At the start of our project, Europe was in flux. The economy was marked with mass unemployment, indebtedness, and little growth. The welfare state provided insufficient protection. Several countries experienced social unrest and anger in spite of the gains of economic and political integration. European institutions were subject to strains.
Emerging economies outside Europe challenge Europe's competitiveness in a wide range of sectors. Our results show that integration has no doubt brought the European countries closer together, but efforts meant to coordinate some policies have failed to coordinate others. Central macroeconomic tools are outside national control. The free mobility of goods, services, people and capital affect economic development and inequality across European countries not only in a positive direction. The impact of neighboring countries on own economic development is also clear.
Our project has studied several aspects of how Europe has coped with the problems and why some of them still persist. Has European integration suffered? Is EU built on fragile compromises that do not tolerate severe crisis? We have addressed political questions like these by impartial investigations that provide detailed insights to many issues of great importance in themselves and for the overall assessment.
We have identified policies and performances that have worked better than expected such as wage coordination and welfare state responses, but also policies and performances that show unresolved problems such as aspects of labor migration and lack of coordinated interventions across countries. The large organizations of Europe have played an important role to stabilize cooperation and integration.
We combine variations in social organization and exposure to global competition to derive how for instance China's entrance to the world market affects employment and wages in different regions of Europe. We see an interesting pattern of cooperation and coordination. Comprehensive organizations in labor market among employers and employees mitigate the negative effects of globalization, while less comprehensive organizations in more decentralized systems seem to be less effective in this respect. The lesson is that comprehensive organization enable large groups of workers to reap the gains from globalization that otherwise might have turned out as losses.
Migration plays a serious role in all aspects of European integration. We have used changes before and after the EU extensions to explore the causal effects. One clear result is that immigration reduced the income growth of groups with low qualifications. Immigration from low-income countries also leads to the lower social mobility of individuals with low-income parents.
Asylum policies are an important special case. We have found distinct tendencies of re-nationalization of asylum regulation. The policy changes in all countries affect the total outflow from the sending countries and we find both a direct effect and a deflection effect. It is evident that a stricter asylum policy in the destination countries reduces the total outflow of asylum seekers.
To address, more generally, how institutions respond to the inflow of new workers and to the crisis on other fronts, we have explored EU-legislation, European social values, and more generally the social cohesion in Europe. We have discovered how some welfare state policies also have important unintended consequences. They have in some cases lead to low wages to some immigrant workers who seek employment just to qualify for welfare benefits. We have shown how workers and employers cooperate in exploiting welfare state arrangements and what can be done about it.
The development of society models is decisive for how Europe copes with the crisis and how it can restore growth and prosperity. We find clear signs of both divergence and convergence within Europe. There is a slower convergence towards a common Europe model than many observers had hoped. It is also clear that the welfare state responses differ across countries. The northern European countries have weathered the strains of the past decade relatively well. We do not find that the recent upheavals prompt stronger convergence of institutions and policies.
Good research leads to further research. We continue our efforts on studies on
i) turnouts in elections where we use register data to explore who votes and under what circumstances;
ii) political and economic consequences of being "hit by the silk road";
iii) the recent developments in France that are collective bargaining by riots and maybe a mother of new social reforms.
European Strains demonstrates the value of combining theory and empirical studies and to involve several disciplines. It is equally wrong to study Europe with pure economics, abstracting from all institutional arrangements, as it is to study Europe with a focus on EU institutions only.
Europe is in flux. Its institutions are subject to strains. The economy is marked by crisis, mass unemployment, indebtedness, and no growth. Is European integration robust, or is it built on fragile compromises that only work in good times? To answer we c ombine perspectives of cooperation, competition, and conflict with comprehensive empirical studies involving expertise from Economics, Political Science, Social Anthropology, and Sociology --- from Europe and the US.
The aims are
I) to understand the c urrent crisis and its institutional responses, emphasizing interaction between politics, economic development, and social change. We plan to explore how the crisis affects: wages and employment across European countries; legislative EU politics; social va lues in Europe; and labor disputes. Special emphasis is devoted to macro economic policies, and a discussion of when crisis leads to progressive reforms.
II) to understand European migration, mobility and economic growth in the light of national identit ies, and social and economic strains. Special emphasis is devoted to how to restore growth and employment in Europe, accounting for entrepreneurship, labor migration and firm responses. The goal is to obtain a thorough understanding of the mutual depende nce between economic and social development, migration, and the distribution of income.
III) to understand the economic and political feasibility of the European Social model, emphasizing how temporary shocks may create permanent institutional changes on ce we incorporate economic, social, and political reactions. We plan to explore the challenges created by governance on many levels, ranging from the need for a common European asylum policy to the funding of the welfare state. We stress how the willingne ss to finance the welfare state may decline as incomes go up. The goal is to highlight how the political feasibility of the European Social Model might be equally important as its economic feasibility.