Russian sanctions against Moldova. Minor effects, major potential. OSW COMMENTARY No. 152, 2014-11-06

Russia has been Moldova’s main trade partner and Russian capital has accounted for a large part of its foreign investments, dominating in the energy and the banking sectors. Moreover, Russia has been a key job market for Moldovan expatriate workers. In the economic sphere, this is making Moldova unilaterally dependent on Russia. Moscow has been attempting to exploit this situation to put pressure on the authorities in Chișinău for quite some time. In recent months Russia has increasingly used instruments for exerting economic pressure on Moldova, as a means of responding to the current authorities’ pro-Western policy. A key element of this policy was Moldova’s signing on 27 June 2014 of the Association Agreement with the EU (which came into force on 1 September 2014). Over the last year, Russia has implemented a number of import restrictions on Moldovan goods. The aim of the Russian actions is to fuel social disappointment, and ultimately – to prevent the pro-European coalition currently in power from winning the parliamentary elections scheduled for 30 November 2014. Another aim might be to convince the Moldovan authorities to suspend the implementation of the Association Agreement – a plan openly put forward by Vladimir Putin during the CIS summit in Minsk on 10 October 2014. So far, however, the Russian economic sanctions have failed to produce the expected results. Support for the pro-European parties has been high, and there is little chance that the pro-Russian groups might achieve a parliamentary majority. It is not inconceivable, then, that in the upcoming months Moscow might decide to resort to other, more potent instruments of economic pressure such as speculation on the financial market, carried out as part of its de facto control over the banking sector. Another possibility is further tightening of trade restrictions, issuing expatriate workers from Russia or using Moldova’s dependence on Russian energy.

The growth challenge for Europe and the EMU. CHALLENGE EUROPE Issue 22- Challenges and new beginnings: Priorities for the EU's new leadership, September 2014.

The European economy is slowly and painfully striving to reemerge from the last six years of crisis. It was a crisis of enormous intensity and contagiousness, given the unprecedented depth of global financial integration combined with the systemic flaws in the EMU architecture. And it is not over, as the high levels of unemployment and the growing divergence between Member States testify. The threat of fragmentation is imminent as ever: fragmentation between euro-ins and euro-outs; fragmentation between North and South; fragmentation within societies, with increasing income inequality and a growing number of, what used to be, the middle class population slipping through the social safety net and below poverty lines. Policies of front-loaded fiscal consolidation have left welfare states in economically weaker countries severely underfunded. According to OECD data, the number of people living in households without any income from work has doubled in Greece, Ireland and Spain, and has risen by 20% or more in Estonia, Italy, Latvia, Portugal, and Slovenia. Fertility rates have dropped further since the crisis, deepening the demographic and fiscal challenges of ageing. There are long-term implications from these deteriorating trends, regarding people's long-term health, education and upward mobility from low-income families. It is also highly likely that many of the people unemployed for a long period of time will never again be able to gain proper access to the job market and build a normal career track. The enduring effects of the crisis risk creating vicious cycles of low growth, high debt levels, austerity, declining productivity, and stagnation. These developments carry heavy implications for the future growth prospects of the European economies, for future prosperity, and for the sustainability of pension systems and welfare states. They must be urgently reversed.

A tale of oversimplification and deregulation: the mainstream approach to labour market segmentation and the recent responses to the crisis in European countries. WP C.S.D.L.E. “Massimo D’Antona”.INT – 102/2013

After advocating flexibilization of non-standard work contracts for many years, some European and international institutions and several policy makers now indicate the standard employment relationship and its regulation as a cause of segmentation between the labour market of "guaranteed" insiders, employed under permanent contracts with effective protection against unfair dismissal, and the market of the “not-guaranteed” outsiders, working with non-standard contracts. Reforms of employment legislation are therefore being promoted and approved in different countries, allegedly aiming to balance the legal protection afforded to standard and non-standard workers. This article firstly argues that this approach is flawed as it oversimplifies reasons of segmentation as it concentrates on an “insiders-outsiders” discourse that cannot easily be transplanted in continental Europe. After reviewing current legislative changes in Italy, Spain and Portugal, it is then argued that lawmakers are focused on “deregulation” rather than “balancing protection” when approving recent reforms. Finally, the mainstream approach to segmentation and some of its derivative proposals, such as calls to introduce a “single permanent contract”, are called into question, as they seem to neglect the essential role of job protection in underpinning the effectiveness of fundamental and constitutional rights at the workplace.

Continuous Off-the-Job Training in East Germany After Unification: Preliminary Results of an Evaluation of the Effects for Individual Workers, CES Germany & Europe Working Papers, No. 05.9, 19 July, 1995

Retraining the labor force to match the demands of a modem economy is seen as an important task during the transition process from a centrally-planned to a market economy. This need was particularly pressing in East Germany, because the transition process has proceeded much faster than in the rest of Eastern Europe. Therefore, substantial resources have been devoted to this purpose. This paper analyzes the impact of continuous off-the-job training in East Germany from the point of view of individuals who were part of the labor force before German unification in 1990. It tries to answer questions about the average gains from participating in a specific type of training. Typical outcomes considered to measure those gains are income, employment status, job security, and expected future changes in job position. The methodology used for the evaluation is the potential outcome approach to causality. This approach has received considerable attention in the statistical literature over the last fifteen years and it has recently been rediscovered by the econometric literature as well. It is adapted to allow for important permanent and transitory shocks, such as unemployment, which influence the decision to participate in the training as well as future labor market outcomes. The empirical part is based on the first four waves of the Socio-Economic Panel (GSOEP)-East (1990-1993). This panel data set has the advantage that the fourth wave contains a special survey on continuous training and that it allows keeping track of individual behavior on a monthly, respectively yearly, basis. The econometric analysis focuses on off-the-job training courses that began after unification and were completed not later than in early 1993. Although it is obviously too early to evaluate the long-term implications, the results suggest that there are no positive effects in the short run.

The Importance of Foreign Language Skills in the Labour Markets of Central and Eastern Europe: An assessment based on data from online job portals. CEPS Special Report No. 129/January 2016

In a globalised world, knowledge of foreign languages is an important skill. Especially in Europe, with its 24 official languages and its countless regional and minority languages, foreign language skills are a key asset in the labour market. Earlier research shows that over half of the EU27 population is able to speak at least one foreign language, but there is substantial national variation. This study is devoted to a group of countries known as the Visegrad Four, which comprises the Czech Republic, Hungary, Poland and Slovakia. Although the supply of foreign language skills in these countries appears to be well-documented, less is known about the demand side. In this study, we therefore examine the demand for foreign language skills on the Visegrad labour markets, using information extracted from online job portals. We find that English is the most requested foreign language in the region, and the demand for English language skills appears to go up as occupations become increasingly complex. Despite the cultural, historical and economic ties with their German-speaking neighbours, German is the second-most-in-demand foreign language in the region. Interestingly, in this case there is no clear link with the complexity of an occupation. Other languages, such as French, Spanish and Russian, are hardly requested. These findings have important policy implications with regards to the education and training offered in schools, universities and job centres.

The Labour Market in Spain: Problems, Challenges and Future Trends. Policy Brief #2015/01

Spain’s economy was hit particularly hard by the financial crisis. After severe austerity measures have been implemented in recent years to contain a strong public debt increase, first signs of economic recovery are emerging. However, as SIM Europe results show, very few measures to soften the social consequences have been enacted. Spain scores second to last in the ‘Labour Market Access’ dimension of the Social Justice Index 2015, with the greatest deterioration among all EU countries compared to 2008. According to the Reform Barometer 2015, the quality of labour market reforms in Spain ranks last in the EU. With economic recovery gaining momentum, high priority should be given to ameliorating labour market access through higher education improvements, professional training, investments into R&D and promotion of high added-value industries.

The Digital Market for Local Services: A one-night stand for workers? An example from the on-demand economy. CEPS Special Report, No. 133/April 2016

This case study provides a snapshot of the dynamics in the digital market for locally provided personal services. Based on a case study for a Belgium platform with 14,113 identified workers and 9,459 posted tasks, the findings suggest that the current intermediation is inefficient. Only a limited share of the tasks posted on the platform are being completed, whereas the characteristics of the not-completed tasks are fairly limited. Moreover, just a small share of the workers participating in the platform is actually performing the completed tasks. Their average earnings per hour are in most cases above the minimum wage and even above the median wage in the offline market. At the present time, however, the limited earnings for individual workers prevent this mode of working from becoming an alternative to a conventional job. In addition to the standard determinants of workers’ earnings (e.g. gender, age, occupation, etc.), the characteristics and evaluation mechanism of the platform have a large influence on the distribution of tasks and earnings.

The Impact of the Collaborative Economy on the Labour Market. CEPS Special Report No. 138, June 2016

The digitalisation of work is creating new ways of intermediating work, with for example platforms intermediating work between individuals online. These so-called online collaborative platforms have the potential to fundamentally change the labour market, but for the moment, with an estimated 100,000 active workers or 0.05% of total employees in the EU, they do not seem to have a large impact on the offline/traditional labour market or the create/destroy impetus. This paper analyses the direct and indirect impact of the collaborative economy on the labour market. The findings, based on a collection of empirical studies, suggest that most workers do not earn their main income through online platforms and they obtain earnings from different types of platforms. Earnings from physical/local services are, in general, substantially higher than virtual services that can potentially be delivered globally. The paper also assesses the conditions, number of hours worked and employment status, compared to the offline labour market, and finds shows large differences across types of workers, platforms, and countries. The emergence of online collaborative platforms poses some challenges and opportunities for policy-makers. On the one hand, they may be challenged to ensure minimum remuneration, fair evaluation, tax declaration and social protection, and reduction of the administrative burden. On the other hand, the new technologies may provide opportunities to (partially) liberate some professional services and activate specific groups at a distance away from the labour market. This paper was commissioned by the European Commission as input into its European Agenda for the Collaborative Economy. This Ag