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In their paper “Structural change and polarisation in the rural-urban divide” Roman Römisch of the Vienna Institute for International Economic Studies and Larysa Tamilina of the Kyiv School of Economics examine how globalisation has influenced regional development.

Römisch and Tamilina analysed the changes in GDP per capita across EU regions and confirmed that urban regions, on average, enjoy a 30% higher GDP per capita at Purchasing Power Standards than rural ones. However, they also observed that rural regions have managed to narrow the gap with urban areas between 2000-2019.

“Even though the convergence process slowed after the 2008/2009 financial crisis, there was no indication of any increase in the polarisation of GDP per capita levels between rural and urban regions,” Römisch said.

The authors argue that globalisation and structural change towards manufacturing industries played a crucial role in driving the catching-up process. Regions that successfully transitioned their production structures in favour of manufacturing, especially in technology intensive sectors, benefitted in terms of faster economic growth and higher levels of economic development. These gains applied to all types of regions, irrespective of their level of urbanisation. In turn, the findings suggest that supporting the industrialisation of the EU regions, in particular the less developed ones, might be a recipe to strengthen economic convergence within the EU.

The paper highlights the crucial role of EU cohesion policy in reducing economic polarisation and facilitating growth in less developed regions. These regions face more challenging conditions compared to their urban counterparts, making them less attractive for investments. By supporting the development of transport and energy networks, broadband internet, or by investing in the upskilling and competitiveness of small and medium enterprises, the EU could increase the attractiveness of those regions. The crucial point is that this support needs to take place in a coordinated way, to tackle the many disadvantages of the less developed regions with a holistic approach.

“Although this kind of support is a challenging task, often criticised for inefficient allocation of public money, we show that EU and national regional policies can help level the playing field for the rural region. As a result, regional disparities can be tamed,” Tamilina said.

The paper shows that by addressing the unique challenges faced by rural areas, economic policies at various levels of government can play a pivotal role in fostering regional development.

Römisch, R., & Tamilina, L. (2023). Structural change and polarisation in the rural-urban divide (Deliverable 4.8). Leuven: UNTANGLED project 1001004776 – H2020.

To read the paper, click here.

Full papers or extended abstracts can be sent to Ilse Tobback at: ilse.tobback@kuleuven.be.

We invite contributions addressing the implications of technological transformation, globalisation, and demographic change on:

• Heterogeneous impacts of megatrends on labour market outcomes
• Work-related migration and skills
• Education and future skill needs, productivity growth
• (Regional / Rural-urban / EU) convergence/divergence, EU economic governance
• Developments in trade and global value chains
• Technology and human capital
• (Wage / regional) inequality
• Welfare states and social policy

Covering the combined impact of two or more driving forces – technological transformation, globalisation, and demographic change – is considered an added value.

All the detailed information is in the Call for Paper available here. Any queries can be emailed to Ilse Tobback at: ilse.tobback@kuleuven.be

The study finds, migrants take up positions in sectors such as agriculture, construction, trade, and healthcare, and often have different occupational preferences from native workers.

In their paper, “Migration and the Evolution of Skill Supply and Demand”, Ronald Bachmann, Aya Elewa, Ludivine Martin, Isabelle Rabaud, Bertrand Verheyden, and Marcel Voia delve into the disparities in education and age between migrant and native workers. The study also sheds light on how migrants are distributed across various business sectors, occupations, and regions.

“On a labour market profoundly impacted by digitalisation, globalisation, and demographic changes, it is vital to identify recent trends in labour shortages and recognise which skills are requested” says Ronald Bachman, a labour economist at the RWI – Leibniz Institute for Economic Research. “Our study suggests that migrants are more willing to undertake jobs that may be less desirable to native workers, thereby addressing labour gaps in these occupations.”

The study reveals that migrants are unevenly distributed across sectors, occupations, and regions. They are predominantly employed in medium- and low-skilled occupations, while high-skilled roles are primarily filled by native workers. However, North American migrants exhibit higher representation in high-skilled occupations, setting them apart from other migrant groups.

The study also shows that about two-thirds of migrants lack a tertiary degree, particularly those from emerging and developing countries.

In 2021, migrants from Asia and Latin America were found to be more actively involved in wholesale and retail trade, as well as other service-oriented industries; those from North America are more active in financial and professional services, as well as in public administration, education, and the health sector, while migrants from Europe and Africa are much more dispersed across all sectors.

Shortages by occupation: the challenges in Germany and France

Researchers zoomed in on the characteristics of migrant employees and demand for labour in France and Germany, the EU’s two largest economies. Their analysis shows that migrants were not evenly distributed across these countries. In France, they were primarily found in the region surrounding Paris (Ile de France), while in Germany they were concentrated in four regions: Baden Württemberg, Bayern, Nordrhein Westfalen, and Hessen.

In 2021, five high-skilled occupations, primarily in science, technology, engineering, and math (STEM) fields, were identified as facing shortages in both countries. At the top of the list of undersupplied occupations in Germany were medical doctors, followed by database and network professionals. Meanwhile, food preparation assistants and cleaning workers were the most oversupplied. In France, mathematicians, actuaries and statisticians, and legal professionals were the high-skilled workers who were hardest to find, followed by other health professionals.

The research found that in 2021, Germany faced a higher number of occupations in shortage than France. However, the German labour market was successfully addressing these shortages through the presence of migrant workers from EU and non-EU countries.

“To address these shortages, it may be necessary to increase domestic education in these fields or attract more skilled migrants,” Ludivine Martin, a researcher at the Luxembourg Institute of Socio-Economic Research said. “In terms of the evolution of skills demand, we observe that the similarity of requested skills over the period 2019 to 2021 is higher for high-skilled occupations than for medium-skilled ones.”

The authors have some recommendations on how companies can overcome the current labour shortages. They propose strategies such as training and education programmes for existing employees, and partnerships with educational institutions to develop a skilled workforce pipeline. Meanwhile, policymakers should address the challenges faced by highly-skilled non-European migrants in having their qualifications acknowledged in the EU, as the mismatch between their skills and local labour market requirements can lead to underutilisation of their expertise and hinder efforts to alleviate shortages in specific occupations.

Bachmann, R., Elewa, A., Martin, L., Rabaud, I., Verheyden, B., & Voia, M. (2023). Migration and the evolution of skill supply and demand (Deliverable 3.3). Leuven: UNTANGLED project 1001004776 – H2020.

The paper is available here.

The event, organised on 15 June in Warsaw by UNTANGLED partner the Institute for Structural Research (IBS), consisted of four sessions devoted to: the impact of technology on skills; worker flows; skills; and inequality. During the breaks, participants engaged in a discussion with the authors of four posters.

For detailed description of this event click here.

The workshop, organised by UNTANGLED partner the Institute for Structural Research (IBS), will showcase a diverse range of research. Participants will present 10 papers in four thematic sessions devoted to technology and labour; worker flows; skills; and inequalities. During the workshop four paper posters will be displayed throughout the day.

For a detailed overview of the programme, please refer to the schedule here.

The paper, part of an UNTANGLED report titled: Gender gaps in skills, tasks, and employment outcomes, uses worker-level data from the European Working Condition Survey (EWCS) to examine gender gaps in tasks, both between and within occupations. The analysis reveals that from 2005 to 2015 over-skilling decreased, while under-skilling increased, for both men and women. These changes can be attributed in part to the expansion of non-routine cognitive occupations (analytical and interpersonal) driven by digitalisation. Furthermore, the study demonstrates that women who perform non-routine cognitive tasks, including analytical and interpersonal tasks, are more likely to be under-skilled and less likely to be over-skilled. In contrast, among men these patterns are observed primarily in non-routine analytical tasks.

The details and the programme of the JME conference, organised by the Bureau d’Economie Théorique et Appliquée (BETA), can be found here.

Hauret, L., Martin, L., Lewandowski, P., Palczyńska, M., Šalamon, N. (2023). Gender gaps in skills, tasks, and employment outcomes (Deliverable 5.3). Leuven: UNTANGLED project 1001004776 – H2020.

The 25 May meet-up organised by ZSI hosted five presentations:

Francesco Venturini (University of Perugia) presented his paper titled “Unsliceing the Pie: AI Innovation and Labour Share in European Regions.” The study investigated the impact of AI patents on the distribution of income between capital and labour, finding that in regions specialising in AI development the labour share decreases. This supports the notion of a decoupling effect caused by AI. Additionally, Venturini found that more AI patents in the region have a negative impact on the labour share of low-skilled workers. The presentation highlighted that the negative effects of AI are similar to those of other innovations.

Michela Vecchi (Kingston University) presented a paper co-authored with Mary O’Mahony and Catherine Robinson, examining the decline in the wage premium for highly skilled workers in Europe. Their findings indicate that both demand and supply factors contribute to the shrinking of wage premiums. On the demand side, the research shows that the association of technology and high skills has weakened, especially following the financial crisis. Additionally, the presence of intangible assets is found to be negatively correlated with the wage premium for skilled workers. On the supply side, the increasing number of workers with tertiary-level education has pushed down the wages of highly skilled individuals relative to those with lower skills.

Fynn Thjorben Semken (ÖSB Social Innovation) presented a research project titled Health Sensor for Digital Work, funded by the Austrian Chamber of Labour. This project aims to examine the effects of digital technologies that companies use to organise work on employee health. The primary objective is to develop a prototype tool that can assist companies in assessing whether health issues experienced by employees are linked to the extensive use of digital technologies in their professional lives. The project also aims to identify solutions to mitigate negative impacts such as digital stress. It involves companies, a tech provider and a consultancy. Final results can be expected in Spring 2024.

Ludivine Martin (LISER) discussed her collaborative research with Kamil Filipek and Thiago Brant, which examines whether current typologies of digital skills are adequate to capture the evolving nature of work and to single out digital skills that are the most sought-after by companies. They analyse online job vacancies from Lightcast (formerly Burning Glass Technologies Europe) for 2021 from France, Germany, Belgium, and Luxembourg.

Stella Wolter (ZSI) presented The Lost Millennials Project, funded by an EEA and Norway Grant which aims to enhance the integration of 25+ NEETs, i.e. people aged from 25 to 29 who are neither in employment, education or training, into the labour market or into learning. One of the ways of providing better support to this group is to exchange and improve the evaluation practices of labour market initiatives targeting this group. Generally, the group of NEETs is found to be composed of varied groups in different countries and structured by gender (women and parents in unpaid care work), disability and other health conditions, the rural/urban divide, (lack of) education, and precarious employment opportunities in their respective labour markets. The project also aims to learn more about the effects of education and/or employment initiatives and to enhance stakeholders’ capacity to carry out impact studies.

The collected slides with further links to the respective projects and outputs are available here.

The  next Café will be held on 21 September at 2 pm.

To find out more please click here.

Mikkel Barslund (KU Leuven) warmly welcomed all participants and provided a synthesis of the results from papers and reports that have been written thus far. The preliminary conclusion from our research demonstrates that digitalisation and robotisation do not seem to harm labour markets and globalisation does not pose a threat to jobs. However, it has become apparent that demographic changes present significant challenges within the three megatrends examined by UNTANGLED.

Next, we delved into the preliminary results of scenario projections, exploring how technological advancements and globalisation influence inequalities, skills, and labour market outcomes. Roberta Capello and Andrea Caragliu (Politecnico di Milano) shared the results of simulating national and regional growth trajectories and labour market outcomes using the MASST model. Michał Burzyński (LISER) presented results based on a different model to stimulate the matching of skills to tasks amid parallel changes in technology, globalisation, and skills.

To ensure that our research findings reach the appropriate audience, we divided into groups and discussed the approach to crafting policy briefs, which will be developed over the next few months. Each session focused on a specific brief, covering topics such as strengthening job creation and improving job quality, upgrading skills and fostering lifelong learning, tackling growing inequalities, supporting migration and labour mobility, as well as inclusive policies.

Lastly, we have set the date for our final conference, which will take place on November 23. This event will serve as a platform to disseminate our findings, engage in fruitful discussions, and collaborate with experts from various fields.

The event brought together 18 participants from 10 partner institutions.