The ongoing COVID-19 pandemic risks wiping out years of progress made in reducing global poverty. In this paper, we explore to what extent financial inclusion could help mitigate the increase in poverty using cross-country data across 78 lowand lower-middle-income countries. Unlike other recent cross-country studies, we show that financial inclusion is a key driver of poverty reduction in these countries.
Vocational education is an important and well-established alternative to academic education. In most countries, the number of vocational graduates is now on par with that of academic graduates. In the case of China, there are approximately 11 million students graduating with vocational education qualifications annually, only slightly less than the around 12 million academic graduates per year.
Figure 1. The density of secondary vocational schools in China (More details in the paper)
Recent research by the European Investment Bank indicates that workers in Europe spend less than 0.5% of their working time on training. This figure seems too low and indeed economics has long predicted some degree of under-provision of training. First, training is expensive for firms, as it entails significant direct and indirect costs. Second, employers know they will lose their investments in training if employees subsequently leave.
Public policy may play a role in alleviating the market failure that leads to such under-provision of training. The new working paper featured in this blog (‘Employee training and firm performance’) contributes empirical evidence to this question. The research evaluates the effects of a €200-million EU training grants scheme on different dimensions of firms.
What is the political economy of monitoring pollution in China? Should we be using relative or absolute measures of inequality? What are the economic implications of stigma? Have skills and human capital a long term effect on local economic conditions? Is there intergenerational mobility in Africa? Is the millennium missing out in rising prosperity? These were some of the questions raised by CGR and guest researchers during the annual Workshop on Political Economy and Economic Development and during the Annual Globalisation Seminar hosted by the Centre for Globalisation Research on the 9th of November, 2018.
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.
Since 2014, I have coordinated and run an annual workshop on theoretical and empirical research on the analysis of poverty, inequality and mobility, generously supported by the School of Business and Management at Queen Mary University of London.
Following the 2016 workshop, several of the presented papers formed the basis for an edited volume of the journal Research on Economic Inequality (Bandyopadhyay 2018). The ten contributions address issues that are at the forefront of the discussion on how we measure poverty, inequality and welfare and how we use such measurements to devise policies to deliver social mobility. While some of the papers deal with theoretical issues that question current methods on how we measure poverty, inequality and welfare, some of them use novel techniques and datasets to investigate the dynamics of poverty and welfare, with special reference to developing countries.