Fellowship Opportunity: Call for expression of interest

2017 Marie Sklodowska-Curie Action Individual Fellowships

The Economics Department at the Organisation for Economic Co-operation and Development (OECD) is looking to continue its tradition of evidence based policy-research by inviting postdoctoral researchers to apply jointly with the Economics Department for the European Commission's MSCA Individual Fellowship

The Fellowship provides the opportunity for experienced researchers to enhance their careers in an enriching, international environment. The mission of the OECD is to promote policies that will improve the economic and social well-being of people around the world. The Economics Department of the OECD aims to enhance economic performance in member and selected non-member countries through sound evidence-based and innovative policy advice. It deals with a wide array of policy areas including macro-economic management, with a strong emphasis on structural policy issues. Its key products are OECD Country Surveys, the twice-yearly Economic Outlook, Going for Growth and research and policy papers on a wide range of topics. The Department is a co-convener of the Global Productivity Forum, the OECD Fiscal Network and support work related to COP 21 and Sustainable Development Goals (SDGs). It cooperates with other Directorates of the OECD on horizontal organisation-wide projects particularly to the New Approaches to Economic Challenges, and the Inclusive Growth Initiative. The Department’s policy advice is derived from a variety of sources, including country surveillance, cross-country benchmarking and evidence derived from empirical research.

The OECD Economics department undertakes in-depth studies on approaches to identify current economic challenges and to offer policy oriented solutions. Research areas in the context of the MSCA fellowship of particular interest for the Economics department are listed below.

The successful candidate will work under the supervision of a Senior Economist at the OECD Economics Department.

Application information

Requirements and how to apply

Expressions of interest should be submitted to the Economics Department OECD by 30 June 2017. The deadline for final submission to the European Commission is 14 September 2017. 

All expressions of interest must meet the eligibility criteria of the scheme.

  • Candidates must be in possession of a doctoral degree at the deadline for the submission of proposals (14/09/2017).
  • Eligible researchers can be of any nationality and must not have resided or carried out their main activity (work, studies, etc.) in France for more than 12 months in the 3 years immediately before the call deadline.

Application materials should include the following:

  • Research proposal summary of no more than three pages. The proposal should outline the main research question, research context, research methods and a brief project plan following the guidelines established in the call for expression of interest.
  • CV
  • Cover letter, outlining how the proposed research links to OECD Economics Department areas of research outlined in the call for expression of interest.

Please submit your application on-line through this link.

Expressions of interest will be evaluated based on the quality of the research proposal and the EC’s eligibility criteria. Decisions will be communicated by 10 July 2017.

The selected candidates will be supported in the development of their project proposals that must be submitted to the European Commission by September 14th, 2017, 17.00 CET.

Public sector productivity

Bridging the international comparability gap

Productivity is fundamental to raising living standards, as boosting productivity is the engine of economic growth in most OECD countries and beyond, as population growth is limited and populations are ageing.  Most work on productivity developments has focused on the private sector (e.g., OECD, 2015), although the productivity of the public sector is also crucial, given its sizable share of GDP. However, productivity measurement of public services poses difficult challenges, in part because they are usually provided in a non-market environment, and the incentives that drive private sector productivity growth are curtailed. Improving public sector productivity is high on many countries’ political agendas as a way to improve public sector performance and enhance societal well-being.  

Public sector productivity cannot be understood without the ability to measure it, which requires good quality and, if possible, internationally comparable input and output measures of public sector services. Although considerable progress has been made in the last two decades in the measurement of public sector inputs and outputs in the framework of the System of National Accounts by National Statistical Offices, by governments and their departments, national productivity commissions as well as international organisations, there is still much to be advanced. A recent OECD survey of countries found that collection of data for measuring public sector productivity has made most progress in the areas of education and health care services. Benchmarking of policy-making bodies such as fiscal and regulatory bodies has made more progress, through comparisons of institutional designs, although systematic comparisons are also preliminary.

In light of the call for further work on productivity in the OECD, there is a strong interest in advancing on public sector productivity comparisons. A study on public sector productivity could include:

  • Developing a methodological approach that would allow for quality-adjusted comparisons of one or more public sector deliveries areas across countries, using available data. Apply this approach to the comparison of heterogeneous public sector activities or regulatory activities, including at different levels of government.

 

  • Advancing a cost accounting system that would help to separate out input costs from various outputs. Apply this system in partnership with one or more governments to benchmark public services. This could include working with national productivity commissions to create a set of new measurement tools, which could be applied at the sub-national level to improve practices.

 

  • Using administrative microdata for a set of public sector services or outputs, from a supranational agency such as Eurostat or selected countries, to examine the performance of specific (likely local) public sector organisations/entities, applying matched models to differentiate the quality and scope of activities.

 

  • Designing an institutional benchmarking methodology that would allow for the early evaluation of the structure and tasks of new national Productivity Boards that will carry out diagnosis and analysis of productivity and competitiveness developments and independent analysis of policy challenges, which have been mandated for all Eurozone countries by early 2018 through a European Council Recommendation. This could follow the approaches that have been applied for comparison of the institutional design and independence of fiscal and regulatory bodies by the OECD.

 

Digitalisation, contingent employment and productivity

Trends and policy challenges

Digitalisation and non-standard employment are high on the agenda of OECD and its member countries. Digitalisation may lead to an increase in non-traditional forms of employment, including the use of independent contractors and part-time, temporary, seasonal, and leased workers (i.e. contingent employment). A recent trend is the rise of smart applications and other online technologies such as internet platforms operated by businesses allowing workers to provide services to customers on demand. Contingent employment combines some features of self-employment, such as control of working hours and the choice of business by workers, with features of traditional employment, such as the reliance of the business on contingent workers for its core activity and the control of prices charged to customers by the business.

The use of online technologies and smart applications may also raise productivity by leading to a more efficient use of resources. For instance, smart applications may more efficiently match service suppliers to customers, leading to a better use of capacity. The flexibility inherent to contingent employment and the associated churning may also lead to a more efficient allocation of workers across sectors and tasks, thereby facilitating the process of creative destruction. But the contingent nature of the work relationship may reduce incentives for the employer to provide training compared to a traditional employer-employee relationship, thus weighing on productivity.

The Marie Curie project would dig deeper into the question how non-standard employment affects productivity through the lens of the recent phenomenon of employment contracted through internet platforms. The work could comprise case studies with microdata from Internet platforms or “big data” sources from one or several countries.

Research proposals of no more than one page should contain one or several of the following elements:

  • Develop a conceptual framework that illustrates the channels through which smart applications/internet platforms and contingent work may affect productivity and that yields empirically testable hypotheses. Test these hypotheses with appropriate data.
  • Based on one or several case studies of smart applications/internet platforms, quantify the effects of digitalisation and contingent work on productivity, for example based on data from an Internet platform and/or data downloadable from the web.
  • Explore the role of non-standard employment, such as temporary agency work or outsourcing to self-employed workers on productivity based on microdata from countries with a large share of such workers (such as the Netherlands or Poland).

Long-term effects of Brexit

Long-term effects of Brexit on the European Union

The UK voted to exit the European Union ("Brexit") and its likely impact on the EU has triggered a lot of attention. The OECD is at the forefront of this debate and has carried out analysis that provides some illustrative estimates of the possible impact on real GDP in the UK and other European economies in the near term by 2020 and in the longer term by 2030 (Kierzenkowski et al. 2016 and OECD, 2016). The results indicate that Brexit will generate a large negative shock to the UK economy across all horizons. The analysis also indicates that Brexit will impact other European countries in the near term through higher uncertainty and the exchange rate channel, which will lead to more difficult financial conditions and reduce output in the other European economies by around 1 percentage point by 2020.

The aim of the Marie Curie project would be to build on this recent OECD work by investigating from an analytical point of view the long term impact of Brexit on the EU and individual EU countries, with a view to produce policy relevant analysis to enrich Country Surveys, including the Euro Area and the European Union Surveys, and other Economic Department flagship publications like the Economic Outlook.

Research proposals should contain one or several of the following elements:

  • A description of the conceptual framework that illustrates the channels through which Brexit will affect the EU and that yields empirically testable hypotheses. The analysis of the channels should be comprehensive and include at the minimum: 1) trade within Europe; 2) foreign direct investment, 3) financial services, 4) budget, 5) immigration. The calibration of the long-term effects of Brexit on the EU should consider a number of different scenarios and hypothesis, including a central scenario, an optimistic and a pessimistic scenario. The conceptual framework could discuss the exposures of selected member states, most notably those with a high exposure to Brexit (Ireland, Luxembourg and the Netherlands), and moderate exposure (Austria, Belgium, Denmark, Germany, Finland, France, Greece, Spain and Sweden).
  • A description of the methodological framework that will be used to assess the impacts on the EU and individual EU countries activity by 2030. The project could exploit OECD modelling tools including the National Institute's Global Econometric Model (NiGEM), OECD trade's model (METRO), used by the OECD in the analysis of the economic consequences of Brexit. As regards the baseline assumptions, the long-term growth scenarios developed by the Macroeconomic Analysis Division and discussed in Johansson et al. (2013) could be used.
  • A description of possible efforts to respond to Brexit. In the European Union, Brexit could contribute to galvanise reform efforts and trigger supply-side reforms that would make a major difference to growth, including renewed efforts to complete the Single Market, the Capital Markets Union and the Banking Union. 

Macro-econometric and DSGE Modelling Approaches

Approaches to measure the effect of structural reforms

In many OECD countries, economic growth has yet to recover the lost ground suffered in the aftermath of the financial crisis. In some of them, unemployment has been persistently high, investment rates disappoint, and productivity is extremely sluggish – a “low growth trap”. Put differently, all three sources of sustainable long-run growth under-perform. This jeopardizes societies’ ability “to make good on its promises to current and future generations – to create jobs and develop career paths for young people, to pay for health and pension commitments to old people”. (OECD, 2016). While this partly reflects the persistent weakness of demand in some cases (Mann, 2016), there are policy tools available that affect the long-run productive capacity of the economy, or potential growth.

The macro-econometric approach seeks to relate policy changes to macro-econometric outcomes using econometric estimation methods. The OECD has been heavily relying on this approach. For instance, Égert and Gal (2016) study how various product and labour market policies and regulations affect per capita income growth over different horizons and through the three supply-side channels: multi-factor productivity (MFP), capital deepening and employment.

The macro-econometric approach has been criticised on the grounds that DSGE models would be better suited for the quantification of structural reforms. Yet the appeal of DSGE models to properly take general equilibrium effects into account is to some extent overshadowed by a number of problems. First, DSGE models appear to model the adjustment path to the steady state rather than changes in the steady state due to structural reforms. Second, the way how DSGE models incorporate real world policy changes is often problematic.

There are two classes of DSGE models aimed at analysing the impact of structural reforms on economic outcomes. In the first class of models, competition is captured via mark-ups: lower (higher) mark-ups reflect more (less) intense competition. In these models, mark-ups are exogenous (see e.g. Roeger et al., 2008, 2009, 2010; European Commission 2016). Measuring mark-ups empirically is a notoriously difficult task because they have to be estimated based on complex procedures. These models usually link empirically mark-ups to product market regulation. How this link is established is far from being perfect: only a bivariate relationship between mark-ups and a measure of regulation indicator are used. This means such effects are not conditional on other policies.

In the second class of models, competition is measured through mark-ups, which are endogenous to the model: they depend on the number of competitors, which in turn is a function of entry costs (see e.g. Cacciatore et al., 2012 and 2016). Measuring entry costs empirically is easier because they can be observed directly. For instance, the OECD’s PMR indicator has a sub-component that measures general and sector-specific entry barriers. The World Bank’s Doing Business indicators also provide direct measures of economy-wide entry costs (such as the costs of starting a business). Yet these models do not use actual changes in entry costs. Instead, two commonly used scenarios are based on a unit change in entry barriers or assume a convergence scenario across countries.

The objective of this project would be to better link, compare and reconcile the macro-econometric approach with various types of DSGE models. The project would have five modules:

  • Stocktaking of the literature regarding major methodological and modelling choices and results:
    • The main features of macro-econometric models of structural reforms
    • The main features of the various classes of DSGE model
  • Analysing how structural reforms are channelled into DSGE models.
    • Looking at measuring mark-ups and entry costs
    • Looking at ways of how structural reforms could be better incorporated into DSGE models, in particular those based on exogenous mark-ups. The objective would be to assess in a more comprehensive way the empirical relationships based on which policies are incorporated into the models
  • Analysing the effects of DSGE models looking at short-run and long-run effects
  • A throughout comparison of the results obtained using the very same structural (product and labour market) reforms in the different macro-econometric and DSGE approaches
  • Reconciling the macro-econometric and DSGE models by injecting into DSGE models shocks to MFP, the capital stock and employment due to policy reforms estimated in macro-econometric models.

References

Cacciatore, M., R. Duval and G. Fiori (2012) “Short-Term Gain or Pain? A DSGE Model-Based Analysis of the Short-Term Effects of Structural Reforms in Labour and Product Markets”, OECD Economics Department Working Papers, No.984, OECD Publishing, Paris.

Cacciatore, M., R. Duval, G. Fiori and F. Ghironi (2016) “Market reforms in the time of imbalance”, Journal of Economic Dynamics & Control 72(2016) 69-93

Égert, B. and P. Gal (2016), “The quantification of structural reforms in OECD countries: a new framework”, OECD Economics Department Working Papers, No. 1354, OECD Publishing, Paris.

European Commission (2016) “The Economic Impact of Selected Structural Reform Measures in Italy, France, Spain and Portugal”, European Institutional Papers no. 23

Mann, C. L. (2016), “Deploy effective fiscal initiatives and promote inclusive trade policies to escape from the low-growth trap” ECOSCOPE, November 28.OECD (2016), “Economic Outlook”, Vol 2016(1)

Roeger W., J. Varga, J. in’t Veld (2008), “Structural reforms in the EU: a simulation-based analysis using the QUEST model with endogenous growth”, European Economy Economic Papers, No . 351.

Roeger W., J. Varga, J. in’t Veld (2009), “Modelling the Lisbon Strategy: Analysing policies to promote knowledge investment with an endogenous growth model", Comparative Economic Studies, No. 51, 520-539.

Roeger W., J. Varga, J. in’t Veld (2010), "How to close the productivity gap between the US and Europe: A quantitative assessment using a semi-endogenous growth model", European Economy Economic Papers, No. 399.

Family policies

Reducing child poverty, strengthening female labour force participation and career opportunities and increasing fertility by enabling citizens to have as many children as they desire are long-standing policy challenges in OECD countries.   Most countries use some combination of family benefits and childcare services. Broadly speaking results in the literature to date seem to indicate the following:

  • One-off transfers upon childbirth do not seem to have a significant impact on either fertility or labour force participation.
  • Regular child benefits tend to reduce child poverty and are sometimes found to have a weakly positive impact on fertility, but they also tend to have a negative impact on female labour force participation and employment and they re-inforce traditional family roles.
  • Paid parental leave has a positive impact on fertility and can have a positive impact on female employment, provided it does not significantly exceed one year. Otherwise it can delay the return to work with a negative impact on wages and career prospects. An obligation to share parts of the leave among partners can lead to evolving patterns of sharing household obligations.
  • Childcare services have a positive impact on female employment and in many studies they have also been found to have a positive impact on fertility.

These conclusions remain tentative though, and country-specific studies show heterogeneous results suggesting that the effectiveness of policies vary depending on the broader labour market and cultural context and the institutional environment. The purpose of the Marie Curie project would be to gain a better understanding of context on policy effectiveness. Research proposals would address one or several of the following features:

  • Develop new evidence on the impact of different family policies on employment, labour force participation, fertility or distribution of household work among partners as well as potentially on child birth weight.
  • Explore the role of context, such as individual or average family income at the country or regional level, the incidence of instable or low-paid work relationships or cultural variations.
  • Explore recent policy initiatives with interesting features. This could be relatively large dimensions, such as the expansion of childcare services in Germany and child benefits in Poland, or a particular starting point in terms of low fertility and female employment rates, such as childcare service expansion in Kore and Japan, or because of their specific features, such as mortgage subsidies in Hungary conditioned on the number of future children.