Contribution
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Lesuisse, P. (2022). Employment, Unemployment, Participation: A regional study. Revue d'économie politique. DOI
Despite having a GDP growth rate above the EU-15 average, labor market conditions in some Central and Eastern European countries (CEECs) remain problematic. In particular, unemployment rates have been slow to approach the European average, and the labor-force participation rate remains below European standards. This non-employment is all the more problematic given that regional heterogeneities in the EU have been increasing over time.
We use the approach of Blanchard and Katz [1992] in order to understand how the unemployment rate and the participation rate respond, at the regional level, when an employment shock occurs. We find that across the EU-28 there is an effective labor supply adjustment, with a short-run and temporary response of the unemployment and participation rates.
We find no significant differences between the EU-15 and CEE regions and conclude that labor market conditions are converging within the EU as a whole. However, with respect to the overall employment structure, we highlight the role of the sectoral reallocation of labor in increasing labor market flexibility. Finally, we highlight the higher sensitivity of women’s participation to employment shocks.
Combes, J.-L and Lesuisse, P. (2022). Inflation and unemployment, new insights during the EMU accession. International Economics. DOI
During the process of EU integration, we try to understand how changes in the exchange rate regime, attributed to the ERM-II transition and Eurozone membership, influence the dynamics between inflation and unemployment, i.e., fluctuations in the coefficient of the Phillips curve. To clarify the impact of the loss of monetary autonomy, we analyze a panel of countries, before and after joining the euro area, over the last twenty years, using recent work by McLeay and Tenreyro (2020). Being pegged to the Euro during the accession process is not associated with a flattened Phillips curve. However, after joining the euro area, the coefficient on the Phillips curve becomes insignificant. This result is confirmed by examining other small Eurozone countries, while the "economic leaders" of the Eurozone tend to maintain a significant trade-off between inflation and unemployment.
Lesuisse, P. (2020). Education public expenditure and economic growth under the prism of efficiency. HAL - submitted
Recurrently in the literature, we find that public spending on education has an ambiguous impact on economic growth. Using the World Bank's World Development Indicators, we revisit an endogenous growth model of Blankenau et al. (2007), over the last thirty years. By integrating the fiscal impact on growth of public spending, we analyze the empirical relationship between public spending on education and economic development.
Despite a positive and significant impact on the overall group of 65 countries belonging to upper-middle and high-income countries, our main results are not robust to analysis by economic development subgroups.
Once we control for the performance of public spending in efficiently generating human capital, we find a positive and significant impact of increased spending on education in what we call the “high performing countries”.
Our results show that increased education spending is a driver of economic growth only under the prism of performance. We provide some interesting statistical elements concerning dichotomies between low performing and high performing countries.
The figure on the top shows public spending on education relative to the Lim et al. (2018) expected human capital index by income country level. In the bottom, we replaced PSE with tertiary education (population aged 25 and over with at least upper secondary education). Three groups of countries are considered: upper-middle and high-income countries (back to 1990) and countries belonging to upper-middle income groups but classified as “performing” in terms of PSE.
Lesuisse, P. (2017). External Monetary Shocks to Central and Eastern European Countries. Etudes et Documents, CERDI, (5). HAL
Few countries are part of the European Union but are still on the bangs of the euro zone. This study aims at identifying the magnitude of the direct impact of the ECB's monetary policy, i.e. the international monetary spillovers, in the Central and Eastern European countries (CEECs).
The use of a panel VAR method allows us to take into account the limited time horizon while dealing with endogeneity problems. We focus on the exchange rate regime as a vector to account for heterogeneous responses. We find significant spillovers from the ECB to the CEE countries. However, these spillovers tend to decrease in recent years.
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