by Cinzia Alcidi, Christian Bodewig, Brigitte Preissl (October, 2018)
In preparation for the forthcoming annual conference of Intereconomics, three experts who will be speaking at the event will answer some of the core questions on the theme.
Cinzia Alcidi, Senior Research Fellow and Head of Economic Policy Unit, CEPS
Christian Bodewig, Programme Manager, Southern Europe, World Bank and co-author, “Growing United: Upgrading Europe’s Convergence Machine”
Brigitte Preissl, Head of programme area “Knowledge Transfer in Economics”, Leibniz Information Centre for Economics (ZBW) and Editor-in-chief of “Wirtschaftsdienst” and “Intereconomics”
by Paul Redmond, Seamus McGuinness, Bertrand Maître (October, 2018)
A new ESRI study, funded by the Low Pay Commission, finds that minimum wage workers are more likely to transition to higher pay than remain on the minimum wage.
Over a nine month period, approximately 30 percent of minimum wage employees transitioned to higher pay, with 18 percent staying on the minimum wage. The vast majority of transitions to higher paid employment are achieved through wage progression within the employee’s current job, as opposed to a job change. However, certain groups within the population, such as non-Irish nationals, those with low levels of education, part-time employees and those on temporary contracts were found to have a higher likelihood of remaining on the minimum wage.
The remaining 52 percent experienced some other type of labour market transition either from or to higher pay, unemployment or inactivity.
Minimum wage employees were found to be more likely to transition to unemployment or inactivity compared to high paid workers. After controlling for a range of personal, education and work related characteristics, minimum wage employees are found to be up to four percentage points more likely to transition to unemployment or inactivity compared to high paid workers.
“While minimum wage employment acts as a stepping stone to higher pay for many employees, it is important to note that it can also represent a low wage trap for certain types of workers and is also associated with a greater likelihood of becoming unemployed”, said Dr Redmond, an author of the report.
Dr Donal De Buitléir, Chairman of the Low Pay Commission welcomed the publication of the research paper, which was produced under a research partnership agreement between the Low Pay Commission and the ESRI. He commented, “The Low Pay Commission has a responsibility in legislation to ensure that any recommendations it makes do not have a significant adverse impact on employment and the low paid. This report provides much needed data regarding the factors which influence the ability of minimum wage workers to transition to higher paid employment and is a valuable source of information for the Commission to consider when making future recommendations.”
by Nizamul Islam, Ugo Colombino (October, 2018)
The design of a nationwide policy of minimum income or basic income in Italy, comparable to the policies implemented in most European countries, is still a working enterprise. A first proposal to fill the gap was formulated by the “Commissione Onofri” (Onofri 1997) appointed by a Centre-Left Government. The proposal was tested in a sample of local areas during the following two years. However, the test was stopped by a Centre-Right Government that meanwhile had taken over also transferred the competence of income support policies to the Regions, where in fact during the last two decades some implementations of basic income policies took place. More recently, a national basic income scheme, “Reddito di Inclusione” (RdI) has been implemented in 2018. It addresses the population in absolute poverty. In perspective, it is meant to be universal although so far the funds are sufficient to covers about half of the target population. After the last political elections of March 4, the new Government is a coalition between Lega and Movimento 5 Stelle (M5S). Lega proposes a Flat Tax (FT). M5S proposes a basic income guarantee, “Reddito di Cittadinanza” (RdC) that should cover all the population below the relative poverty threshold. While it appears unlikely that the two proposals will be implemented, if ever, with the announced design and figures, their combination is interesting since it has roots in public economics and in policy debates involving different, but sometimes converging, sides of the ideological spectrum. The think tank “Istituto Bruno Leoni” has also recently proposed a comprehensive fiscal policy reform that includes a basic income guarantee and a flat tax. The purpose of this paper is to evaluate and compare the fiscal and behavioural effects of (simplified or modified versions of) the M5S+Lega package, the RdI and the proposal by “Istituto Bruno Leoni”. Moreover, we will show an exercise in identifying optimal (i.e. Social Welfare maximizing) packages that combine basic income and flat tax.
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Time and place: 25/10/2018 in Dublin, Ireland
Seminar Topic: With the increase in national debts, the salary cost and productivity of civil servants are under scrutiny. However, public wage setting policies should account for relevant comparisons with the private sector. We suggest novel evidence for France by conducting a comprehensive assessment of the public sector wage gaps throughout the distribution and over … Continued
Time and place: 18/10/2018 in Luxembourg, Luxembourg
Why does inequality differ so much across countries? While income inequality trends have been extensively researched, much less is known about the driving forces behind international differences in inequality. Yet, differences across countries remain more striking than the increases in inequality recently observed within any industrialized country. LISER, the University of Luxembourg and the University … Continued
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