Immigration to the Land of Redistribution

Negative perceptions about migrants in Europe, the Continent with the largest social policy programmes, are driven by concerns that foreigners are a net fiscal burden. Paradoxically instruments of social inclusion are becoming a weapon of mass exclusion. Increasing concerns of public opinion are indeed pressing Governments, in the midst of the recession, to reduce welfare access by migrants or further tighten migration policies. Are there politically feasible alternatives to these two hardly enforceable (and procyclical) policy options? In this paper we look at economic and cultural determinants of negative perceptions about migrants in Europe. Based on a simple model of the perceived fiscal effects of migration and on a largely unexploited database (EU-Silc), we find no evidence that legal migrants, notably skilled migrants, are net recipients of transfers from the state. However, there is evidence of "residual dependency" on non-contributory transfers and self-selection of migrants more likely to draw on welfare in the countries with the most generous welfare state. Moreover, redistribution does not find much support among those who are in favour of immigration. A way out of the migration into the welfare state dilemma facing Europe involves i. co-ordinating safety nets across the EU, ii. adopting explicitly selective migration policies, and iii. improving activation programmes. Other options – such as restricting migration or welfare access by migrants – are however on the agenda of national Governments.migration policy, welfare access, fiscal externality

Setting the Minimum Wage

The process leading to the setting of the minimum wage so far has been fairly overlooked by economists. This paper suggests that this is a serious limitation as the setting regime contributes to explain cross-country variation in the fine-tuning of the minimum wage, hence in the way in which the trade-off between reducing poverty among working people and shutting down low productivity jobs is addressed. There are two common ways of setting national minimum wages: they are either government legislated or are the outcome of collective bargaining agreements, which are extended erga omnes to all workers. We develop a simple model relating the level of the minimum wage to the setting regime. Next, we exploit a new data set on minimum wages in 66 countries that had already or introduced a minimum wage in the period 1981-2005 to test the implications of the model. We find that a Government legislated minimum wage is lower than a wage floor set within collective agreements. This effect survives to several robustness checks and hints at a causal relation between the setting regime and the level of the minimum wage.minimum wages, collective bargaining, statutory minimum

Eastern enlargement, migration and Euro adoption

"Western Europe has welcomed its new members by shutting the door in the face of the workers coming from the East and making their road to EMU more difficult. Two years down the road of enlargement, some countries are now liberalizing worker flows. Indeed, as shown in this paper, these restrictions are not justified by migration pressures and rely on ill-founded concerns that nominal convergence could delay real convergence. Moreover, they are mutually inconsistent: delaying EMU convergence would just worsen labour market conditions with respect to a scenario of relatively rapid Euro convergence, by increasing real interest rates and negatively affecting FDI directed to the New Member States. This ultimately means that delaying EMU convergence may backfire in terms of stronger East-West migration pressures." (Author's abstract, IAB-Doku) ((en))EU-Osterweiterung, Eurozone, Währungsunion, internationale Wanderung, Integrationspolitik, europäische Integration, Einwanderungspolitik, Konvergenz, Protektionismus, Wanderungspotenzial, Ost-West-Wanderung, Europäische Union, Osteuropa, Mitteleuropa

Institutional Determinants of Labor Reallocation in Transition

Studying the transition means analyzing the interactions between institutions and structural change, a process we still know very little about. In this paper we show that the transition process has been very different in the countries of the Former Soviet Union (FSU) and those of Central and Eastern Europe (CEE) in terms of reallocation of labor from the old to the new sector, the extent of real wage decline and responsiveness of employment to output changes. We sift through the theoretical and empirical literature to find an explanation for these diverging adjustment trajectories and conclude that the difference can be explained in part by different policy models. The CEE countries adopted social policies that upheld wages at the bottom of the distribution and hence forced the unproductive old sector to restructure or collapse. The FSU countries allowed wages to free fall and hence did not force the hand of the old sector. Why these two models were adopted is the subject for political-economy research, however we speculate that it has to do with the relative appeal of joining the EU.http://deepblue.lib.umich.edu/bitstream/2027.42/39768/3/wp384.pd

Informatics: Science or Téchne?

Informatics is generally understood as a “new technology” and is therewith discussed according to technological aspects such as speed, data retrieval, information control and so on. Its widespread use from home appliances to enterprises and universities is not the result of a clear-cut analysis of its inner possibilities but is rather dependent on all sorts of ideological promises of unlimited progress. We will discuss the theoretical definition of informatics proposed in 1936 by Alan Turing in order to show that it should be taken as final and complete. This definition has no relation to the technology because Turing defines computers as doing the work of solving problems with numbers. This formal definition implies nonetheless a relation to the non-formalized elements around informatics, which we shall discuss through the Greek notion of téchne

Returns to Mobility in the Transition to a Market Economy

In spite of ongoing dramatic changes in labor market structure, transitional economies display rather low worker flows across sectors and occupations. Such low mobility can be explained by low returns to job changes as well as by market segmentation in the allocation of job offers. We develop an econometric model which enables us to characterize intertemporal changes in probabilities of dismissal, remuneration, and offer arrival rates on the basis of information on observed transitions and wage payments. The model is estimated using data from the Polish Labor Force Survey. Our results indicate a significant degree of segmentation in the allocation of job offers and more stability in public sector versus private sector jobs. Our model can also be used for policy experiments. In particular, we infer that reductions of 10 per cent in the generosity of unemployment benefits will not significantly boost outflows from the unemployment state. These findings support explanations for low mobility in transitional economies, which are based on informational failures, and high costs of moving from public to private enterprises for those with high levels of job tenure and labor market experience in the public sector.http://deepblue.lib.umich.edu/bitstream/2027.42/39604/2/wp217.pd