on the type of international flows involved: financial flows, trade flows, movements of people, environmental flows and knowledge transfers. For each of these flows, transboundary impacts can be either positive or negative, depending on the aspect considered and on the conditions in origin and destination countries. Based on this framework, the paper presents evidence from a qualitative survey of experts about the potential impact of these five flows on each of the 17 Goals and 169 targets of the 2030 Agenda. Transboundary impacts are deemed by experts to be quite pervasive across SDGs, but also limited in scope to a small number of well-identified targets. Finally, the framework is operationalised for some specific areas within each of the five types of flows mentioned above, with the help of some proxy indicators. At the global level, the five types of transboundary relationships are dominated by three macro-regions, namely China, the United States-Canada and Europe, mainly reflecting the large size of these regions in most cases. When the assessment is conducted in relative terms (i.e. when impacts are normalised by population size or GDP), the picture becomes more nuanced, as 7 out of the 11 world regions considered record at least two large transboundary impacts. While this operationalisation is only meant to show how the proposed framework could be applied to concrete cases, the paper recommends its applications to other areas within each of the five flows, based on a richer set of indicators.
Body-mass index (BMI) tends to follow a typical trajectory over the life-course of an individual, increasing in early life while decreasing after middle age. To be able to reflect these trends in the OECD Strategic Public Health Planning for Non-Communicable Diseases (SPHeP-NCDs) model, this paper analyses longitudinal BMI data from 22 countries to build a mixed, autoregressive model predicting an individual’s BMI based on their sex, age and previous BMI. The resulting model shows how young people are likely to see an increase in BMI year-on-year, even if they already have overweight or obesity. It also shows that that a healthy weight in childhood does not protect against future overweight, as BMI continues to increase well into adulthood even for children who start off with a healthy weight. The results of this analysis will be incorporated in the OECD SPHeP NCDs model, to better simulate the longer-term impact of interventions, in particular interventions targeting childhood obesity.
One of the key objectives of Extended Producer Responsibility (EPR) is to instigate design for the environment. In collective EPR schemes, the fee schedule set by Producer Responsibility Organisations (PROs) is typically quite simple and provides weak incentives for design change by producers. Fee modulation, changing fees paid by producers in a collective EPR scheme based on product design, can provide producers with stronger design incentives, but adds complexity to the system. The paper defines a classification for fee modulation (by criteria and methodology) and discusses potential challenges and opportunities. It concludes with key policy insights that can further stimulate this emerging policy approach.
Digital transformation has become a prevalent part of our lives, changing the way we consume, produce and trade, and this trend has only accelerated since the COVID-19 crisis. Still, digital transformation remains largely hidden in official trade statistics. From a statistical perspective, a fundamental rethink is required in the way that core national accounts are constructed if meaningful measures of digital trade are to be developed. This Going Digital Toolkit note highlights the main features of the OECD-IMF-WTO conceptual framework defining digital trade, as well as practical guidance to overcome some of the measurement challenges. It also catalogues various country initiatives to estimate digital trade.
This paper develops a methodology for the estimation of Energy Physical Supply and Use Tables (E-PSUTs) based on the IEA’s World Energy Balances (WEB). The tables are similar to those proposed by the United Nations System of Environmental Economic Accounting. However, they fully exploit, and are consistent, with the information on fuel transformation processes available in the WEB.
The E-PSUTs can be used to derive energy indicators in physical units. Additionally, they can be used in a hybrid methodological approach to link global energy production and consumption in physical units with global production and consumption in monetary units, allowing the development of indicators to better understand the multiple links between energy and the economy, contributing to climate change discussions.
Furthermore, complementary analyses can be undertaken by linking the MF-IO model with variables such as industry value added and employment data. And, used to estimate energy-related CO2 emissions indicators.
The sanitary crisis, created by the outbreak COVID-19, is accelerating Chile’s digital transformation, which has seen a surge in e-learning, streaming, online shopping and marketing and teleworking. The digital transformation has the potential to revamp productivity and inclusiveness, although it comes with adoption barriers and transition costs. Connectivity has increased substantially in the last decades, and the country is ahead of the region. However, fixed high-speed broadband adoption, essential for the digital transformation, lags behind. Firms have started to adopt digital technologies but micro firms and SMEs are well behind. Rural areas have lower connectivity and many workers lack the skills to thrive in the digital world. Lowering the entry barriers in the communication sector and making regulations simpler and clearer would ease infrastructure deployment. Targeted policies for SMEs, such as development of sources of financing or specific programmes for adopting digital tools, would help them access and use digital tools, increasing productivity. Reforms to the innovation ecosystem, competition and the regulatory framework are also needed. To reap the benefits of digitalisation for all, it is necessary to continue investing in quality foundational skills, adult and lifelong learning and in high-skilled ICT specialists. Labour market policies need to be adapted to face the challenges and exploit the benefits posed by the digital transformation. An effective safety net would address possible labour market disruptions.
Intangible assets are an important driver of productivity and ultimately output growth. Yet, despite their aggregate rise in the past decades, productivity has continued to grow modestly in the majority of OECD countries. This is in part because many firms – particularly young and small ones - are often held back from building up intangible assets, as financing their production or acquisition is more difficult than for tangibles. Building on the analytical framework recently developed by the OECD (Demmou, Stefanescu and Arquié, 2019; Demmou, Franco and Stefanescu, 2019) and extending the empirical analysis, the paper provides evidence that easing financing restrictions is particularly beneficial for productivity in sectors that rely more intensively on intangible assets, indirectly pointing to the existence of a “financing gap” due to financial frictions. This aggregate productivity impact reflects both increases in the productivity of each firm and better allocation of labour across firms. Recognizing cross-country differences in the structure of financial systems, the policy discussion focuses on how to make the three main sources of external finance available to firms -- bank lending, equity financing, and direct government support -- more suited to fit the needs of an intangible-based economy. Finally, the paper briefly discusses the extent to which the COVID-19 crisis may have created specific challenges for intangible investment, making policy interventions in these areas more relevant and urgent.
Micro-credentials are receiving growing interest from learners, education providers and governments as a means of upskilling and reskilling, academic advancement and personal development. This paper offers new empirical evidence on the current offer of micro-credentials across OECD jurisdictions, and provides an account of what is known about the costs and benefits of short learning programmes offered by higher education institutions.
Six years after the private sector has been called upon to help deliver the Sustainable Development Goals (SDGs), the financing gap remains tremendously high and mobilisation figures – how much development actors mobilise from the private sector – remain stubbornly low. Mobilising commercial investment at the portfolio level can be an effective way to match the needs of small scale borrowers in developing countries, and channel the large amounts of capital held by institutional investors towards their sustainable development. Risk transfer mechanisms (RTM) can be one effective way to intermediate between recipient and provider.
This paper provides new evidence on the role of intangible capital in global value chains (GVCs) by focusing on the role of multinational enterprises (MNEs) and their foreign affiliates in value capture through intangible assets. Industry-level data suggest that foreign affiliates of MNEs generate more income through intangible capital than domestic-owned firms. Intangible returns from foreign affiliates are found both in the host economy and in foreign-owned firms in other countries participating in the GVC. Some heterogeneity is observed across GVCs with returns to intangible capital of foreign-owned firms concentrated in key manufacturing (chemicals including pharmaceuticals, food products, ICT and electronics, and motor vehicles) and services GVCs (finance and insurance, other business services, wholesale and retail, and telecoms). Five case studies (Adidas, AstraZeneca, Rocket Internet, Starbucks and Tata Consultancy Services) complement the analysis by looking at the role of intangible capital in the GVC of specific MNEs.
Many countries have considered extending their school days to improve students’ outcomes, promote equity or support parents to combine work and family lives. Given the impact of such reforms, identifying conditions for their successful implementation is an important concern. This working paper reviews the available evidence and synthesises common lessons from six European and Latin American countries that extended and reorganised their school days. Each case study describes the reform’s context and goals, design and implementation, and resource implications. The paper highlights that lengthening the school day might be an efficient strategy for some schools and systems, but not for others, depending on policy goals and alternatives. To reap any potential benefits, reforms need to consider the quality and articulation of the activities taking place and related adjustments to school resources. As the paper suggests, school-day extensions provide an opportunity to rethink schools as places not just for learning, but for holistic student development, engagement and support.
This report was co-drafted by the OECD Development Co-operation Directorate and the Directorate for Financial and Enterprise Affairs. After a brief description of the volumes and allocation of assets of institutional investors globally as well as the trends (Chapter 1. ), the report analyses the share of these investments allocated to developing countries based on a sample of institutional investors in 2017-18, as well as their main characteristics in terms of regional and asset class distribution (Chapter 2. ). It subsequently looks at the main investment drivers and considerations of institutional investors when operating in developing countries, including the extent to which they seek alignment to ESG standards, SDGs or to collaborate with governments (Chapter 3. ). Finally, the report looks at the potential of blended finance solutions to unlock institutional investment for development purposes (Chapter 4. ).