EconPol Policy Reports

EconPol Policy Reports conduct comprehensive economic analysis on current European economic and fiscal policy issues, fostering a deeper understanding of European economic development and the implications of policy measures. The reports provide valuable insights into policy scenarios and the impact of economic policies, facilitating informed public discussions and evidence-based policy making. EconPol‘s mission is to contribute to the crafting of effective economic policy in the face of the rapidly evolving challenges faced by the European economies and their global partners and to provide well-founded advice to European policymakers.

Supporting Firm Innovation and R&D: What is the Optimal Policy Mix?

İrem Güçeri (EconPol Europe, Oxford University), Marko Köthenbürger (EconPol Europe, ETH Zurich), Martin Simmler (EconPol Europe, Oxford University)

Existing literature suggests that firm R&D support policies stimulate private R&D within a country and that in most cases, the positive impact of government support is stronger on smaller firms. Recent evidence also indicates that some of the policy instruments, such as patent box policies, are tools that multinationals use to lower their total tax bill through profit shifting. In this policy report, İrem Güçeri (EconPol Europe, Oxford University), Marko Köthenbürger (EconPol Europe, ETH Zurich) and Martin Simmler (EconPol Europe, Oxford University) find that the most prevalent support policies are effective in fostering private enterprise sector R&D and small and young firms seem to benefit the most from both public R&D and R&D tax incentives.

... Details

Self-selection and Motivations of Emigrants from a Welfare State

Ilpo Kauppinen (EconPol Europe, VATT Institute for Economic Research), Till Nikolka (EconPol Europe, ifo Institute, LMU Munich), Panu Poutvaara (EconPol Europe, ifo Institute, LMU Munich)

This report analyzes self-selection and motivations of emigrants from Denmark, one of the richest and most redistributive welfare states in the world. Authors Ilpo Kauppinen (EconPol Europe, VATT Institute for Economic Research), Till Nikolka (EconPol Europe, ifo Institute, LMU Munich) and Panu Poutvaara (EconPol Europe, ifo Institute, LMU Munich) present evidence on how migrants are self-selected with respect to their education, earnings, and unobservable abilities, measured by residual earnings. They document main motivations of emigrants, present evidence on how couples have self-selected into emigration, how couples decided on their emigration and how the partners’ labor force participation changed after emigration. Finally, they ask whether emigrants differ from non-migrants in terms of their attitudes towards redistribution.

... Details

Structural Reforms and Income Inequality: Who Benefits From Market-Oriented Reforms?

Klaus Gründler (EconPol Europe, ifo Institute, LMU Munich), Niklas Potrafke (EconPol Europe, ifo Institute, LMU Munich), Timo Wochner (LMU Munich)

Do structural reforms benefit individual groups? Klaus Gründler (EconPol Europe, ifo Institute, LMU Munich), Niklas Potrafke (EconPol Europe, ifo Institute, LMU Munich) and Timo Wochner (LMU Munich) employed macro and micro data to investigate whether the income of low-income citizens increased to a smaller extent than the income of high-income citizens. The results suggest not: market oriented reforms were positively correlated with income shares of low-income citizens, and low-income citizens are less likely to support market-oriented reforms than high-income citizens. It is conceivable that low income citizens have misperceptions about how they benefit from market-oriented reforms.

... Details

Is Immigration Necessary for Italy? Is it Desirable?

Luigi Bonatti (EconPol Europe, University of Trento)

Italy, together with other Southern European countries, represents an anomaly in the history of modern migration. In the last three decades, the country has attracted a substantial number of migrants while its employment rate has remained structurally low because of a persistently high unemployment rate and its population’s low participation to the labor market. This article illustrates some facts in order to escape from the obtuse dispute between anti-immigrant propagandists on one side and a rhetoric of immigrant reception on the other. It shows what this anomaly implies and suggests possible policy options for dealing with it.

... Details

A Primer on Developing European Public Goods

Clemens Fuest, Jean Pisani-Ferry

The EU has mostly been defined as a provider of economic integration amongst participating member states. Its cornerstones have been the removal of obstacles to cross-border flows of goods, services, labour and capital, and the development of common policies that ensure the smooth functioning of an integrated market, be it for trade, competition, infrastructures or consumer protection, to name the main ones only. Even the euro was initially conceived as a natural complement to the internal market and as a trigger for further integration. This policy report from Clemens Fuest (ifo Institute, LMU, EconPol) and Jean Pisani-Ferry (EUI, Bruegel) discusses the case for enhanced provision of European public goods and makes a number of proposals for concrete steps and initiatives.

... Details