Project WeLaR’s midterm conference, “The Effects of Digitalisation, Globalisation, Climate Change, and Demographic Shifts on Labour Markets and Welfare States in the European Union”, provided an opportunity to share our outcomes and engage in discussions with fellow scholars studying labour market trends.
Hosted by HIVA KU-Leuven on 23 May 2024, the conference featured 17 presentations and drew 35 participants from research institutes and universities across Europe.
“It was a busy day full of interesting discussions,” says Laurène Thil of the HIVA-KU Leuven coordination team. “We shared preliminary findings from seven papers we’re working on in Project WeLaR and received helpful suggestions on how to strengthen our work. We also had the opportunity to learn about results from other EU-funded projects, such as Growing Inequality: a novel integration of transformations research – GI-NI and Incoding, and to exchange ideas with our stakeholders,” adds Karolien Lenaerts.
The event started with a keynote from Agnieszka Chłoń-Domińczak (Warsaw School of Economics), “European social citizenship – can it help building resilience in our societies?” followed by four sessions.
Artificial intelligence and platform work
Felix Grimm (LISER) presented the paper: “AI, Task Changes, and Worker Reallocation”, co-written with Christina Gathmann and Erwin Winkler, showing that the labour market effect of AI differs from those of robots. The preliminary results show that in Germany, exposure to AI reduces analytical tasks and increases routine tasks performed in occupations, while exposure to robots has the opposite impact. However, workers adjust to AI without considerable adverse employment or earnings effects.
Siegfried Manschein (EUI) discussed his paper “Artificial Intelligence and Political Behavior Experience with ChatGPT”, which examined how exposure to artificial intelligence affects political behaviour. Manschein used an online survey experiment to gauge how interaction with Chat GPT shapes views on populists’ political ideas, redistribution, status dynamics, and occupational risk.
Ursula Holtgrewe (ZSI) presented the paper “Fighting Ghosts?” How Social Partners Address Artificial Intelligence, Algorithmic Management and Platform Work in Europe”, co-written with Anna Ilsøe, Alejandro Godino Pons, Miklós Illessy and Trine Pernille Larsen in the framework of Project Incoding. In her presentation, Ursula Holtgrewe focused on how European and national social partners address the challenges of AI and Algorithmic Management. She argued that their strategies align with existing industrial relations regimes, but information asymmetries and opacity in the use of AI and AM significantly challenge workers’ rights.
Wouter Zwysen (ETUI) presented the paper “State Institutions and the Prevalence of Internet and Platform Work”, co-written with Bianca Luna Fabris, which looks into how state institutions and welfare structures influence the prevalence of platform work across Europe. They found that countries where platform work is less common can be characterised by higher social spending, more passive labour market policies, greater redistribution and a less dualised labour market.
(Atypical) employment and the role of trade unions
Sylwia Radomska (INE PAN) presented the study “The European Unemployment Puzzle: Implications from Population Aging”, co-written with Krzysztof Makarski and Joanna Tyrowicz, which explores how ageing affects the labour market and the conduct of monetary policy. The authors found that population ageing lowers the unemployment level and that the process is more robust in the Eurozone than in the US. Because the elderly are less sensitive to inflation than the young, the optimal monetary policy becomes more restrictive as the population ages.
Henri Haapanala (University of Antwerp) presented the paper “Union Membership after the Storm: Who Belongs to Trade Unions in the Post-industrial Age?” co-written with Zachary Parolin and Ive Marx, exploring the drivers of the continuing decline in labour-union membership. While it is difficult to establish a grand casual pattern, certain trends can be identified, including the apparent severing of the traditional link between unions and left-wing political parties, and the increasing share of women among union members.
Wojciech Szymczak (IBS) discussed the paper “Technology Adoption, Atypical Employment and Trade Unions”, co-authored with Piotr Lewandowski. The authors analyse the impact of technology adoption on the popularity of non-standard employment, showing that a significant increase in involuntary atypical employment was associated with higher adoption of industrial robots. In contrast, no effect of software and database adoption was found. The paper also shows that high trade union density can mitigate the adverse effects of industrial robots by reducing atypical employment.
Ludivine Martin (LISER) presented the WeLaR paper “Consequences of the Expansion of Work from Home and Digitalization on Teleworkers’ Work Intensification, Mental Health and Well-being”, written jointly with Laetitia Hauret. They explore how the expansion of work from home and digitalisation during and after the COVID-19 pandemic impacts teleworkers’ work intensification, mental health, and well-being. The authors found that the effects of the changes were mixed, influenced by work and private life factors, digital tool usage, and national contexts, with notable variations across demographics and countries.
Fiscality, wages and pensions
Holger Stichnoth (ZEW) presented preliminary results of the WeLaR study “The Fiscal Contribution of Immigrants in Germany”, which he is working on with Alexandre Gnaedinger and Mats Le Floch. The researchers focused on Germany, which experienced a large inflow of immigrants in the past decade and where 17% of the population is foreign-born. Their data reveal that the net fiscal contributions of Germans and EU nationals to the state budget are positive, while for non-EU nationals, mainly migrants from Iraq, Syria, and Afghanistan, they are negative. Still, this deficit is small, at less than 0.5% of GDP. The study is only a snapshot measure, not the same as the lifetime NFC, and should be treated with caution.
Thuc Uyen Nguyen-Thi (LISER) presented the WeLaR study “Effects Of Technological Progress on the Decision to Retire Early. Evidence for Europe”, written jointly with Mikkel Barslund, Ivana Ivkovic, Ana Milinkovic and Ilse Tobback. The results indicate that women with higher digital skills are less inclined to opt for early retirement, but this factor does not influence men’s decisions. Other variables affecting the probability of early retirement are age, educational background and job status.
Mikkel Barslund (KU Leuven) presented the WeLaR study “Trade-offs and Demand for the Pan-European Pension Plans (PEPP)”, co-written with Aleksandra Anic, Ivana Ivkovic, Ludivine Martin, Ana Milinkovic, Uyen Nguyen and Javier Olivera, which examines demand for PEPPs among EU residents. Barslund showed that such plans become increasingly important as labour mobility increases, but they only operate in a handful of countries. In Luxembourg, where researchers conducted an experiment, the willingness to pay for a PEPP is high.
Marko Vladisavljevic (EKOF) presented preliminary findings from the WeLaR study that Nizamul Islam and Jelena Žarković are working on. “Adjusting Social Tax and Benefit Systems to Future Automatisation Effects” investigates how automation influences income distribution and welfare. Their findings show that the process decreases disposable income and increases inequality and poverty in all the countries they studied (Czechia, France, Spain, and Romania). Higher expenditures will be needed to prevent the negative consequences of automation.
Karol Madoń (IBS) discussed the paper “The Role of Global Value Chains for Worker Tasks and Wage Inequality”, which he wrote jointly with Piotr Lewandowski and Deborah Winkler. The paper finds that higher GVC participation is linked to increased routine task intensity among workers, indirectly translating into wider wage inequality. Higher expenditures are going to be needed. However, he argued that GVC participation is associated with lower wage inequality in most low- and middle-income countries that receive offshored jobs, and higher wage inequality in high-income countries that offshore jobs.
Mobility and convergence
Sarah McNamara (ZEW) discussed her paper “Intergenerational Mobility of Education in Europe: Geographical Patterns, Cohort-Linked Measures, and the Innovation Nexus”, written jointly with Guido Neidhöfer and Patrick Lehnert, showing that intergenerational mobility can drive regional innovation.
Fabio Lamperti (UNIPG) presented a study, “Demand Megatrends and Risks of Labour Market Exclusion”, which he and Davide Castellani are working on in the framework of Project WeLaR. The study shows that labour market exclusion is persistently higher among middle-aged/older and less educated individuals. Overall, digitalisation, globalisation, climate change, and demographic change have a limited effect on the probability of long-term unemployment. Industrial policy, which sustains the diffusion of digital technologies and necessary skills, can be combined with trade policies geared toward more liberalisation and fostering a country’s connection with global value chains. This may offer opportunities to reduce labour market exclusion for some demographic groups (e.g. women), though it may crowd out the least educated workers.
Hans Christian Garmann Johnsen (University of Agder) discussed preliminary results from the GI-NI project. In his presentation, “Are Regions in Europe Converging or Diverging?”, developed jointly with Jon P. Knudsen, Terese Birkeland, Tore Bersvendsen, and Eirin Mølland, he explored regional development in Europe over the past 10-15 years. When looking at regions of Europe, purchasing power has risen, education levels have increased, and fewer people are unemployed. However, while things have improved across the board, significant differences remain. The findings suggest a nuanced picture of neither stark divergence nor strong convergence but rather parallel development among regions, with indications of improved resilience to recent crises compared to the 2008 financial downturn.
Frederic de Wispelaere (KU Leuven) discussed his paper “Assessing the Level of Social Protection in the Context of Labour Mobility within the EU”. He showed that the legal framework developed at the EU level plays a crucial part in preserving and guaranteeing the social protection of mobile workers within the EU. However, there are still inequalities in the social security of some groups of EU mobile workers compared to local workers of the host Member State, which might create a risk of social dumping. Transnational social protection is in the spotlight, as there is national political pressure to limit the social rights of mobile workers.
