Unleashing potential
Model-based reform benchmarking for EU Member States
Bibliographic Data
| ID | 21471091 |
|---|---|
| Authors | Philipp Pfeiffer (0000-0003-2946-2404, European Commission, corresponding author), János Varga (0000-0002-7429-8458, European Commission), Jan in ’t Veld (European Commission), Jan in 't Veld |
| Year | 2024 |
| Volume | 83 |
| Pages | 102535 |
| Publication date | 2024-06-01 |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | European Journal of Political Economy (JOURNAL) |
| Journal identifiers | ISSN: 0176-2680 • E-ISSN: 1873-5703 |
| Publisher | Elsevier BV (PUBLISHER) |
| DOI | 10.1016/j.ejpoleco.2024.102535 |
| OpenAlex | W4396633876 |
| Language | EN |
| Citations received | 2 |
| References cited | 31 |
Supply-side policies take centre stage in the EU's post-pandemic recovery plans. This paper employs a benchmarking approach to quantify the potential impact of structural reforms in the EU Member States. Based on a comprehensive collection of structural indicators and a rich endogenous growth model, we evaluate reforms in five policy areas: (i) market competition and regulation; (ii) taxation; (iii) skills and education; (iv) labour markets; and (v) research and development. For each indicator and Member State, we simulate the closing of half of the gap with the EU's best performers, implying ambitious reforms for countries with significant distance to the frontier. For these stylised reforms, we find significant potential gains in employment and output, raising EU GDP by around 2% and 8% after five and twenty years, respectively. In the long run, the policies can increase EU GDP by over 20%. The policies also reduce economic disparities between countries, given different scope for reform. For countries with a sizable distance to the best performers, increases in potential GDP could exceed 40% when halving the gap across all indicators. Among the reforms considered here, human capital investment emerges as central for enhancing growth potential. In addition, we find synergies across reforms and countries and assess the sensitivity to alternative assumptions on technology dynamics in our model
Benchmarking · Business · European union · International trade · Member states · Political science · Education in Diverse Contexts · European Monetary and Fiscal Policies · Global Politics and Economy
Skills, Tasks and Technologies
Why Do New Technologies Complement Skills? Directed Technical Change and Wage Inequality
Technical Change, Inequality, and the Labor Market
The impact of product and labour market reform on growth
Reforms of collective bargaining institutions in European Union countries
Comparing Labor Supply Elasticities in Europe and the United States
R & D-Based Models of Economic Growth
Endogenous Technological Change
The International Dynamics of R&D and Innovation in the Long Run and in the Short Run
Are Ideas Getting Harder to Find
| Citations per year | 2 |
|---|---|
| Citation span | 2025 - 2026 (2) |
| Highly cited | No |