Transcript Lisbon strategy

Methodology to assess the
progress in Lisbon strategy
Smilovice, 5th December 2007
Alexandr Hobza
Unit E-1:Coordination of structural reforms and their macroeconomic
implications
DG ECFIN, European Commission
Outline of presentation
1. Lisbon strategy: structural reform process
in Europe
2. Methodology to assess progress with Lisbon
Strategy
3. Tracking reforms
4. Multi-step methodological approach to
identifying growth-enhancing policies
5. Modelling effects of reforms
Lisbon strategy
Economic perspective

Need to deal with economic challenges





Low growth potential and adjustment capacity
(euro area)
Globalisation
Ageing
Climate change
Response


Macroecomic policies geared towards stability and
growth
Comprehensive coordinated process of structural
reforms
Lisbon strategy
Historical perspective



Continuation of pre-Lisbon coordination
processes
Politically driven process – European Council
meetings and headline targets
Mid-term review in 2005 and re-launch of
the Strategy
Lisbon strategy
Procedural perspective




Rationale for coordination
Coordination of economic policies in EMU
Lisbon: structured coordination based on
soft tools
Integrated Strategy for Growth and Jobs–
new governance arrangements

National ownership as a solution


Political economy elements (wider participation, more focus,
integration of policies)
The national key challenges at the core of the EU strategic
approach
Spillovers of structural
policies
Policy area
Model
Simulation assumptions
WorldScan
Increasing R&D intensity from 1.86% to 2.7%
in 2010 (partially paid through a R&D
subsidy financed by lump-sum transfers
from households).
3.3%
50%
QUEST III
Increasing R&D intensity from 1.86% to 2.54%
in 10 years through a R&D subsidy
(financed from consumption tax).
4.8%*
20%
WorldScan
Achieving skill targets set by 2003 European
Council. Input into simulation (effects
on labour efficiency from these policies
and demographic developments) were
modelled in a special model.
2.1%*
4%
WorldScan
Reduction in administrative burden by 25%
modelled as a labour efficiency shock.
1.9%
5%
NiGEM
Reduction in administrative burden by 25%
modelled as a shock to mark-up of
prices over unit costs.
1.1%
10%
WorldScan
Labour supply shocks from achieving the 70%
target for employment rate.
7%
4%
R&D
Skills
Administrative
burden
Employment
targets
Average
spillovers
(as share
of overall
effect)
Overall longrun effect
on GDP in
EU
Complementarities
between reforms
Trhy produktů
Znalostní ekonomika
Trh práce
Finanční trhy
Makro
***
Více konkurence => více
investic do VaV (křivka ve
tvaru „U“)
Nižší renty snižují odpor
vůči reformám; nižší
regulace na trzích
produktů zvyšuje efektivitu
reforem na trzích práce
Větší poptávka po úvěrech
=> větší příležitosti pro
finanční sektor;
Vyšší růst a nižší inflační
tlaky => větší prostor pro
akomodativní
makroekonomické
politiky;
Znalostní
ekonomika
Zvyšování lidského
kapitálu => větší
nabídka
kvalifikovaných
pracovníků a větší
flexibilita při realokaci
zdrojů do nových aktivit
***
Vyšší průměrná úroveň
dovedností pracovníků =>
menší potřeba ochrany
přes instrumenty na trzích
práce; více inovativních
firem => větší poptávka po
práci
Větší poptávka po úvěrech
a větší investiční
příležitosti
Vyšší růstový potenciál
usnadňující formulaci
makroekonomických
politik
Trh práce
Lehčí realokace
pracovního vstupu =>
reformy trhu produktů
jsou efektivnější
Nižší náklady práce a větší
flexibilita => lepší
prostředí pro začínající
inovativní firmy
***
Větší objem úspor
k dispozici; menší
pravděpodobnost osobních
bankrotů
Větší flexibilita při
stanovování mezd => větší
odolnost vůči šokům a
menší tlak na monetární a
fiskální politiku
Finanční trhy
Nižší cena kapitálu =>
lepší alokace zdrojů
Dostupnější kapitál pro
high-tech firmy
Lepší pojištění přes
finanční trhy => menší
potřeba pro pojištění na
trzích práce
***
Menší náklady na
financování dluhu
Větší kvalita veřejných
financí => realokace
prostředků na výdaje na
VaV a vzdělávání
Makroekonomická stabilita
=> snižují se
přizpůsobovací náklady a
snižuje se odpor vůči
reformám; zdravé veřejné
finance => větší prostor
pro kompenzaci jedinců
tratících na reformách
Makroekonomická stabilita
a růst => nižší
pravděpodobnost
finančních krizí
***
Trhy produktů
Makro
Makroekonomická
stabilita => lepší
podmínky pro reformy;
méně „crowding out“
soukromých investic
Economic policy
coordination in EMU
Monetary policy stance
Monetary policy
ECB
Article 105
Exchange rate
Council (+ECB/Commission)
Article 111
Integrated Guidelines Package
Commission, Council, EP, European Council
Broad Economic Policy Guidelines
Article 99
Macroeconomic Dialogue
Cologne Resolution
Macroeconomic conditions
Stability and Growth Pact
Stability/Convergence Programmes
Article 104, Amsterdam Resolution
and Council Regulations
Budgetary stance
Employment Guidelines
Article 128
Community Lisbon Programme
National Reform Programmes
Smoothly operating markets, potential growth
Types of policy-making
in the EU
POLICIES
SINGLE
FORM OF
MODE OF
ACTORS
COORDINATION
COORDINATION
INVOLVED
Monetary policy
Single policy (euro area)
Single institution
ECB
Exchange rate
Single policy (euro area)
Coordination in the
Council
Council
ECB
Eurogroup
Commission
Competition policy
Single policy
Implementation by the
Commission
Member States
Commission
Council
External trade
(customs union)
Single Policy
Coordination in the
Council
Member States
Commission
Council
Budgetary policy
- Treaty rules
- Commonly agreed rules
and objectives
- Information exchange
- Peer review
Coordination in the
Council
Member States
Commission
Council
Eurogroup
- Rules
- Joint decisions
- Council directives
- Peer review
Coordination in the
Council
POLICY
HARD
(balances)
COORDINATION
Internal Market
(structural reforms)
Joint fora
PROCEDURES
Excessive Deficit
Procedure
Stability and
Growth Pact
Broad Economic
Policy Guidelines
Member States
Council
Commission
Types of policy-making
in the EU
POLICIES
COORDINATION
MODE OF
ACTORS
COORDINATION
COORDINATION
INVOLVED
PROCEDURES
Policy-mix
- Dialogue
- Information exchange
Joint fora
ECB
Commission
Council
Eurogroup
Social partners
Macroeconomic
Dialogue
Budgetary policy
- Commonly agreed
objectives
- Guidelines
- Peer review
Coordination in the
Council
Member States
Commission
Council
Eurogroup
Broad Economic
Policy Guidelines
- Information exchange
- Discussion of best
practices
- Guidelines
- Peer review
Coordination in the
Council
Member States
Commission
Council
Social partners
Employment
Guidelines
- Information exchange
- Discussion of best
practices
- Guidelines
- Peer review
Coordination in the
Council
Member States
Commission
Council
Broad Economic
Policy Guidelines
(quality and
sustainability of public
finances)
SOFT
FORM OF
Labour market
policies
(structural reforms)
Product and capital
market policies
(structural reforms)
Joint fora
Stability and
Growth Pact
Broad Economic
Policy Guidelines
Lisbon strategy:
governance structure




Overall policy objectives set by Heads of State of
Government (Spring European Council) + Integrated
Guidelines as a blueprint for policy design
Some common targets, e.g. employment rates of 70% by
2010, to raise spending on R&D to 3% of GDP, reduce
administrative burden in complying with regulations by
25% between 2006 and 2010
Member States (not the European Commission) define
their key growth challenges and reform commitments
Reform priorities fixed for a three-year cycle, BUT annual
reporting and evaluation exercise which leads to country
specific political recommendations
Lisbon strategy: A political
process supported by
economic analysis
•
Based on the premise an external constraint and peer pressure
can help overcome reform bottlenecks
• short-term (concentrated) costs versus uncertain long-term
(dispersed benefits
• rent-seeking interest groups can capture policy makers
•
Also recognises that there are economic spillovers (trade, internal
market) and political economy spillovers (institutional learning,
demonstration effects, peer pressure) in coordinating at EU level
•
Combination of evidence-based analysis supported by a political
process can generate results
•
Can take years to “frame” a consensus on the nature/scale of policy
challenge, and on the policy reforms needed to tackle them
Work on the Lisbon
evaluation methodology

A three-pronged approach
I:
Tracking structural reforms
II: Quantifying their impact on growth and jobs
III: Modelling

Practical arrangements
ECFIN working together with other lead DGs, i.e.
SG, ENTR and EMPL
Developing analysis working with new Lisbon
Methodology (LIME) Working Group attached to
the EPC
Method I – tracking
structural reforms

Developing institutional databases on reforms
- LABREF: an operational database of enacted labour
market reforms
- MICREF : a database of microeconomic reforms,
currently being developed

Reporting tables/grids attached to NRPs
- working with LIME group to streamline format and
content
LABREF database


database on enacted labour market reforms
in 9 areas covering labour taxation,
unemployment and social benefits, ALMPs,
EPL, disability and early retirement schemes,
pension systems, wage bargaining, working
time organisation, immigration and mobility.
completed for 2000-2006 period (except BU
and RO)
LABREF database
Measures contained in LABREF by reform area: 2000-2006
(% on total reforms in each geographical area)
0.30
New Members States
euro-zone 12
0.25
EU15-excl euro zone
0.20
0.15
0.10
0.05
0.00
Labour
Taxation
Benef its
ALMPs
EPL
Pensions
Wage
Bargaining
Working
Time
Immigration
Mobility
MICREF database



database of microeconomic reforms developed in
cooperation between DGs ECFIN/ENTR and EPC with
assistance from JRC
includes policies such as market integration, competition
policy, sector specific regulation, start-up conditions,
business environment, R&D and innovation, education)
Further steps
- back-dating to 2004/5 by Spring 2008
- development of Internet interface underway
Reporting tables
<------------------------------------------------ ------ ESSENTIAL --------------------------------------------> <---------------- DESIRABLE ------------->
Description module
Classification module
Impact and follow-up module
Follow
Functional Key REC. and Euro
Direct
Description Rationale of Timeline Timeline
Integrated
Comment up
Eurostat Impact Input Output
Comment
Status
Classificati challeng Points to area
budget
(voluntary) Guidelines
of measure measure start
end
(voluntary) procedindicator variable indicator indicator
on
es
watch REC
cost
ures
Measure
1
Method II – analysing the
impact of reforms on
growth and jobs

Starting point is a focus on growth drivers through
decomposition of GDP
- quantify the sources of per capita GDP gaps in the EU
- quantify the determinants of growth over 2000-2005 using a
growth accounting approach decomposed into 12 components
(especially detailed on the labour market side)

The purpose is
- to provide an analytical benchmark for analysing the impact of
structural reforms on growth and employment
- verify that policies are focussing on the most important growth
drivers
Growth determinants and
policy measures
HDP na hlavu
Využití pracovní síly
(odpracované hodiny na hlavu)
Odpracované
hodiny na
pracovníka
Strukturální míra
nezaměstnanosti
Reformy na trzích
práce
Míra
zaměstnanosti
Míra participace
na trhu práce
Integrace finančních
trhů
Produktivita práce
(HDP na odpracovanou hodinu)
Kapitálová intenzita
(kapitál na odpracovanou
hodinu)
Kvalita pracovní
síly (složení
dovedností)
Souhrnná
produktivita faktorů
Kvalita kapitálu
(složení a kvalita
aktiv)
Opatření pro
znalostní ekonomiku
Čistý
technologický
pokrok
Reformy na trzích
zboží a služeb
Method II – a multistep
approach





Step 1: Identifying the components of GDP where MSs are
underperforming (in terms of level and growth) relative to a given
benchmark through GDP accounting.
Step 2: Identifying the conceptual links between policy
interventions, a list of indicators and the underperforming GDP
components.
Step 3: Using performance and policy indicators to identify the
most problematic policy areas/issues, which are likely to be
responsible for the income gaps/weak growth components.
Step 4: Bringing together the results of step 1 (GDP accounting)
and step 3 (indicator-based assessment of policy area performance)
and supplementing them with country-specific expertise and data
Step 5: Present the result in a policy context (link with NRP and
Key Challenges
Step 1: Growth accounting
Standard disaggregation
DG ECFIN refined
disaggregation
Native
population
Working age population
Net migration
Working age population share in
total population
Labour market Participation
Unemployment rate
Average hours worked per
person
Capital deepening (capital per
hour worked)
•Total factor productivity
Degree of exogeneity or
endogeneity
Exogenous
Partially endogenous
Exogenous
Youth Participation
Largely endogenous
Male prime-age participation
Partially endogenous
Female prime-age participation
Partially endogenous
Older-worker participation
Largely endogenous
Unemployment rate
Partially endogenous
Average hours worked per
worker
Partially endogenous
Labour quality
Largely endogenous
Capital deepening
(capital per low-skilled labour
hour worked)
Partially endogenous
Total factor productivity
Endogenous
Step 1 – Growth
accounting
Y
Y
H  L 



 A  QL
POP H  L POP 
Y
H
L
α
POP
SWP
PART
ur
QL
K
TFP
1
 K 


H

L



  H  SWP  PART  (1  ur ) 


total GDP
the annual hours worked per person employed
total employment, which the product of POP, PART and (1-ur)
the share of labour in total value added, which is set equal to
65% in all countries
total population
the working age population share (15-64) in total population
total labour force participation rate
the overall unemployment rate
indicator of labour quality
the stock of capital
total factor productivity as a residual
Step 1 – Growth
accounting
To capture the change in average quality of labour, we
compute the average relative productivity of a person
employed compared to those with low educational attainment:
Q
t

1
EL t  EM
t
 E H t . S

WS

ES t .


WL
Low, Medium, High  

.

2002 
2002
Where Es and Ws are respectively employment and hourly
wage (without overtime) for each educational attainment
(ISCED-3).
Step 1 – Growth
accounting
1
Y  A( L  H  QL ) K 1  A( L  H  QL ) ( L  H  QL ) 1 K 1
gY  g A  (1   )( g K  g L  g H  gQL )  gQL  g H  g POP M  g m 
g
POP-M
m


K

 A( L  H  QL )
 L  H  QL 
mt 1
ur
 g SW P  g PART  gur  t 1
1  mt 1
1  urt 1
denotes a rate of growth
native population
net migration rate
Explaining the gaps in GDP
per capita across countries
Percentage gap with respect to
EU-5 1) GDP per capita
Effect of labour
resource utilisation
(Hours worked per capita)
Effect of labour
productivity
(GDP per hour worked)
Change in gap
2000 - 2005
Luxembourg
Ireland
Denmark
Netherlands
Austria
Belgium
United Kingdom
Sweden
Finland
Germany
France
EU-15
Euro area
Italy
EU-25
Spain
Cyprus
Greece
Slovenia
Czech Republic
Portugal
Malta
Hungary
Estonia
EU-10
Slovak Republic
Lithuania
Poland
Latvia
-80
-60
-40
-20
0
20
40
60
80
100
-80
-60
-40
-20
0
20
40
60
80
100
1) Average of the best 5 performing EU countries (Luxembourg, Ireland, Denmark, Netherlands and Austria)
-80
-60
-40
-20
0
20
40
60
80
100
-10
-5
0
5
10
15
20
Czech Republic: Growth
accounting
Growth decomposition 2000-2005
Gap with EU15 in level in 2005
GDP per capita
GDP per capita
Labour Productivity
Labour Productivity
Labour Resource Utilisation
Labour Resource Utilisation
Capital Deepening
Capital Deepening
Total Factor Productivity
Total Factor Productivity
Labour Quality (Education)
Labour Quality (Education)
Share of Working age Population
Share of Working age Population
55-64 Participation
55-64 Participation
Unemployment Rate
Unemployment Rate
Average Hours Worked
Average Hours Worked
Native Population
Native Population
Net Migration
Net Migration
Youth Participation
Youth Participation
25-54 Male Participation
25-54 Male Participation
25-54 Female Participation
25-54 Female Participation
-60
-40
-20
0
20
40
-2
-1
0
1
2
3
4
5
Step 1 – Growth
accounting

New features of the growth accounting
- very detailed decomposition
- accounting for the quality of labour
- contribution of migration

Caveats
- descriptive approach, does not inform about causality
- results affected by assumptions of technical nature – e.g.
Cobb-Douglas PF, no economies of scale, calibration of
labour share (though widely accepted)
- growth and its components can be affected by the business
cycle
- developments in each component might be difficult to
interpret in practice
Step 2 – Making the link
with policies

Need to link growth accounting with policy interventions and
performance on indicators


need to draw on a wide body of economic research
The structure of the fiches





Definition and scope of the policy area
Impact on growth components (theoretical mechanism and
transmission channels); direct and indirect
Evidence and estimated elasticities in recent literature
Possible spillovers and complementarities with other policy
areas
Non-exhaustive list of relevant indicators
Step 2 – Making the link
with policies
Labour market
Innovation and
knowledge
Product market
Macroeconomy
Active labour market policies (training,
job-search assistance, well-designed
and targeted programmes
Openness to trade and
investment
R&D, innovation policies
and ICT
Long-term sustainability of
public finances and
welfare policies
Making work-pay: incentive to work
through the interplay of tax and
benefit system
Barriers to
entrepreneurship and
business environment
Education and life long
learning
Stability oriented
macroeconomic
policies
Reforming labour taxation to stimulate
labour demand
Competition-friendly policy
framework
Relaxing job protection while
combating labour market
segmentation/dualisation
Efficient financial markets
and access to finance
Working time organisation
Specific labour supply measures for
women
Specific labour supply measures for
older-workers
Improving wage bargaining and wagesetting policies
Immigration and integration policies
Labour mobility (geographical and
sectoral)
Example: LS of older
workers
Policy area
GDP
components
Policy and performance indicators
Specific
labour
supply
measures for
olderworkers)
Older-worker
participation
Policy indicators
Implicit tax on continued work (Net change in pension wealth if retiring at 65
instead of 62 -2004 (-)
Coverage of early retirement 2004 (-)
Life-long learning: Participation of the population aged 55-64 in education and
training 2000-2006 (+)
Performance indicators
Average exit age from the labour force 2001-2005 (+)
Employment rate of older workers aged 55 to 64 - Women (%) 1992-2006 (+)
Employment rate of older workers aged 55 to 64 - Men (%) 1992-2006 (+)
Step 3: Scoring system
Score = (Indicator-EU15 average)/Standard deviation *10
• trimming the score (3 stdev.) so as to avoid giving
too much weight to outliers
• not rounding the final value in the maquette but
presenting it without decimal
• reporting the EU15 average and the stdev. as well
as the distance to alternative benchmarks (EU27, five
best values, EU5, the Lisbon target)
Step 3: Scoring system
Under normal
distribution
EU15
Average+one stdev. E(X)+ (X)
E(X)+0.4 (X)
EU15 Weighed average
E(X)
E(X)- 0.4 (X)
E(X) - (X)
++ =2 16%
+
0
0
-
=1
19%

=0
31
%
=-1
19%
- - =-2 16
Table 1: Application of the new scoring system to step 1 (level and change)f
GDP accounting level assessment vis-à-vis EU15
GDP per capita
Labour
Labour
Capital
Total
Initial
Share of
55-64
Unemploy
Average
Native
Deepening
Factor
education
Working age
Participation
ment
Hours
Population
Migration Participation
Rate
Worked
(fertility rate)
(share of
productivity utilisation
Score
BE
BG
CZ
DK
DE
EE
IE
GR
ES
FR
IT
CY
LV
LT
LU
HU
MT
NL
AT
PL
PT
RO
SI
SK
Productivity (Labour quality)
Population
0.00
8
-30
-28
13
1
-30
23
-21
-8
0
-5
-19
-30
-30
30
-30
-30
13
11
-30
-30
-30
-22
-30
21
-30
-30
3
5
-30
14
-22
-9
12
-7
-24
-30
-30
30
-30
-22
13
-2
-30
-30
-30
-24
-30
-16
28
30
12
-6
28
7
8
3
-15
5
16
18
13
30
7
-10
-3
18
2
13
15
11
-7
2
-30
-30
-15
8
-30
4
3
-10
10
2
-30
-30
-30
-3
-30
-29
8
1
-30
-30
-30
-30
-30
28
-30
-21
13
-5
-25
18
-16
1
14
1
-1
-25
-19
30
-22
-2
8
-8
-24
-15
-30
-13
-21
-12
-6
-1
-5
12
3
-10
-10
-8
-10
-12
-9
-8
-7
1
8
-14
0
10
3
-7
2
3
4
Net
Youth
25-54
25-54
Male
Female
Participation
Participati
-3
-30
20
-7
10
-29
-4
18
-1
9
-11
25
-27
-21
26
-30
6
11
3
-30
-1
-30
-12
11
2
3
10
15
6
12
-9
-11
-10
8
-19
2
11
17
-5
-5
-30
6
7
2
10
-7
18
11
foreign pop)
-10
21
30
-4
4
13
15
8
19
-14
-3
17
21
12
4
19
29
8
14
30
6
27
30
30
-14
-9
0
16
5
12
6
-4
-1
-7
-15
5
7
6
-15
-13
-15
1
-14
-17
7
-7
-15
-12
-5
-4
8
8
-3
-3
9
-7
-3
-6
0
8
-4
-2
30
1
2
9
8
-28
0
-2
3
-30
-6
30
22
-3
-12
28
2
30
4
-4
14
7
20
19
-4
27
9
-15
3
26
6
30
8
9
2
-30
-6
8
-5
-30
10
-30
-5
12
-6
-3
-6
-7
5
-6
6
6
-3
-30
-3
-5
-7
-7
9
-27
-20
-7
11
30
-1
2
6
0
-10
30
30
-24
30
-22
-15
-9
14
-20
-18
-28
-19
-27
-12
-18
-12
18
2
-12
5
-13
0
-8
-13
-5
-9
-20
-17
-19
6
21
10
-11
-4
-15
-7
-10
Step 3: Scoring system
GDP components
Labour utilisation
Share of working age population
Native population
Net migration
Unemployment rate
Average hours worked
Youth participation
25-54 male participation
25-54 female participation
55-64 participation
Labour productivity
Capital deepening
Total factor productivity
Labour quality (educational attainment)
GDP per capita
Old scoring New scoring
2
30
2
30
-1
-6
-2
-20
1
8
2
22
-2
-12
2
20
1
10
0
0
-2
-30
-2
-30
-2
-21
0
-1
-2
-28
Improvements to the
methodology







Robustness checks
Correlations between indicators
Taking account of cyclicality
Extending growth accounting to include
sectoral decomposition or environtal
dimension
Aggregate score based on a narrower set of
indicators
Extending growth accounting to include
forecast
Presentational issues
Next steps
•
Questionnaire to MSs to seek clarification
on:
•
•
•
•
•
•
new scoring scheme
cyclical adjustments
robustness checks
presentation of results etc.
« Final » proposal to be presented in
January 2008
Methodology to be applied by May 2008
Mechanical application:
overall results
Policy areas -- Aggregate scores for CZ
Labour market
Active labour market policies
Making work-pay: incentive to work through the interplay of tax and
benefit system
Reforming labour taxation to stimulate labour demand
Relaxing job protection while combating labour market
segmentation/dualisation
Working time organisation
Specific labour supply measures for women
Specific labour supply measures for older-workers)
Improving wage bargaining and wage-setting policies
Immigration and integration policies
Labour mobility (geographical and sectoral)
Product and capital market regulations
Openness to trade and investment
Barriers to entrepreneurship and business environment
Competition-friendly policy framework
Efficient financial markets and access to finance
Innovation and knowledge
R&D, innovation policies and ICT
Education and life long learning
Macroeconomy
Long-term sustainability of public finances and welfare policies
Stability oriented macroeconomic policies
Level
Change
0
0
0
-1
1
-1
0
1
-1
0
-1
1
0
-1
0
0
1
1
2
0
0
-1
0
0
1
-1
-1
0
-1
0
1
0
0
0
0
0
Example: Making work pay
Making work-pay: incentive to work through the interplay of tax and benefit system
Unemployment benefit duration, months (Danish study-median of the min-max range)
Average unemployment benefit duration (years) (OECD)
Job availability requirement index (Danish study)
Unemployment trap (low wage-earner): Marginal effective tax rate for an unemployed person (67% AW, single person)
Unemployment trap (average wage-earner): Marginal effective tax rate for an unemployed person (100% AW, single person)
Inactivity trap (low wage-earner): Marginal effective tax rate when moving from social assistance to work (67% AW, single person)
Inactivity trap (average wage-earner): Marginal effective tax rate when moving from social assistance to work (100% AW, single person)
Net Replacement Rates for unemployed persons (67% AW, single person)
Net Initial Replacement Rates for unemployed persons (100% AW, single person)
Average unemployment benefit replacement rate (%) (OECD)
Unemployment rate - Pre-primary, primary and lower secondary education - levels 0-2 (ISCED 1997) (%)
Employment rate - Pre-primary, primary and lower secondary education - levels 0-2 (ISCED 1997) (LFS) (%)
Long-term unemployment rate
Aggregate score on level
Number of individual indicators with negative performance
Level
Growth
2
2
2
1
0
0
2
1
2
2
2
2
1
1
-2
-2
-1
0
3
-2
-2
1
1
2
Example: Female and
older worker LS
Specific labour supply measures for women
Childcare (0-2 years) for less than 30 hours
Childcare (0-2 years) for 30 hours and more
Childcare (3 years to compulsory school age) for less than 30 hours
Childcare (3 years to compulsory school age) for 30 hours and more
Childcare (compulsory school age up to 12 years) for less than 30 hours
Childcare (compulsory school age up to 12 years) for 30 hours and more
Number of months of maternity/paternity/parental leave with benefits replacing at least 2/3 of salary
Inactivity trap for the second member of a couple (half-time at 67% APW)
Low-wage trap for second-earner income (first earner: 67% APW; second earner: 33% to 67%)
Life-long learning. For women
Female employment rate (%)
Gender pay gap in unadjusted form
gender segregation in occupations
Gender segregation in sectors
Unemployment gender gap
Employment impact of parenthood
Employment gender gap in full-time equivalent
Female part-time workers in % of total female employment
Female employees in part-time who could not find stardard employment as % of total employees
Aggregate score on level
Number of individual indicators with negative performance
Specific labour supply measures for older-workers
Implicit tax on continued work
Coverage of early retirement
Life-long learning: Participation of the population aged 55-64 in education and training
Average exit age from the labour force- Women
Average exit age from the labour force- total
Employment rate of older workers aged 55 to 64- Men
Employment rate of older workers aged 55 to 64- Women
Aggregate score on level
Number of individual indicators with negative performance
Level
-2
-2
-1
0
0
0
1
-2
0
-1
0
-1
-2
-1
-1
-2
1
-2
2
-1
11
Growth
-2
2
-2
-1
1
2
2
-1
2
0
-2
0
5
Level
Growth
1
1
-1
-2
0
1
-1
0
2
2
2
1
1
1
Example: Business
environment
Barriers to entrepreneurship and business environment
Level
Business investment - Gross fixed capital formation by the private sector as a percentage of GDP (STRIND er070)) (+)
1
Business demography - Birth rate - Number of real enterprise births of year n, divided by the population of active enterprises of year n (STRIND
0
er081) (+)
Business demography - Survival rate - The percentage of all real enterprise births of year n which are still active in year n+2 (STRIND er082)
-2
(+)
Administrative burdens on startups (OECD) (-)
-1
Regulatory and administrative opacity (OECD) (-)
-2
Starting a Business - time, procedure, cost, capital requirement, average rank (World bank doing business) (-)
-1
Dealing with Licenses - procedures, time, cost, average rank (World bank doing business) (-)
-2
Registering Property - procedures, time, cost, average rank (World bank doing business) (-)
0
Paying Taxes average rank (World bank doing business) (-)
-1
Enforcing Contracts - procedures, time, cost, average rank (World bank doing business) (-)
0
Closing a Business time, cost, recovery rate average rank (World bank doing business) (-)
-2
Propensity towards entrepreneurship - Total population considering self-employment (in %) (European Commission, Flash Eurobarometer)
-2 (+)
Aggregate score on level
-1
Number of individual indicators with negative performance
8
Growth
-2
2
0
-1
-1
-1
-1
-1
5
Example: R&D, innovation
and ICT
R&D, innovation policies and ICT
Level
-2
Summary Innovation Index 2006
-1
High-tech exports - Exports of high technology products as a share of total exports
-1
Gross domestic expenditure on R&D (GERD) - Percentage of GDP
-1
Gross domestic expenditure on R&D (GERD) by source of funds - industry - Percentage of GDP
-1
Gross domestic expenditure on R&D (GERD) by source of funds - government - Percentage of GDP
-2
Gross domestic expenditure on R&D (GERD) by source of funds - abroad - Percentage of GDP
-2
Science and technology graduates - total - Tertiary graduates in science and technology per 1000 of population aged 20-29
-2
Patent applications to the European Patent Office (EPO) - Number of applications per million inhabitants
Patents granded by the United States Patent and Trademark Office (USPTO) - Number of patents per million inhabitants
-1
Venture capital investments - early stage - Percentage of GDP
-2
Venture capital investments - expansion & replacement - Percentage of GDP
-2
Level of Internet access - households - Percentage of households who have Internet access at home
0
ICT expenditure - IT - Expenditure on Information Technology as a percentage of GDP
1
ICT expenditure - Telecommunications - Expenditure on Telecommunications Technology as a percentage of GDP
-1
E-commerce via Internet - Percentage of enterprises' total turnover from e-commerce via Internet
-2
E-government on-line availability - Percentage of online availability of 20 basic public services
E-government usage by individuals - total - Percentage of individuals aged 16 to 74 using the Internet for interaction with public authorities -1
1
E-government usage by enterprises - Percentage of enterprises which use the Internet for interaction with public authorities
-2
Broadband penetration rate - Number of broadband lines subscribed in percentage of the population
-1
Aggregate score on level
15
Number of individual indicators with negative performance
Growth
2
2
2
2
2
2
2
2
-1
0
2
0
2
1
1
Method III - Modelling the
impact of structural
refroms
Simulations included in 2007 APR
Reform area
Modelling approach
Coverage
Labour and product
markets
QUEST II
EU15
econometric estimates 13 OECD countries[1]
Effective retirement
age
ECFIN ageing model
EU15 aggregate
Internal Market
QUEST II
EU25 aggregate
Administrative burden
QUEST III
WorldScan
EU15 aggregate
EU25
Increased R&D
spending
QUEST III
WorldScan
EU15 aggregate
EU25
[1]
Austria, Belgium, Denmark, Finland, France, Germany, Ireland, Italy, Netherlands, Portugal, Spain, Sweden, United Kingdom.
Main results
Reform area
Input into models
Results
Labour and product
markets
Changes in policy variables (e.g.
tax wedge, taxes, unemployment
benefits and regulation of PMs)
since 1995.
2% increase in EU15 GDP
and 1.4 p.p. reduction in
structural unemployment
Effective retirement
age
One year increase in retirement
age
1.5% increase in EU15
GDP by 2025 and 2.5% by
2050
Enlarged Internal
Market
Gains from greater integration
and enlargement (e.g. higher
competition and more trade)
over 1992-2006
2.2 increase in EU25 GDP
and 1.4 increase in
employment
Administrative
burden
25% reduction in administrative
burden by 2010
1.3% increase in GDP by
2025
Increased R&D
spending
Reaching national R&D
expenditure targets by 2010
2.6 to 4.4% increase in
EU25 GDP (25-30% due
to spillovers)