Skip to main content

Trade, inequality and European unemployment

Objective



The rise of inequalities is unquestionably one of the most decisive factors shaping the political agendas of most OECD countries. In the US, rising wage inequalities are at the heart of debates concerning the role of minimum wages on the one hand, and of tax policies on the other. In Europe, the problem is manifested in workers' inequality in their access to jobs - unemployment - and the debate concerns the degree of flexibility needed to circumvent this inequality. Yet after almost two decades analysing this crucial topic, we still lack a clear understanding of the main causes and policy implications of this (joint) phenomenon. This proposal aims to bring together the disparate strands of research on this topic, foster collaboration betweer groups of researchers who tended in the past to work in relative isolation and so to develop a consensus on the analytical frameworks which are appropriate to analyse the relationship between the process of globalization and the twin in-equalities of incomes and of access to jobs, two key factors affecting social exclusion.
The proposed thematic network will address two key aspects of the TSER Work Programme: the relationship between employment and technical change (area I.2.1), and developing new analytical approaches for identifying key mechanisms (such as unemployment and income inequalities) which produce social exclusion (area III.2).

The network will help develop a coherent framework for the analysis of the causes of unemployment, which takes into account factors such as international trade, market integration and globalization, and `skills-biased' technological change. It will also contribute to our understanding of the patterns of unemployment and social exclusion, by bringing together researchers from the fields of international trade and labour economics with specialists in income distribution, focusing in particular on the relationship between inequality in the distribution of wages and the distribution of incomes across households. This relationship seems to be an important factor in explaining the very different ways in which inequality manifests itself in Europe and the US. This has implications for policies designed to address inequality and exclusion in Europe: policy prescriptions based on the US experience may be seriously flawed if applied within Europe. Finally we will attempt to integrate this analysis of trade, inequality and unemployment with newly emerging techniques within the field of political economy, attempting to clarify the relationship between attitudes towards redistribution and the political feasibility of policies designed to address the problems of inequality, social exclusion and unemployment, whether through redistribution or reforms to the operation of labour markets.

The proposed thematic network will bring together, over a 3-year period, researchers based at 5 leading European research institutes as well researchers associated with the Centre for Economic Policy Research (CEPR). The activities of the network will be guided by a scientific committee and coordinated by CEPR. Each participating institution will be responsible for organizing one of the network's 6 workshops, which will focus on the particular expertise of that institution. Papers presented at the workshops will be circulated in the Centre's Discussion Paper Series and the workshop will be reported in its Bulletin and on its Web site. The network will be concluded with a conference in the third year, organized by CEPR, which will summarize and synthesize its achievements. We envisage that the papers presented at the conference will be published in the CEPR conference volume series.

Funding Scheme

CSC - Cost-sharing contracts

Coordinator

CENTRE FOR ECONOMIC POLICY RESEARCH
Address
Goswell Road 90-98
EC1V 7RR London
United Kingdom

Participants (5)

Athens Institute of Economic Policy Studies
Greece
Address
30,Sina Street
106 72 Athens
CENTRE D'ETUDES PROSPECTIVES D'ECONOMIE MATHEMATIQUE APPLIQUEES A LA PLANIFICATION
France
Address
Rue Du Chevaleret 142
75013 Paris
CENTRO DE ESTUDIOS MONETARIOS Y FINANCIEROS
Spain
Address
Casado Del Alisal 5
Madrid
CENTRO STUDI LUCA D'AGLIANO
Italy
Address
Via Principe Amedeo 34
10123 Torino (Turin)
Ecole des Hautes Etudes en Sciences Sociales
France
Address
45,Rue Des Saint Pères
75270 Paris