Paris, November 22, 2007 Beyond negative integration: towards a EU-wide minimum guaranteed income scheme? Tito Boeri Università Bocconi and Fondazione Rodolfo Debenedetti
Mar 27, 2015
Paris, November 22, 2007
Beyond negative integration:towards a EU-wide minimum guaranteed income scheme?
Tito Boeri
Università Bocconi andFondazione Rodolfo Debenedetti
EU Constitutional Treaty
• New draft: reference to “stronger co-ordination” in the social policy area
• What does it mean? What should it mean?
• Can co-ordination help in dealing with the pressures coming from globalisation?
The pressures coming from globalisation
Globalisation increases the risk people losing their jobs
0
10
20
30
40
50
agree not agree dk
Eurobarometer, 2001
Globalisation increases the gap between the rich and the poor
0
10
20
30
40
50
60
agree not agree dk
Hourly gross wage: 0,50€
Gross wage: 108,14€ Taxes and
contributions: 10,32€
Meals 11,39€
Net wage
83,92€
The pay slip of Mr. Huan Guoj
200 hours per month
Globalisation increases the employment costs of redistribution
∆ E
∆ E
w
D0
D1
S
…unless there is increase in efficiency
∆ E
∆ E
w
D0
D1
D’1
S
…or in labor supply
∆ E
wS
S1
D1
D0
∆ E
Policies increasing labor supply
• Activation strategies– Job search assistance and tests– Job counselling– Controls and sanctions
• Financial Incentives– Employment Conditional Incentives (ECI)– Wage Subsidies for low-wage employees (or
social security deductions)
• Selective migration
A EU-wide approach?
No evidence of economies of scale in social
protection
Large differences in the size of
redistributive policies and in values-preferences
Policies decentralised: decided and implemented at national level
…BUT immigration is different: it needs a strong co-ordination at
supranational level!
Moreover problem of migration and welfare access
% of respondents stating that “minority groups exploit the system of social welfare”
EU 12 EU 1542
43
44
45
46
47
48
49
50
51
52
EU12 EU 15
Migrants are over-represented among beneficiaries of several transfers..
Odds Ratios
00.5
11.5
22.5
3
Pensio
n
Unemplo
ymen
t Ben
efits
Family
Allo
wance
s
Sickne
ss B
enef
its
Educatio
n Allo
wance
s
Social
Ass
ista
nce
Housing A
llowan
ces
Note: (MB/M) / (NB/N)
A EU-wide safety net?
• EU-wide minimum welfare floor (Atkinson (1998)) preventing a “race to the bottom” in non-contributory transfers
• The devil is in the details: need to harmonise in absolute levels, adjusted to PPP
• Costs (not too large actually: MGI at 430 Euros for singles costs about 30 billion, ½ of the CAP)
• If provided as citizenship right, necessary to coordinate migration policies as well.
Back to the Constitutional Treaty
• Case for allocating tasks to supra-national authorities in presence of important spillover effects
• Migration is a case in point• Activation and ECIs should be
carried out at the national level; experimentation. Open method of co-ordination
Summarising
• We need co-ompetition across social policy systems. Learning from experiments in policies mobilising labour supply.
• Coordination in migration policies.
• and a European social welfare minima like a citizenship income