External integration, structural transformation, and economic development: Evidence from Argentina 1870-1914
Pablo Fajgelbaum, Stephen Redding12 July 2014
External integration is often viewed as an important driver of economic development, but most existing studies use aggregate data. This column present evidence from a natural experiment provided by Argentina’s integration into the world markets in the late 19th century. The findings suggest that proximity to trade centres is associated with employment density, high lands rates relative to wages, and structural transformation away from agriculture.
Oleg Itskhoki, Marc Muendler, Stephen Redding, Elhanan Helpman
External economic integration is often argued to be an important driver of economic development, as it raises income through specialisation in comparative-advantage sectors, provides low-cost access to imported goods, and shapes the pattern of structural transformation from agricultural into non-agricultural activities. These relationships are typically examined at the aggregate level, implicitly treating each country as a point in space.
The debate on the future of the European Union is in full swing. In this column, Bruno Macaes – the Portuguese Minister for Europe – stresses the importance of policy coordination in achieving better integration. One way to do so is via a fiscal union, but this creates unity at the expense of diversity. A second way involves formal contracts and partnerships. But to make this approach less rigid, the political dialogue does not need to be formalised in actual contracts.
The debate on the future of the European Union is now in full swing. Perhaps the most interesting aspect of this debate is the way it harks back to a short clause in the EU's founding document. In the 1957 Treaty of Rome, the signatories pledged to work towards “an ever closer union”. It was never entirely clear what this meant, but that has not stopped many in the UK, the Netherlands, and other countries from arguing that this original ambition is also what is fundamentally wrong with the EU. A review by the Dutch government concluded that the “time for an ever closer union is up”.
The Great Recession worsened the already-intractable unemployment problem of many immigrant communities in western countries. Can acquiring citizenship improve employment prospects for immigrants? CEPR Discussion Paper 8182 argues that recent liberalization of citizenship regulations in Sweden and Canada has increased employment probabilities for immigrant groups in both countries.
Gianmarco I.P. Ottaviano, Giovanni Peri17 April 2008
Immigration of less educated, younger Eastern Europeans and North Africans to Western Europe would economically benefit its educated and older population. This column, summarising research on immigration effects in Germany, suggests that, to fully reap the benefits from immigration, Western Europe should make its labour markets more competitive and accessible to outsiders (immigrants) and its welfare state more selective.
Western European workers are ageing, Western European women are increasingly participating into the labour force, and young Western European generations have significantly increased their level of schooling. As these three tendencies continue, Western European economies will increase their demand for services once provided by women at home and young workers with low education (such as the care of children and elderly, cleaning, cooking, preparing food, driving, landscaping, building and similar services), while the supply of workers willing to provide them will shrink.
An intense political and intellectual debate is taking place in Europe regarding the pace at which recent immigrants are (or are not) integrating to European cultural values. Huntington's notion of clash of civilizations as well as Sen’s analysis of multi-cultural societies, for instance, prominently feature in many discussions in the media.