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This study has been prepared for the European Commission (Framework Contract B2/Entr/05/091) and is composed of five sections. The first three sections all deal with assessing the role of skills in the European economy Section 1 undertakes a number of econometric exercises to analyse the relationship between skills and two indicators of competitiveness, productivity growth and exports. This and the next section represent new research effort in that a disaggregated database (by NACE 2-digit industries) has been used to analyse this relationship. Section 2 extends the analysis towards the relationship between skills and economic growth by analysing the role of skills in the context of a growth accounting exercise where skill changes are separately identified in affecting the 'quality of labour services' and hence the contribution of labour input to value added. Again the analysis exploits the detailed, disaggregated database made recently available through the EU KLEMS project. Section 3 presents an overview of skill compositional changes in different groups of EU economies. We distinguish between EU Northern economies, EU South (composed of Greece, Portugal and Spain) and the New Member States (restricted to only four countries, the Czech Republic, Hungary, Slovakia and Slovenia, for data reasons). In this section aggregate, economy-wide skill upgrading is decomposed into 'within' and 'between' (industry) changes in skill composition and the results show interesting patterns distinguished for more advanced and catching-up types of economies. The last two sections move away from the topic of reviewing the impact of skills on economic performance and the tracking of changing skill demands in EU economies. In section 4, a literature overview is provided of empirical studies regarding returns to skill acquisition through schooling and training. The idea behind this section is that returns to schooling and training reflect both skill shortages and also provide the basis for decisions with regard to skill acquisition. Finally, section 5 presents a country-by-country overview of how information is gathered with regard to skill gaps in different EU economies. The methodologies and sources for assessing skill shortages are reviewed. These are a necessary ingredient into any attempt of designing policies in relation to skill planning and the design of schooling and training institutions. The section closes with a recommendation on useful extension of European-wide vacancy statistics.

This report is concerned with analysing, for eight EU Member States with lagging regions, the main structural reforms carried out over the past five to ten years, essentially those which are relevant for the European Structural and Investment Funds. Furthermore it provides an overview of the remaining structural reforms needed, including to the system and operation of governance, and their relevance for lagging regions. The identification of the remaining reforms needed is based on a detailed analysis of the main indicators that can be identified to assess the situation in each of the eight countries concerned and, so far as possible, in the lagging regions in them. An additional concern is to gauge the effects of the reforms carried out with a particular focus on the lagging regions. The first subsection of the report briefly sets out the structural reforms covered by the analysis and the rationale for choosing these from among all those subject to the European Council's Country-Specific Recommendations. It then presents for each of the eight countries and the lagging regions the main structural imbalances in the form of a concise summary bringing out the main points emerging from the detailed analysis for each country. The second sub-section assesses the effects of labour market reforms on investment, productivity and competitiveness. A third sub-section examines the business environment in each of the countries and the lagging regions within these as well as the structure of enterprises and business demography, and attempts to relate this to the business environment. It also considers the reforms which have been carried out over recent years which have been aimed at improving the situation in which businesses operate.

This book summarizes four years of research on social inclusion and income distribution across the European Union carried out in the framework of the European Observatory on the Social Situation and Demography, which has been established by the Directorate–General for Employment, Social Affairs and Equal Oppor tunities of the European Commission. It gives an overview of the comparative informationthat is available for the EU Member States on income distribution, poverty and its causes, access to benefits and social services and material deprivation. It also offers a insight into the potential of European surveys and notably the EUStatistics on Income and Living Conditions (EU-SILC), the main survey used for the analysis presented in this publication.

This report presents the findings of three case studies of lagging regions in the EU to deepen the findings of wiiw Research Reports 421 to 423. The three (NUTS 2) case study regions are the Italian Campania, the Portuguese Norte and the Romanian Nord-Est region. While each of these regions faces specific challenges due to their economic, social and geographic characteristics, they are at the same time to some extent representative of other EU regions that share similar characteristics and/or challenges. Each case study covers the economic development in the respective region, highlighting the main strengths and weaknesses in the region's performance. Furthermore, each case study identifies the major, region-specific, causes of the observed developments. By focusing on those causes, each analysis develops a region-specific storyline on the success and failures in the regions' economic development. Finally, each case study derives conclusions based on the above analysis. These conclusions should be indicative of potential development opportunities for each region and the necessary policy measures to overcome existing challenges in order to exploit these opportunities.

The European Union has reached a critical juncture in dealing with the fallout from the 2008 financial meltdown that started in the USA and spread to engulf banks and the financial markets of Europe. The ensuing recession or stagnation in many member countries was compounded by austerity programs undertaken by national governments, in some cases as a pre-condition for rescue from potential bankruptcy. Europe's leaders took initiatives to strengthen financial systems but have been unable to secure a significant recovery of the European economy or avert growing divergences between member states in GDP per capita, unemployment rates and external-account balances. This memorandum written by participants of a 3-year research project on Europe and the world's socio-economic future to 2030 (the AUGUR project) discusses possible ways out of prolonged stagnation and low growth. The current trajectory can trigger renewed crises of political-economic sclerosis in Europe and progressively undermine social standards and well-being. Such an outcome would strengthen the forces that aim to dismantle European integration. An overriding priority must be given to rebalancing the distribution of growth between different parts of Europe. Policies in R&D, competition and external trade must be reassessed with these objectives in view. EU finance for social programmes in lower-income countries is needed to support improvements in education, health and other public services that benefit social cohesion thereby securing the foundation for higher productivity and competitiveness.