At the heart of the government’s industrial strategy is a commitment to increase overall UK investment in R&D to 2.4% of GDP in 2027. Currently investment stands at 1.67% of GDP. So this has got to be a good thing? Actually this target is not very ambitious when measured against comparable countries and this lack of ambition is likely to affect the future prosperity of people living in the UK.
A comparison between the UK, France and Germany using OECD data shows that the UK has invested less in R&D than France as a share of GDP since 1986 and less than Germany since 1980. These differences are large and have persisted over a long time. It is perhaps worth noting that the share of R&D spending in GDP for the United states has always been above 2.4% and recently has been at around 2.7%.
This note summarises the research presented in a policy workshop held last week in Brussels. The studies were conducted under the ‘Economic Analysis of Collective Bargaining Extensions’ (CoBExt) project, funded by the European Union, and focused on the cases of Greece, Italy, Portugal and Spain.
In my introduction, I presented a comparison of collective bargaining (CB) across the four countries. Despite generally low trade union density rates, particularly in the private sector, these countries exhibit very high CB coverage, precisely because of widespread and nearly automatic (explicit or implicit) extensions. The exceptions to these practices were Greece and Portugal but only during their adjustment programmes, when extensions were entirely suspended (Greece) or made conditional on representativeness criteria similar to other EU Member States (Portugal). In Greece, firm-level CB agreements were also boosted through the suspension of the favourability principle, which allowed for greater differentiation in working conditions across firms.
On the 19th of October, we hosted the fifth meeting on the ‘Theory and Empirics of Inequality, Poverty and Mobility’, at the QMUL premises on Charterhouse Square, London. There was a large spread of theoretical and applied issues addressed in the six papers presented. In the morning three papers discussed issues related to the measurement of mobility and poverty, with applications to the EU, Mexico and with global poverty data, while in the afternoon three papers discussed the impact of mining on individual well-being in Sub-Saharan Africa, how social connections and financial incentives affect productivity in tasks that require coordination among workers via an experiment in a garment factory in India, and a final paper evaluating the effect of aid on conflict in Indonesia.
On Wednesday 14th of March, Prof. Claudio Lucifora (Catholic University of the Sacred Heart Milan) will be presenting his research.
Using a unique 12-years panel of personnel records from a large French company, we find that becoming mother (extensive fertility margins) largely affects labour market outcomes. Instead, fatherhood does not significantly impact on men’s wages or careers. An event study approach with the use of non-parents as control group enables us to show that, prior to childbirth, future mothers’ earnings are in line with that of non-mothers. However, one year after birth, they start to fall, reaching -9% in total pay and -30% in individual bonuses. This drop is persistent: 8 years after childbirth there is no evidence of a catching-up trend. Mothers also have lower chances to climb-up the hierarchy of the firm and be promoted to managerial positions. A decomposition of the motherhood penalty shows that these “missed promotions”, likely due to an increase in absenteeism during the child’s pre-school age, are the main determinants of mothers’ lower outcomes within the firm.
Lucifota, C., Meurs, D. and Villar, E. (Jan, 2018)
The increased range and quality of China’s exports is a major ongoing development in the international economy with potentially far-reaching effects, including in labour markets. On top of the direct effects of increased imports from China studied in previous research, in this paper we also examine the indirect labour market effects stemming from increased export competition in third markets. Our evidence, based on matched employer-employee panel data from Portugal covering 1991-2008 period, indicates that workers’ earnings and employment are significantly negatively affected by China’s imports, but essentially only through the indirect, ‘market-stealing’ channel. The results are robust to a number of checks, including an alternative measure of the indirect effects, and are found to be stronger for women, older and less educated workers, and workers in domestic firms.
Cabral, S., Martins, P., dos Santos, J. and Tavares, M. (Feb, 2018)
As Brexit Looms, Paris Tries a Business Makeover By David Segal / 10 Dec 2017 / New York Times
(…) “When you grow up in France, none of the heroes you learn about are entrepreneurs,” said Brigitte Granville, a professor of economics at Queen Mary University of London, who was raised in France. “When someone gets rich in France, people immediately ask, ‘What did he do to make this money? He must be a nasty person.’” (…)