How Resilient are Social Security Systems in Europe in Times of Crisis?

 POLICY BRIEFS           
  • The Role of Income Support Systems as Income Stabilizers in Times of Crisis 

  • NATO Defense Spending in 2023: Implications One Year After Russia’s Invasion of Ukraine 

  • The Effect of Subject-Specific Teacher Qualifications on Student Science Achievement 

  • A Targeted Golden Rule for Public Investments? 

  • The Global Impact of the U.S. Inflation Reduction Act 

  • Minimum Income Support Systems as Elements of Crisis Resilience in Europe 

  • The German Economic Model – Decline or Second Economic Miracle? 

  • Mercantilist Policies for Climate Action? 

  • How Sanctions Work - And Which Goals They Fail to Achieve 

  • Who Should Bear the Burden of Increasing Fiscal Pressure? 

  • Discrimination of Sexual Minorities in Emerging Markets 

  • Measuring Remote Work Using a Large Language Model 

 POLICY BRIEFS           

The Role of Income Support Systems as Income Stabilizers in Times of Crisis

How do minimum income support schemes contribute to the stabilization of disposable incomes in times of crisis in Europe? Results from a new simulation of unemployment shocks hitting labor markets suggest that the tax-transfer system overall contributes to income stabilization in periods of crises. Overall, the social security systems in Scandinavia and Western Europe buffer their citizens’ income losses most comprehensively. In Southern and Eastern European countries, however, crises lead to significantly higher income losses. 

NATO Defense Spending in 2023: Implications One Year After Russia’s Invasion of Ukraine

Russia has attacked Ukraine and threatens those states that in the past had been part of Moscow’s sphere of influence. Many of them are now member states of NATO. Since the ability to defend against an aggressor does not come for free, defense spending will be on the agenda at the NATO Summit in July 2023. NATO Secretary General Jens Stoltenberg has already expressed his expectation that all member states no longer see the 2% target as a mere ambition. This Policy Brief presents first results for the expected defense spending of the NATO members and the candidate country Sweden in 2023. 

The Effect of Subject-Specific Teacher Qualifications on Student Science Achievement

What makes a good teacher? General teacher qualifications, such as education level or advanced degrees, tend to be poor predictors of teacher quality. Instead, some studies have shown that subject-specific qualifications predict teacher quality better. An evaluation of international student data shows that schoolchildren achieve better science grades when their teacher has specialist training in the subject they teach. 

A Targeted Golden Rule for Public Investments?

The EU faces the challenge to combine large and sustained investments to promote the transition towards a green, digital, and competitive Europe while maintaining fiscal sustainability. Based on a comprehensive literature review on the effects of fiscal rules and investment clauses on public finances, this in-depth analysis provides some guidance how higher public investments can be achieved by a targeted golden rule without harming fiscal sustainability in the EU fiscal framework.  

The Global Impact of the U.S. Inflation Reduction Act

The US Inflation Reduction Act (IRA) promotes renewable energy and contributes to climate protection, but also offers generous tax credits and subsidies to incentivize production in the United States. An international survey among leading economic experts worldwide gives insights on the expected effect of the US Inflation reduction act on the global economy. On a global scale, experts are little concerned about negative effects of the IRA on their domestic economy, estimating both the impact on national output and the risk of business outflows to be low. However, there is large heterogeneity in the potential impact of the IRA across countries and regions. 

Minimum Income Support Systems as Elements of Crisis Resilience in Europe

The Policy Reports analyses the role of social policies in different European welfare states regarding minimum income protection and active inclusion. It finds consistent differences in terms of crisis resilience across countries and welfare state types. In general, Nordic and Continental European welfare states with strong upstream systems and minimum income support show better outcomes in core socio-economic outcomes such as poverty and exclusion risks.  

The German Economic Model – Decline or Second Economic Miracle?

What is the future of Germany’s economic model? The Russian attack on Ukraine has triggered a debate about the further development of prosperity in Germany. There are growing concerns about economic decline of Germany as Europe’s economic powerhouse. Rising energy prices, the high costs of climate protection, an increase in geopolitical conflicts, and a shrinking workforce could put an end to the successes of the German economic model. Optimists counter that the growing global interest in clean technologies ought to benefit the capabilities of German companies. Is Germany facing economic decline or a second economic miracle? 

Mercantilist Policies for Climate Action?

The fight against climate change requires a combination of global efforts, including investments in renewable energy systems and other climate-neutral technologies. Given positive externalities and incomplete carbon pricing, there is a compelling argument for governments to support the production of such clean energy technologies. However, the location of production of these technologies should at best be determined by the comparative advantages of individual economies and is of secondary importance for global climate action. 

Policy Debate

How Sanctions Work - And Which Goals They Fail to Achieve

Economic Policy and its Impact

Who Should Bear the Burden of Increasing Fiscal Pressure?

The Covid-19 pandemic has had a profound impact on the global economy, leaving us with a significant stock of additional debt. A widespread view is that the burden of servicing this debt should be distributed fairly. How should the optimal degree of income tax progression change if governments need to raise more revenues? 

Institutions Across the World

Discrimination of Sexual Minorities in Emerging Markets

Recent advances in rights for lesbians, gay men, and bisexual individuals have varied substantially across the world. The article provides new evidence on the determinants of support for safeguarding sexual minorities in Serbia, Turkey, and Ukraine – three emerging markets with some of the lowest rates of social acceptance of sexual minorities in Europe. Providing information about the economic cost of discrimination increases support for measures to safeguard equal employment opportunities for lesbians and gays. 

Big Data-Based Economic Insights

Measuring Remote Work Using a Large Language Model

Covid-19 propelled an enormous uptake in hybrid and fully remote work. Over time, it has become clear that this shift will endure long after the initial forcing event. There are few modern precedents for such an abrupt, large-scale shift in working arrangements. The article analyzes the full text of hundreds of millions of job postings in five English-speaking countries. It applies a state-of-the-art Large Language Model (LLM) to analyze the text and determine whether the job allows remote/hybrid work. 
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