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    WE WILL HOLD UNTANGLED OPEN VIRTUAL EXPERT CAFÉ ON 21 JUNE

    The Virtual Expert Café series is an open format driven by participants’ contributions. During our informal online gatherings, experts, researchers and stakeholders from the fields of digitalisation, globalisation, migration, work, employment, skills etc. exchange thoughts and ideas. Participants can promote an ongoing project or research, tap into attendants’ collective intelligence for a specific question or simply enjoy a dynamic thematic discussion.

    See here what we discussed last time!

    If you want to present please send us one slide in advance at: untangled@zsi.at. You will be given 5 minutes to present.

    Register here

     

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    EDUARD STORM ARTICLE PUBLISHED IN LABOUR

    The study documents that worker-level variation in tasks has played a key role in the widening of the wage gap between German natives and foreigners. Storm finds idiosyncratic differences account for up to 34 per cent of the gap. Importantly, natives specialise in high-paying interactive activities not only between, but also within occupations. In contrast, foreign workers specialise in low-paying manual activities. This enhanced degree of task specialisation accounts for 11 per cent of the gap among high-wage earners and 25 per cent among low-wage earners, thus offering new insight into sources for imperfect substitution of native and foreign workers and consequently small migration-induced wage effects.

    The article can be downloaded here:

    https://onlinelibrary.wiley.com/doi/10.1111/labr.12220

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    UNTANGLED RESEARCHERS’ ARTICLE APPEARS IN ECONOMIC MODELLING

    “Labour market regimes, technology and rent-sharing in Japan”, an article written together with Kyoji Fukao, investigates a phenomenon for which the empirical evidence is very limited. Authors use instrumental variable methods and split-sample analysis, and find that:

    • Rent-sharing is affected by contextual factors shaping workers’ bargaining power.
    • Rent-sharing is higher when technological progress is faster and ICT capital intensity is higher.
    • Rent-sharing declines with a larger share of non-standard employment, lower union density and a weaker role of seniority.

    Fukao, K., Perugini, C., & Pompei, F. (2022). “Labour market regimes, technology and rent-sharing in Japan”. Economic Modelling, 105856

    See: https://www.sciencedirect.com/science/article/pii/S026499932200102X?dgcid=author#!

     

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    POMPEI ARTICLE PUBLISHED IN BJIR JOURNAL

     

    “Tax breaks for incentive pay, productivity and wages: Evidence from a reform in Italy” analyses the impact of a tax break on incentive pay (introduced in Law n. 208/2015) on labour productivity and average wages in Italian firms. Pompei and co-authors Mirella Damiani and Andrea Ricci use a unique source of firm-level information, drawn from a large representative survey of Italian firms merged with the ORBIS archive. By applying difference-in-differences methods, they find that:

    • the tax break has a positive effect on both labour productivity and average wages, although the positive effect on average wages is not confirmed by robustness tests.
    • productivity impacts are mainly driven by family firms in northern regions, which benefit from the more dynamic business environment.

    These results take into account unobserved heterogeneity and endogeneity issues.

    Damiani, M.; Pompei, F. & Ricci, A. (2022). “Tax breaks for incentive pay, productivity and wages: Evidence from a reform in Italy”. British Journal of Industrial Relations, 1–26.

    See: https://doi.org/10.1111/bjir.12676 (open access)

     

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    AI, INNOVATIVE MANAGERIAL PRACTICES CAN BOOST LAGGARD COMPANIES’ PRODUCTIVITY, UNTANGLED PAPER FINDS

     

    As part of Project UNTANGLED, which investigates the impact of technology on the labour market, the paper delves into whether Fourth Industrial Revolution (4IR) technologies such as AI, machine learning and the Internet of Things (IoT) can act as drivers of productivity. To answer this question, the paper analyses performance data from more than 800,000 companies from 16 European countries in 2011-2019. It examines whether innovative companies, defined as those with at least one patent application in a set of 4IR technological fields, improved their productivity versus their non-innovating peers.

     

    While productivity growth is essential to increase wages and improve living standards, it has been slowing for many years in advanced economies. Moreover, within industries the distance between the companies that are most successful and the rest of the pack has been expanding, as laggards prove unable to improve their performance. Disruptive 4IR technologies, particularly AI, offer hope of reversing this trend.

     

    “We found that productivity is 37% higher, and productivity growth 58% faster, at companies developing AI compared with peers that aren’t innovating in this field,” Francesco Venturini said. “Generation of AI technologies enables firms to catch up with the productivity leader. In practical terms, our finding means that to boost productivity, companies should shift their innovation focus to AI from other, less promising fields.”

     

    In addition to disruptive technologies, the researchers also looked at managerial and organisational capabilities, seen as a key source of competitive advantage. One way of improving managerial practices is ISO 9001 certification. ISO 9001 is the world’s most recognised quality management system standard, aimed at helping companies meet the needs of their customers and other stakeholders more effectively.

     

    “We found that companies which adopted ISO 9001 standards more easily closed the gap with the best performers, not only in terms of productivity, but also in terms of profits and average wages,” said Fabrizio Pompei.

     

    The impact of managerial and organisational capabilities on productivity was analysed only at Italian companies, due to data availability. The researchers analysed 109,919 Italian companies, 7.43% of which had ISO 9001 certification.

     

    “The introduction of ISO 9001 certification produces an immediate increase in productivity levels by 2.5%, and lagging positive effects of 4.9% in the first year and 7.6% in the second,” Fabrizio Pompei added.

     

    The paper is available here

     

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    DIGITALISATION AND SKILLS MISMATCH WERE THE TOPICS OF THE SECOND UNTANGLED VIRTUAL CAFE

     

    The February meet-up hosted three presentations by: Vassil Kirov, Astrid Schoeggl, Michela Vecchi.

    For mor information click here.

     

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    EUROPEAN WORKERS BENEFIT FROM ROBOT ADOPTION, UNTANGLED PAPER FINDS

     

    The study sheds more light on how automation and employment interact, and what factors strengthen and weaken those relationships, building on previous findings that robots aren’t harming employment in Europe. It shows significant differences among the continent’s economies, and highlights that labour costs play an important role. The paper provides a basis for further research to identify the policies that ensure workers benefit from robotisation as much as possible, the authors said.

     

    Ronald Bachmann and Myrielle Gonschor from the RWI – Leibniz Institute for Economic Research in Germany and Piotr Lewandowski and Karol Madoń from Poland’s Institute for Structural Research (IBS) studied how the increase in robot installation influenced worker flows, i.e. layoffs and new hirings, and therefore employment and unemployment levels in European economies.

     

    “The general message that comes from our research is that adoption of robots in Europe hasn’t led to a rise in unemployment,” Gonschor said. “The number of industrial robots per 1,000 workers quadrupled from 2000 to 2017, and the effects on employment have been seen as mixed. But it turns out that robots aren’t stealing our jobs – they’re changing them.”

     

    The study found that while the general impact of robotisation on employment was positive in the EU, it was stronger in countries with lower labour costs. Robot adoption did not lead to massive job losses, instead reducing the risk of layoffs and increasing chances of job finding, especially in economies where initial labour costs were lower, for instance in Central Eastern European countries such as Poland, Slovakia and Hungary. However, in Western European economies, where labour costs are higher, the effect was neutral – deployment of robots did not result in layoffs, but it did not translate into new jobs either.

     

    “Contrary to the narrative of job losses driven by experience in the US market, in Europe robots are a complement to humans’ work, not a substitute for it,” said Lewandowski. “This is clearly visible in Central and Eastern European economies, where the effects are even stronger as investment in automation created new jobs. That may be because in those countries robots were often installed in greenfield investments, linked to the integration of these economies into global value chains.”

     

    The researchers also found differences in how robotisation affects different groups of workers. Since machines are ideal for predictable and repetitive tasks, many have feared that people who perform such tasks, for instance working on production lines, are most vulnerable to automation. Surprisingly, the research found that they benefit most from automation. In most European countries, except for the richest ones, robot exposure increased the likelihood of job finding among workers in routine occupations. Another surprising finding is that automation does not pose a greater threat to older or younger workers, who are usually seen as the most vulnerable groups of the working population.

     

    “Our findings show robotisation will have different effects on the situation of workers in Germany than in Hungary, for example,” said Bachmann. “So faced with the ongoing increase in automation, EU countries will need different employment policies to support their workforce. Our study is a first step in this direction, and now more research is needed to craft policies at the national level.”

    The paper is available here

     

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    UNTANGLED TO HOLD OPEN VIRTUAL EXPERT CAFÉ ON 3 FEBRUARY

    We have launched the Virtual Expert Café series because we believe a less formal, more casual space for discussion is just as important as big official conferences. During our meetings new ideas are tested, networks expanded and alliances built.

    If you are working on labour market issues, join our next meet-up to:

    • share information on your current research, project, or results
    • announce an event or call for action
    • ask questions, seek advice, comment
    • listen in and expand your network

    Participants who wish to present will be given 3-5 minutes each. If you have a slide, poster or anything else you would like to share, please send it to us in advance at: untangled@zsi.at

    Register here:  https://survey3.zsi.at/index.php/566899?lang=en

     

     

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    All the best from all of us at UNTANGLE

     

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    FIRST UNTANGLED OPEN VIRTUAL EXPERT CAFÉ

    To learn more about our discussion:

    https://projectuntangled.eu/events/open-virtual-cafe-1/

     

     

    2021 © UNTANGLED. All rights reserved.
    This project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement No 101004776

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