WIFO Working Papers

Discussion papers by WIFO staff, consultants and guests – As of 2006 available online only – Free download

WIFO Working Papers are not peer reviewed and are not necessarily based on a coordinated position of WIFO. The authors were informed about the Guidelines for Good Scientific Practice of the Austrian Agency for Research Integrity (ÖAWI), in particular with regard to the documentation of all elements necessary for the replicability of the results.

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WIFO Working Papers, 2022, (648), 18 pages
Online since: 31.08.2022 0:00
The Russian invasion of Ukraine has caused disruptions in international trade and highlighted the dependency of small open economies in Europe on imports, especially of energy. These events may have changed Europeans' attitude towards globalization. We study two waves of representative population surveys conducted in Austria, one right before the Russian invasion and the other two months later. Our unique dataset allows us to assess changes in the Austrian public's attitudes towards globalization and import dependency as a short-term reaction to economic turbulences and geopolitical upheaval at the onset of war in Europe. We show that two months after the invasion, anti-globalization sentiment in general has not spread, but that people have become more concerned about strategic external dependencies, especially in energy imports, suggesting that citizens' attitudes regarding globalization are differentiated.
In a randomised controlled trial in Austria, lower caseloads in public employment offices led to more meetings of the unemployed with their caseworkers, more job offers, more program assignments, and more sanctions for noncompliance with job search requirements. More intensive counselling led to shorter unemployment episodes due to faster job entry, but also to more exits from the labour force in the two years following treatment. We find effects for different subgroups of unemployed. We find no effects on wages. A cost-benefit analysis suggests that lower caseloads not only shorten the duration of unemployment but are also cost-effective.
WIFO Working Papers, 2022, (646), 44 pages
Commissioned by: European Commission
Online since: 08.04.2022 0:00
As governments spend unprecedented sums of public money on pandemic related rescue and recovery measures, while humankind is facing mounting long-term challenges – and above all the climate crisis –, the question whether and to what extent COVID-19 recovery programmes contribute to countries' commitments to a sustainability oriented recovery is gaining increasing urgency. We argue that overcoming the economic and social impacts of the pandemic require deeper structural changes than a return to a more or less business as usual scenario to limit the impacts of climate change. Recovery packages should therefore be designed in such a way as to avoid fossil lock-in effects and take into account that the social and technological actions taken today will unfold their effects in the climate system with a time lag only. An interesting question in this context is the effectiveness of green recovery measures not only with regard to environmental objectives, but also concerning conventional economic indicators, which are traditionally summarised under the heading "multiplier effects". Evaluations of the economic effects of green recovery measures, e.g. those implemented during the global financial crisis, are in short supply. Most of the existing empirical analyses have an ex ante focus, while ex post evaluations are scarce. This paper aims at contributing to this research gap by providing a review of the empirical evidence of the macroeconomic effects of green recovery measures.
Alexander Krenek, Margit Schratzenstaller, Klaus Grünberger (WIFO), Andreas Thiemann
WIFO Working Papers, 2022, (645), 103 pages
Commissioned by: European Commission
Online since: 13.04.2022 0:00
Based on the most recent data from the ECB's Household Finance and Consumption Survey, the project models the future household-level wealth distribution in five selected EU member countries (Finland, France, Germany, Ireland, and Italy) to derive inheritances based on different demographic and wealth projection scenarios. On this basis, various inheritance tax scenarios are simulated to estimate potential inheritance tax revenues for a projection period of 30 years. Our results indicate that multiple factors coincide in favouring a growing revenue potential for inheritance taxation in the medium-term. Wealth accumulation and appreciation lead to higher average wealth levels. The shift of the baby boomer generation out of the labour force results in an increase of the older population both in absolute and relative terms. Eventually, this will lead to a rise in the number of deaths and the number of inheritances. Additionally, low fertility rates lead to a reduction of the average number of successors and thereby decrease the importance of exemption thresholds, as individual inheritances become larger. Overall, our simulations show that the future revenue potential of inheritance taxes may be substantial. In practice, it can be expected that the theoretical revenue potential demonstrated by our simulations will be reduced by tax avoidance, real responses, and general equilibrium effects on other taxes. A review of the empirical evidence shows that behavioural responses to inheritance taxes are less pronounced compared to a net wealth tax.
WIFO Working Papers, 2022, (644), 38 pages
Online since: 03.03.2022 7:00
With ever-increasing political tensions between China and Russia on one side and the EU and the USA on the other, it only seems a matter of time until protectionist policies cause a decoupling of global value chains. This paper uses a computable general equilibrium trade model calibrated with the latest version of the GTAP database to simulate the effect of doubling non-tariff barriers – both unilateral and reciprocal – between the two blocks on trade and welfare. Imposing trade barriers almost completely eliminates bilateral imports. In addition, changes in price levels lead to higher imports and lower exports of the imposing country group from and to the rest of the world. The targeted country group increases exports to the rest of the world and reduces imports. Welfare falls in all countries involved, suggesting that governments should strive to cooperate rather than turning away from each other. By imposing a trade war on Russia, the political West could inflict severe damage on the Russian economy because of the latter's smaller relative size.
WIFO Working Papers, 2022, (643), 48 pages
Online since: 18.02.2022 0:00
We quantify the partial and general equilibrium effects of GATT/WTO membership on trade and welfare. Using an extensive database covering manufacturing trade for 186 countries over the period 1980-2016, we find that the average impact of GATT/WTO membership on trade among member countries is large, positive, and significant. We contribute to the literature by estimating country-specific estimates and find them to vary widely across the countries in our sample with poorer members benefitting more. Using these estimates, we simulate the general equilibrium effects of GATT/WTO on welfare, which are sizable and heterogeneous across members, and relatively small for non-member countries. We show that countries not experiencing positive trade effects from joining GATT/WTO can still gain in terms of welfare, due to lower import prices and higher export demand.
Dimensionen von Digitalisierung der Sozialpolitik in Österreich. Ein konzeptioneller Diskussionsbeitrag (Dimensions of Digitalisation of Social Policy in Austria. A Conceptual Contribution to the Discussion)
WIFO Working Papers, 2022, (642), 10 pages
Online since: 14.02.2022 0:00
Das vorliegende Paper beschäftigt sich mit der Frage, welche Bedeutung die Digitalisierung für Planung, Praxis und Wirksamkeit von Sozialpolitik in Österreich hat. Auf Basis facheinschlägiger Literatur werden bestimmte Dimensionen von Digitalisierung und ihre Relevanz für die Sozialpolitik besprochen. Im Vergleich zu anderen Beiträgen, die sich mit Reaktionsmöglichkeiten des Wohlfahrtsstaates auf Digitalisierung in der Produktion und auf dem Arbeitsmarkt beschäftigen, liegt der Fokus auch auf Digitalisierungsformen im (wohlfahrts-)staatlichen Handeln selbst und wie diese Dimensionen mit sozialer Ungleichheit zusammenhängen. Vier Dimensionen werden besprochen: 1. Digitalisierung von Amtswegen und politischer Partizipation, 2. Daten und Politikevaluierung, 3. Kommunikation, 4. Reaktionsmöglichkeiten des Wohlfahrtsstaates auf die Digitalisierung der Produktion. Der Beitrag schließt mit ausgewählten Vorschlägen für zukünftige Forschung.
WIFO Working Papers, 2022, (641), 35 pages
Supported by: Anniversary Fund of the Oesterreichische Nationalbank
Online since: 11.01.2022 0:00
Emission trading has been the key instrument in the EU's climate policy since its introduction in 2005. According to economic literature, emissions trading should ensure the achievement of a given reduction target at the lowest possible costs, by equalising marginal abatement costs of the installations covered. According to previous studies, however, only a limited number of companies have engaged in trading pointing at a limited economic efficiency of the scheme. This paper contributes to the growing body of empirical literature on allowance transactions by providing an analysis for Austria. For this purpose, two approaches are combined – a quantitative analysis of data on allowance transactions from the EUTL and a survey among Austrian firms in the EU ETS on their trading behaviour, motivations, and strategies. Our results show that allowance transactions have increased over time and that Austrian companies in the EU ETS tend to mainly acquire allowances in the market. The majority of Austrian companies reported compliance as the main motive for purchasing allowances. However, they stated that the time horizon of buying allowances for compliance purposes has been rather short so far, but some Austrian ETS participants intend to emphasise earlier purchases and consider a longer period in their purchasing strategy. Moreover, our analysis shows that it is a limited number of large companies (trading companies and large energy suppliers) that is very active in the market. Market actors have gotten accustomed to this new market for emissions over the past 16 years which is illustrated by increasing quantities and volumes traded. Nevertheless, for Austrian companies there is some potential for adapting their trading strategies in order to incorporate the future challenges, primarily for those companies not used to trading on international energy or resource markets.
WIFO Working Papers, 2021, (640), 30 pages
Commissioned by: Klima- und Energiefonds
Study by: Austrian Institute of Economic Research – International Institute for Applied Systems Analysis – Vienna University of Economics and Business Administration
Online since: 17.12.2021 13:00
A comprehensive restructuring of economies and a massive increase of investments in climate-friendly technologies, infrastructures, and R&D is needed for reaching the Paris targets. The EU has launched a process for greening the financial sector emphasising the need for new instruments and financial market regulation for aligning investments to sustainability. This chapter summarises research on two topics: firstly, what are the main political strategies, especially at EU level, to support green finance, and secondly, which are the key supporting factors, barriers and actors for an upscaling of green investments? To assess the relevance of green finance in the financial market and climate policy (with focus on Austria) an expert survey was conducted. It delivers insights on promising policies and strategies for fostering the growth of green finance. Conclusions can be drawn on instruments (like carbon pricing) that should be integrated in post-COVID-19 stimulus packages to ensure a Paris-aligned recovery.
WIFO Working Papers, 2021, (639), 51 pages
Online since: 09.12.2021 0:00
In a seminal paper Graetz and Michaels (2018) find that robots increase labor productivity and TFP, lower output prices and adversely affect the employment share of low-skilled labor. We demonstrate that these effects are heavily influenced by the sample composition and argue that focusing on manufacturing and mining sectors mitigates unobserved heterogeneity and is more coherent with an identification strategy that rests on instruments that do not vary by industries. In sum, this leads to more plausible results regarding the overall economic effects of robotization, whereby the focus on robotizing industries leads to a sizable drop of the productivity effects, halving the effect size for labor productivity and insignificant price effects. The most pronounced consequences from the sample choice occur for labor market outcomes, where significant negative employment effects become insignificant and positive wage effects are reversed into the opposite. We show that controlling for demographic workforce characteristics is essential for obtaining significant labor productivity effects and leads to the negative effects of robots on wages. Additionally, investigating only robotizing sectors does not corroborate skill-biased technological change due to robotization, but rather, indicates towards labor market polarization. Finally, we document a non-monotonicity in one of the instruments, which calls for caution in the use of that instrument.