Promoting social cohesion and convergence

Upward convergence in material well-being: Is a COVID-19 setback inevitable?

Policy brief
Gepubliceerd
8 december 2020
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Auteur(s): 
Mascherini, Massimiliano; Dubois, Hans; PRAXIS Center for Policy Studies

Hoofdconclusies

  • Indicators of material well-being have generally followed the business cycle. They all deteriorated during the 2008–2013 economic crisis and most improved in the following years. In 2018, however, several indicators, had not reached their pre-crisis levels.
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  • Indicators of material well-being have generally followed the business cycle. They all deteriorated during the 2008–2013 economic crisis and most improved in the following years. In 2018, however, several indicators, had not reached their pre-crisis levels.
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  • Convergence in material well-being has followed a similar pattern: countries diverged during the 2008–2013 crisis, and converged during the recovery, albeit not always enough to reduce the gaps between countries to their pre-crisis levels.
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  • These patterns must be seen as a strong warning signal for policymakers who wish to avoid history repeating itself, with the COVID-19 crisis prompting another escalation of material hardship and divergence among Member States, followed by a slow process of return to the path of upward convergence.
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  • The policy brief further reveals the insensitivity to the economic upturn of indicators representing elements of income inequality. Policymakers seeking to address this may need to look into structural improvements of the situation of the lowest income groups in society rather than relying on economic growth.
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  • Enhanced coordination of minimum income schemes at EU level could be examined as a tool to help prevent downward convergence in material well-being during economic crises. However, the limitations of such schemes and the widely differing policy contexts among Member States should be considered.
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Samenvatting

The EU strives for the upward convergence of its Member States, where their performance improves and gaps between them decrease. Nearly a decade after the Great Recession, the COVID-19 crisis has again put this objective under pressure. This policy brief focuses on convergence in material well-beRead more

The EU strives for the upward convergence of its Member States, where their performance improves and gaps between them decrease. Nearly a decade after the Great Recession, the COVID-19 crisis has again put this objective under pressure. This policy brief focuses on convergence in material well-being in Europe. Trends in several indicators largely follow the economic cycle, with upward convergence in good times and downward divergence in bad times. This could mean further divergence and polarisation among Member States as we face a new economic downturn, with the prospect of an uneven pace of recovery across countries when growth returns.

The policy brief presents an overview of policy measures implemented by the EU and Member States to smooth the impact of the COVID-19 crisis. It discusses EU coordination of minimum income schemes as a possible tool to limit deterioration and divergence in the indicators should the economy enter a downturn.

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This report presents the results of research conducted largely prior to the outbreak of COVID-19 in Europe in February 2020. For this reason, the results do not fully take account of the outbreak.

Onderzoek dat is uitgevoerd vóór de terugtrekking van het VK uit de Europese Unie op 31 januari 2020 en dat vervolgens is gepubliceerd, kan gegevens over de 28 EU-lidstaten bevatten. Na deze datum wordt bij onderzoek alleen rekening gehouden met de 27 EU-lidstaten (EU28 minus het VK), tenzij anders vermeld.

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