Aging workforce and labour market trends in the European Union

In the last 15 years, impressive developments have take place in the labour market both in the EU and Central and Eastern European (CEE) countries. The shrinking of the labour force and declining rates of participation are common both to the old and new EU Member States, due to the sharp decline in labour demand and to specific demographic trends. Although situations vary in each CEE transition economy, there are some common characteristics. The remarkable fall in GDP at the beginning of the transition period, caused by privatization and restructuring, was accompanied by a sudden decline in employment. After an analysis of labour market developments and trends in the old and new EU Member States, this paper concentrates on the development of employment policies. The aim of new dynamic and innovative employment policies is rapid job-creation and solving the unemployment problem in flexible and challenging economic and labour market conditions. As the effects of institutions and policies on labour market performance are country- and time-specific in CEE countries and Western Europe, a comparative cross-country analysis is presented. Dealing with dynamic employment policies in EU Member States, some positive examples are examined as the lessons and policy recommendations for future development in CEE countries. The conclusion of analysis is that only an integrated policy approach can solve the problem of structural unemployment caused by a mismatch between labour supply and demand.

PurposeThe authors’ aim is to establish the variance of youth welfare citizenship regimes in Central and Eastern Europe (CEE) and to revisit the applicability of the regime approach to the emerging welfare regimes (EWRs).Design/methodology/approachThe empirical analysis follows the descriptive case study strategy aiming to discover diversity of youth welfare citizenship patterns. The case selection is made within the CEE country group, which includes countries in Central Europe, the Baltics, Eastern Europe and Southeast Europe, all sharing the communist past. The subdivision of these countries in reference to the welfare states can be made via the European Union (EU) membership based on the assumption that EU social policy frameworks and recommendations have an important effect on domestic policies. We included countries which are in the EU, i.e., with a similar political and economic transition path. There were three waves of accession to the EU in CEE countries. In the first wave (2004), all the Baltic countries, Czech Republic, Slovakia, Poland, Hungary and Slovenia joined. In the second wave (2007), Romania and Bulgaria joined. Finally, Croatia joined the EU in 2013. Altogether 11 CEE countries are the EU members today, the remaining CEE countries are non-EU members and thus are excluded from the current research. Those countries which are part of the EU share similarities in social and economic reforms during the pre-accession period and after in order to reach a comparatively similar system with other member states. So, in terms of casing strategy these six countries can be named as emerging welfare regimes (EWRs) evolving transformations across different public policy areas. Handpicking of six countries out of 11 relies on the assumption that the Anglo-Saxon welfare system characteristics are more evident in the Baltic countries (Aidukaite, 2019; Aidukaite et al., 2020; Ainsaar et al., 2020; Rajevska and Rajevska, 2020) and Slovenia, while in Bulgaria and Croatia certain outcomes reflect the Bismarckian principles of social security (Hrast and Rakar, 2020; Stoilova and Krasteva, 2020; Dobrotić, 2020). This brings important variety into our analysis logic. Last but not least, we juxtapose six CEE EWR countries under analysis with six mature welfare regime countries representing different welfare regime types. Those mature welfare regime countries (Finland, Sweden, France, Germany, Italy, UK) are not an explicit object of the study but help to put analysed CEE EWR cases into larger context and thus, reflect upon theoretical claims of the welfare regime literature.FindingsThe authors can confirm that the EWR countries can be rather well explained by the welfare citizenship typology and complement the existing knowledge on youth welfare regime typology clusters in the Western Europe. Estonia is clustered close to the Nordic countries, whereas Latvia, Lithuania, Croatia and Slovenia are close to the Bismarckian welfare model despite rather flexible, non-restricted educational path, universal child and student support. Bulgaria is an outlier; however, it is clustered together with mature Mediterranean welfare regimes. Former intact welfare regime clusters are becoming more diverse. The authors’ findings confirm that there is no any intact cluster of the “post-communist” welfare regime and Eastern European countries are today “on move”.Research limitations/implicationsAltogether 11 CEE countries are the EU members today. The remaining CEE countries are non-EU members and thus are excluded from the current research. Those countries which are part of the EU share similarities in social and economic reforms during the pre-accession period and after in order to reach a comparatively similar system with other member states. At least one CEE country was chosen based on existing theoretical knowledge on the welfare regime typology (Anglo Saxon, Beveridgean, Bismarckian) for the Post-communist country groups.Practical implicationsIn the social citizenship dimension we dropped social assistance schemes and tax-relief indices and included poverty risk and housing measures. Youth poverty together with housing showed rather clear distinction between familialized and individualised countries and thus, made the typology stronger. In the economic dimension the preliminary picture was much fuzzier, mainly due to the comprehensive education in the region and intervention of the EU in domestic ALMPs (and VET) reforms. The authors added a new indicator (pro-youth orientation of ALMP) in order better to capture youth-sensitivity of policy.Social implicationsThe authors included a working poverty measure (in-work poverty rate) in order to reflect labour market insecurity as an increasing concern. Yet, the analysis results were still mixed and new indicators did not help locating the regime types.Originality/valueIn order to improve the validity of the youth welfare citizenship regime economic dimension, Chevalier's (2020) model may also be worth revisiting. The authors argue that this dichotomy is not sufficient, because inclusive type can have orientation towards general skills or occupational skills (i.e. monitored or enabling citizenship clusters), which is currently ignored. Chevalier (2020) furthermore associates inclusive economic citizenship with “coordinated market economies” (referring to Hall and Soskice, 2001), which seems hardly hold validity in the Nordic and at least some CEE countries.

The countries of Central and Eastern Europe (CEE) have much to gain from implementing policies that increase investment, support the development of human capital, and promote the legal, regulatory, and policy framework needed for market mechanisms to function. The faster they implement such changes, the faster they will bridge the income gap between them and the countries of the European Union - and the more likely their chances of successful integration. Joining the European Union (EU) is perhaps the key political and economic objective of Central and Eastern European (CEE) countries as they approach the 21st century. But how successful the CEE countries are in achieving this goal depends not only on how well and quickly they adapt their legal and regulatory systems to EU requirements but on how well and quickly they bridge the wide income gaps between CEE and EU countries. Using a model and cross-section data to develop estimates, Barbone and Zalduendo investigate how appropriate structural policies adopted before and after accession to the EU can help CEE countries bridge this income gap. They have much to gain from implementing policies that increase investment, support the development of human capital, and promote the legal, regulatory, and policy framework needed for market mechanisms to function. The faster they implement such changes, the faster they will bridge the income gap between them and the EU countries - and the more likely their accession to the EU will be successful. This paper - a product of Country Department II, Europe and Central Asia - is part of a larger effort in the department to examine issues related to accession to EU by Central and Eastern European countries. Luca Barbone may be contacted at lbarbone@worldbank.org.

PurposeThe purpose of this study is to modify the gravity model to identify the main determinants of the European Union (EU) bank lending to the Central and Eastern Europe (CEE) countries during 1994-2012.Design/methodology/approachThis study uses both two-stage least squares and dynamic generalized method of moments to estimate the modified gravity model.FindingsThis study finds that the CEE countries with more developed stock markets have received the higher EU bank lending inflows. The EU banks have greater access to additional financing in the stock markets. Second, the higher stock market difference between the CEE and EU countries has boosted the EU bank lending. Compared to the developed EU stock markets, the less developed CEE stock markets have become more favorable to the EU banks seeking to earn higher profits.Research limitations/implicationsThe CEE countries can further boost the EU bank lending inflows through deepening capital liberalization. They should facilitate easy foreign bank entry by reducing excessive bank legislations and regulations. Moreover, they can promote the EU bank lending through substantial EU bank integration. This can accelerate the major bank reform which would facilitate better bank supervision and regulations.Originality/valueMost previous studies have primarily used the macroeconomic and institutional factors to explain the EU bank lending. In contrast, this study explores the growing importance of the CEE financial development and bilateral trade in explaining the EU bank lending.

The aim of this paper is to analyze how different models of transformation in Central and Eastern Europe (CEE) and the Commonwealth of Independent States (CIS) increased or decreased the risk of being stuck in the middle-income trap (MIT). The key finding is that the CEE and CIS countries are, from a definition point of view, not materially at risk of the MIT as out of nine selected MIT definitions, none of the CEE or CIS countries were “stuck” more than three times. At the same time, the CEE countries are more at risk of falling into the MIT than the CIS countries; however this is because the CIS is a poorer region and is not near the lower MIT thresholds. The CEE countries had a better start at the beginning of the transformation and on average implemented a better set of transformation models; however, some CEE countries are now struggling to permanently join the advanced countries and CIS countries are, on average, far behind that. The literature review on transformation models and the analysis of the “jumps” in the World Bank ranking classification suggest that while the MIT is not a concern for CEE or CIS countries, in order to speed up convergence, CIS countries might consider more shocks and consistently following free market related approaches. The study fills a gap in the literature on the MIT which has thoroughly analyzed the Asian and Latin American countries but has provided little analysis of the CEE and CIS countries.

This paper presents an attempt at establishing an association between crime levels and prison populations across European countries. We observe that the situation in Central and Eastern European countries differs distinctly from the rest of Europe. Building on this, we offer justification that is methodologically based on correlations and regressions of country incarceration rates on crime rates, with reference to governance indicators. Our cross-sectional analysis uses data on crime and prisoner rates by offence from Eurostat and SPACE for the year 2018. The paper’s empirical analysis is preceded by a discussion of the challenges faced when attempting to compare crime between countries in Europe. A review of research focused on relationships between incarceration and crime follows, with the emphasis on the deterrence effect and the prison paradox. Typically, this stream of research uses microdata covering a single country or limited to a smaller geographic area. International comparisons are rare, and are usually based on time series and trend analyses. The quantitative approach applied here is based on recognizing two clusters of countries: the Central and Eastern European (CEE) cluster and the Western European (WE) cluster. We show that the observation of higher prisoner rates and lower crime rates for CEE countries is confirmed with regression analysis. Our study encompasses four types of offences: assault, rape, robbery, and theft. The final section of the paper presents an attempt to incorporate Worldwide Governance Indicators into the analysis of the association between incarceration and crime rates. The results confirm that crime rates in WE countries are distinctly higher than in CEE countries, while incarceration rates in WE are significantly lower than in CEE countries. We think this is due to a higher percentage of crimes being reported and the greater accuracy of police statistics in WE countries. The prison population in each country is largely determined by its criminal and penal policies, which differ substantially between CEE and WE countries (e.g., in terms of frequency of imposing prison sentences and the length of imprisonment). These tendencies result in higher incarceration rates in CEE countries, despite lower crime rates when compared to WE countries.

Twenty years ago, on 1 May 2004, ten new states joined the European Union (EU), eight of which from Central and Eastern Europe (CEE). This round of enlargement quickly earned the name 'big bang' enlargement, as it was the largest, in terms of the number of new countries and population in the history of the EU, as well as the most challenging expansion of the EU. This was a historic enlargement in many aspects, and an ambitious process of legal, political, and economic transformation, which was widely celebrated as a success. With enlargement, the EU actively promoted democracy, open and competitive market economy, human rights and the rule of law. Hence, citizens' expectations in CEE countries were high for creating economic improvement, better governance and impartial institutions, and strengthening the process of democratization in the post-communist era. 1 Eastward enlargement was significant both in the history of those Central and Eastern European countries (CEECs) that shared a common historical legacy in the past, and joined the EU in 2004 and in 2007 and 2013, and in the history of EU integration, with substantial impact on EU law and politics. The CEECs' accession period (1993-2004) has generally been seen as a massive process of Europeanization that was effective because of these countries' strong desire to 'return to Europe', which accorded the EU unprecedented power to influence their legal, political and economic development. 2 The CEECs' adoption of EU rules was governed by strong EU conditionality, 3 which acted as a crucial incentive for implementing the necessary legal, political and economic changes. Accordingly, the CEECs' desire to transition to an ideal model of liberal democracy and market economy according to Western standards accompanied and influenced their market, constitutional and institutional reforms. 4

Educational disparities in disability-free life expectancy across Europe: A focus on the East-West gaps from a gender perspective

Despite better accessibility of the effective lipid-lowering therapies, only about 20% of patients at very high cardiovascular risk achieve the low-density lipoprotein cholesterol (LDL-C) goals. There is a large disparity between European countries with worse results observed for the Central and Eastern Europe (CEE) patients. One of the main reasons for this ineffectiveness is therapeutic inertia related to the limited access to appropriate therapy and suitable dosage intensity. Thus, we aimed to compare the differences in physicians' therapeutic decisions on alirocumab dose selection, and factors affecting these in CEE countries vs. other countries included in the ODYSSEY APPRISE study. ODYSSEY APPRISE was a prospective, single-arm, phase 3b open-label (≥12 weeks to ≤30 months) study with alirocumab. Patients received 75 or 150 mg of alirocumab every 2 weeks, with dose adjustment during the study based on physician's judgment. The CEE group in the study included Czechia, Greece, Hungary, Poland, Romania, Slovakia, and Slovenia, which we compared with the other nine European countries (Austria, Belgium, Denmark, Finland, France, Germany, Italy, Spain, and Switzerland) plus Canada. A total of 921 patients on alirocumab were involved [modified intention-to-treat (mITT) analysis], including 114 (12.4%) subjects from CEE countries. Therapy in CEE vs. other countries was numerically more frequently started with lower alirocumab dose (75 mg) at the first visit (74.6 vs. 68%, p = 0.16). Since week 36, the higher dose was predominantly used in CEE patients (150 mg dose in 51.6% patients), which was maintained by the end of the study. Altogether, alirocumab dose was significantly more often increased by CEE physicians (54.1 vs. 39.9%, p = 0.013). Therefore, more patients achieved LDL-C goal at the end of the study (<55 mg/dl/1.4 mmol/L and 50% reduction of LDL-C: 32.5% vs. 28.8%). The only factor significantly influencing the decision on dose of alirocumab was LDL-C level for both countries' groups (CEE: 199.2 vs. 175.3 mg/dl; p = 0.019; other: 205.9 vs. 171.6 mg/dl; p < 0.001, for 150 and 75 mg of alirocumab, respectively) which was also confirmed in multivariable analysis (OR = 1.10; 95% CI: 1.07-1.13). Despite larger unmet needs and regional disparities in LDL-C targets achievement in CEE countries, more physicians in this region tend to use the higher dose of alirocumab, they are more prone to increase the dose, which is associated with a higher proportion of patients reaching LDL-C goals. The only factor that significantly influences decision whether to increase or decrease the dose of alirocumab is LDL-C level.

Before the transition the principal development objective for the animal production sector in the Central and Eastern European (CEE) countries was the attainment of national self-sufficiency, and, is some countries, export orientation. Increasing production costs and the low productivity were compensated through subsides. During the first years of transition, the number of animals declined from 20 to 80 percent, due to the drastic reduction of demand (elimination of subsides and family revenue decrease), disruption of traditional markets, rise of the cost of production. The establishment of a large number of small private farms have led to the creation of specific production systems in a number of countries. Countries which have retained large production units are confronted with needs to update technology in accordance with new requirements (market, environment). Following the request of made by CEE countries, EAAP has established a Task Force on CEE countries. The Task Force has organised seven meetings (round tables, workshops and seminars) in the period 1991-96. Some experts from CEE and Western Europe participated at these events. Over 1400 pages of studies and proceedings have been published. The Task Force has completed its tasks in 1996, when a Contact Group on CEE countries has been established to identify the major policy issues influencing animal production in CEE, to prepare and organise meetings to address these policy questions, and to promote an increase in effectiveness of linkages between CEE and Western European countries.

Purpose: to assess the impact of traditional forms of non-cash payments on economic growth measured by real GDP per capita in Central and Eastern Europe (CEE) and Western Europe. Design/methodology/approach: the following research hypothesis was formulated: the impact of non-cash payments on economic growth is stronger in Central and Eastern European countries than in Western European countries. The research hypothesis was verified based on empirical analysis of panel data for the years 2005-2018 for the CEE and Western European countries. The following 10 CEECs participated in the research: Slovakia, Bulgaria, Poland, Czech Republic, Hungary, Romania, Lithuania, Latvia, Estonia, Slovenia and eight countries from Western Europe: France, Austria, Belgium, Germany, Netherlands, Luxembourg, Ireland, the United Kingdom. Findings: in CEECs the value of transactions with payment cards had the largest impact on economic growth – an increase in the value of transactions using this payment instrument by one percentage point causes real GDP per capita increase by 0,23 percentage point. On the other hand, an increase in the value of transactions using credit transfers by one percentage point increased real GDP per capita by 0,10 percentage point. the direct debit transactions had a positive impact on the explained variable in the CEE countries – real GDP growth by 0,06 percentage point. Research limitations/implications: The results of the empirical study, likewise in literature, indicated a significant, positive impact of non-cash payments on real GDP per capita growth. The impact on real GDP per capita is only effective for the CEE countries. In Western European countries the level of non-cash transactions reached a certain level of saturation. That was a proved by ineffective iterations performed on various functional forms of the econometric model on panel data. In the group of CEE countries, the value of transactions with payment cards has the greatest impact on real GDP per capita. Originality/value: analysis of current literature on the impact of non-cash payments on economic growth and an empirical analysis. Keywords: household financial management, non-cash turnover, economic growth, real GDP per capita, public management. Category of the paper: Research paper.

The article deals with the impact of the emerging new division of labour between Western and Central and Eastern Europe (CEE) on work and employment, both in the Western and CEE countries. Major points of discussion will be the hypothesis of a `hollowingout' of the Western European auto industry, and the hypothesis of a `regime flight'; that is, the claim that companies use CEE locations to escape the collectively regulated work models of Western Europe. The article draws from our own empirical research, including company case-studies in Western and Eastern auto plants, and on statistical analysis. The main conclusions are: in CEE countries, an upgrading process of production sites can be observed, which challenges the view of an emerging `high end/low end' division of labour between the West and the East.While relocation has led to some losses of low-skill jobs in Western Europe, the overall effect of the expansion of the automotive industry to CEE on growth and employment in Western Europe was positive.The impact of low-cost component imports from CEE countries has increased the competitiveness of the German firms, which are by far the main investor in CEE countries. Our case-studies reveal no trend towards regime flight from Western European work models, but management threats of relocation have become commonplace and have led to a renegotiation of work models in Western European countries. In CEE countries, the work models of automobile companies more and more are oriented at a high-road path.This development is fostered by the companies' responses to the problems of migration and the increasing shortage of skilled labour.

The dramatic changes in overall mode of life experienced since 1989 by the people in Central and Eastern Europe (CEE) provides a good opportunity to study the aging processes and the status of the elderly. In the 1980s, CEE countries were already at an advanced stage of demographic aging of their populations. The first years of the period of transition from totalitarianism to democracy and market economies were marked with an abrupt but varying degree of economic and social deterioration in CEE. This was followed by partial improvement. Earlier, in the late 1960s and 1970s, mortality rates had increased along with a stagnation and decrease of life expectancy in CEE. This contrasted with the steady improvement in the European Union (EU) during the 1970s and 1980s. By 1989, there already was a striking gap in life expectancy between eastern and western Europe, revealing the existence of an East-West health divide. The most important health problems contributing to greater mortality in CEE proved to be cardiovascular and alcohol-related diseases as well as violence and injury. Suicide rates also were found higher among the (elderly) population in the countries of CEE and Russia compared with the West. The gap was most expressed among the men. The reasons for deterioration in health are complex. There is evidence that negative economic and social changes can lead to psychosocial stress and to unhealthy behaviors. The morale of the elderly people in transition was affected and many-sided. The Sofia study described here has revealed positive as well as negative personal attitudes toward the changes in life. Feelings of liberation, hope, and new perspectives were reported along with sentiments of disappointment, pessimism, and fear. In sum, transition processes have run unevenly in different countries and have had differing impacts on individuals. Nevertheless, general trends toward improving the economic, psychosocial, and health aspects of the elderly are recently prevailing.

Over the last decade, a significant share of the labour force in the countries of Central and Eastern Europe (CEE) has been exposed to work spells abroad followed by return migration. Although there is a growing literature on CEE return migration, most previous studies are country‐specific and no enquiry for the region as a whole has been undertaken so far. In this paper, we attempt to fill this gap. We collate data from the European Union (EU) Labour Force Survey (EU‐LFS) for a cross‐country analysis of return migration in CEE countries. The aim of the paper is threefold. We first review the available evidence and literature on the characteristics and labour market behaviour of return migrants in CEE countries. Second, we provide a descriptive analysis of recent returnees using EU‐LFS data. Third, we specifically analyse the income premia for work experience abroad, the occupational choices and the selectivity patterns of recent returnees in CEE countries from a cross‐country perspective. Consistent with previous results, we find that the average income premia for work abroad range between 10 per cent and 45 per cent. Migrants are less likely to actively participate in the labour market upon return. They are, however, more likely to choose self‐employment rather than dependent employment upon return. Recent migrants are also more likely to experience spells of unemployment in the first year after their return. The latter two findings are reversed, however, when adjusting for the unobserved heterogeneity of return migrants and for regional effects.

Core objectives of European common market integration are convergence and economic growth, but these are hampered by redundancy, and value chain asymmetries. The challenge is how to harmonize labor division to reach global competitiveness, meanwhile bridging productivity differences across the EU. We develop a bipartite network approach to trace pairwise co-specialization by applying the revealed comparative advantage method within and between the EU15 and Central and Eastern European (CEE). This approach assesses redundancies and the division of labor in the EU at the level of industries and countries. We find significant co-specialization among CEE countries but a diverging specialization between EU15 and CEE. Productivity increases in those CEE industries that have co-specialized with other CEE countries after EU accession, while co-specialization across CEE and EU15 countries is less related to productivity growth. These results show that a division of sectoral specialization can lead to productivity convergence between EU15 and CEE countries.