Insights Blog

Continuing a 25-year tradition of providing economic insights for a more equitable society

Brief— Working longer is often proposed as the solution to the retirement crisis caused by older workers’ lack of retirement assets, but new research from SCEPA's ReLab shows this assumption doesn't match older workers' real experiences in the labor market.

Research note— new research shows regardless of the data source, retirement plan participation is low and stagnating.

SCEPA Climate Economics Director Willi Semmler and co-authors Francesco Saraceno and Brigitte Young published a new article asking how the European Union (EU) can recover its sense of common purpose after the Covid-19 crisis exacerbated division between and among member countries. The authors recommend a shared policy agenda for recovery to ensure Europe’s resilience in the face of future crises.

The economic and political consequences of the union’s divergence between core and periphery, including the dangerous surge in populist movements in almost every EU country, is the result of “a lethal mix of inadequate institutions and political choices dictated by flawed economic thinking.” The EU’s cohesion -- key to its economic and political viability -- cannot be trusted to blind faith in “efficient” markets, as some have claimed. This orientation has allowed the EU to become a club in which each member cares only about its own costs and benefits, Semmler and his co-authors explain.

Instead, the authors emphasize the importance of reforming institutions for macroeconomic governance (most notably fiscal policy) and prioritizing strong social welfare policy to ensure cohesion and the future of the union. This entails tackling European economic, fiscal, and social policy in tandem to create a sustainable EU recovery from the pandemic-driven downturn. The key for the EU, they argue, is to enact fiscal policies that protect against macroeconomic shocks and distributional problems while also creating and strengthening public goods such as a shared health care policy, a better Social Security system, and a coordinated transition to climate-neutral energy and transportation. These public goods are essential to reverse the harmful divergence trend in the EU and to build a more cohesive Europe that can more effectively take on a range of economic and political challenges.