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This document contains an extensive literature review of the state-of-the-art related to the research in UNTANGLED work packages (WPs) 3 to 6. The literature covered relates to (a)the impact of the three mega-trends of technological transformations, globalisation and demographic changes, and how they affect labour markets and social outcomes (WPs 3 to 5); and (b)literature related to building scenarios for Europe (WP 6). The document is divided into four sections. Each of the first three sections is concerned with the effect of these trends at the macro (WP3), meso (WP4) or micro (WP5_ societal level. The last section looks at scenario building (WP6). It is a living document in the sense that throughout the project additional sources will be added to keep the literature review up to date.

This paper investigates whether the diffusion of tangible IT and CT capital and intangible capital asset types has an impact on labour demand growth and the share of labour income in total income at the industry and country level. The econometric analysis is derived from a Cobb-Douglas production function taking empirical stylized facts into account. The effects of technical progress embodied in the various forms of capital impact along inter-industry and intercountry production linkages, which are taken into account by using global value chain indicators. The analysis is broken down to examine the influence on different types of labour, including the dimensions of gender, age and educational attainment. Accumulation of ICT assets have generally insignificant and in some cases small positive effects on labour demand and income shares, though patterns differ across types of labour. Intangible assets show a positive relation with respect to labour demand growth.

Europe will be challenged by demographic changes over the next few decades, even under favourable assumptions about fertility and migration, but the economic eects are not yet fully understood. This paper studies the eects of population ageing on economic growth, capital deepening and robotisation in 27 European Union (EU) labour markets. First, we econometrically assess the eects of ageing and potential labour market shortages on growth. Second, we test the hypothesis of whether ageing leads to faster adoption of new technologies. We distinguish between various capital asset types, including non- ICT and ICT capital, tangible and intangible capital and the adoption of robots. The analysis is based on Eurostat, the European Labour Force Survey (EU-LFS) and International Federation of Robotics (IFR) data. Results indicate that ageing and demographic changes might result in secular stagnation, which decelerates the adoption of new technologies.

This document presents the conceptual framework guiding the UNTANGLED project and a glossary of key terms and concepts related to the topics that it covers. The framework considers definitions, measurement, available data, and indicators. This document also presents research protocols underpinning the quantitative and qualitative research carried out in the project. &nbsp

This paper investigates whether the diffusion of tangible IT and CT capital and intangible capital asset types has an impact on labour demand growth and the share of labour income in total income at the industry and country level. The econometric analysis is derived from a Cobb-Douglas production function taking empirical stylized facts into account. The effects of technical progress embodied in the various forms of capital impact along inter-industry and intercountry production linkages, which are considered by using global value chain indicators. The analysis is broken down to examine the influence on different types of labour, including the dimensions of gender, age, and educational attainment. Accumulation of ICT assets have generally insignificant and in some cases small positive effects on labour demand and income shares, though patterns differ across types of labour. Intangible assets show a positive relation with respect to labour demand growth.

Die Studie gibt eine Einschätzung des derzeitigen und zukünftigen Migrationspotentials aus den Mittelund osteuropäischen EU-Ländern (MOEL-11) und den drei Westbalkanstaaten Bosnien und Herzegowina, Nordmazedonien und Serbien (WB-3) mit dem Ziel, die Abschätzung der Bevölkerungsentwicklung in Wien zu unterstützen. [...] Zusammenfassend deuten diese Entwicklungen darauf hin, dass mittelfristig eine Abschwächung der bestehenden Migrationsströme aus den MOEL und WB-3 nach Österreich und Wien erwartet werden kann. Dies hat mehrere Gründe: Erstens ist - unter der Annahme, dass im Krieg zwischen der Ukraine und Russland eine Art Waffenstillstand geschlossen werden kann und von Seiten der EU kein Gasembargo verhängt wird - davon auszugehen, dass sich der positive Wirtschaftstrend in den MOEL und die damit einhergehende Erholung auf den Arbeitsmärkten (bis zu der schon bestehenden Arbeitskräfteknappheit) auch mittelfristig fortsetzen wird. Zweitens weisen die demographischen Szenarien auf ein teilweise starkes Schrumpfen der Gesamtbevölkerung und den damit einhergehenden Rückgang der Erwerbsbevölkerung hin. Drittens ist im Verlauf der nächsten Jahre keine weitere Öffnung des Arbeitsmarktes zu erwarten. Denkbar wäre allerdings ein erleichterter Arbeitsmarktzugang für WB-3 BürgerInnen bzw. Drittstaatsangehörige in jenen Bereichen, in denen zunehmender Arbeitskräftemangel zu beobachten ist. Schließlich gibt es keine Hinweise, dass sich die regionale Struktur der Migrationsströme in Hinblick auf die österreichischen Bundesländer stark verschieben wird. The study assesses the current and future migration potential to Austria (Vienna) from the Central and Eastern European countries (CEEC-11) and the three Western Balkan countries Bosnia and Herzegovina, North Macedonia and Serbia (WB-3), with the aim of supporting the assessment of population development in Vienna. [...] In summary, these developments indicate that a weakening of the existing mobility flows from CEEC and WB-3 to Austria and Vienna can be expected in the medium term. There are several reasons for this: Firstly, assuming that a kind of ceasefire can be concluded in the war between Ukraine and Russia and that no gas embargo is imposed by the EU, it can be assumed that the positive economic trends in the CEECs and the associated recovery in the labour markets (up to the already existing labour shortages) will continue in the medium term. Secondly, the demographic scenarios point to a partly strong shrinkage of the total population and the corresponding decline in the working age population. Thirdly, no further opening of the labour market is to be expected in the course of the next few years. However, easier access to the labour market for WB-3 citizens or third-country nationals in general in those areas where labour shortages are increasing is conceivable. Finally, there are no indications that the regional structure of migration flows will shift significantly with regard to the Austrian provinces.

To benefit from the newly established EU Recovery and Resilience Facility (RRF), the Visegrád countries - Czechia, Slovakia, Hungary, and Poland - have submitted their national recovery plans. The Czech and Slovak plans have already been approved by the EU, paving the way for the up-front disbursement of 13% of the requested funds. However, approval of the Hungarian and Polish plans is still pending. All plans mostly rely on EU grants, with only Poland requesting a small amount of EU loans. Although all plans meet the requirements of at least 37% to be spent on green transition and at least 20% on the digital economy, individual spending priorities vary by country. Czechia and Poland, which are strongly dependent on coal power generation, put a great emphasis on renewables and clean technologies (and digital skills in the case of Czechia), Hungary on health care and green transportation, and Slovakia on digital skills and health care. In the area of digital economy, all countries focus to a large extent on public services. Healthcare, education, transportation and utilities tend to be the main beneficiaries of RRF funding in the region, albeit with strong cross-country variation in the relative importance of individual sectors. The annual growth effect of total EU RRF spending is estimated to range, on average, between 0.6 pp in Czechia and 1.4 pp in Slovakia over the next five years. For Austria, the effect will be less pronounced (0.3 pp per year on average) because of the smaller size of its own RRF spending in relation to GDP. However, the Austrian economy will benefit from the positive demand spill-overs of RRF in the Visegrád countries due to its extensive production and trade links with the region. As the Visegrád countries gradually move towards the implementation phase of the RRF package, numerous policy implications for Austria arise. These include the encouragement of cross-border cooperation on projects (especially in the areas of green transition and health care), an active role in regional stakeholder engagement, and reinforcement of alignment with core EU goals and values.

This paper analyses the impact of ICT-skills on individuals' labour market mobility patterns, in particular job-to-job, employment- to-unemployment and unemployment-to-employment transitions. Based on the OECD's Programme for the International Assessment of Adult Competencies (PIAAC) and longitudinal EU-SILC data, individuals' labour market outcomes are examined over the period 2011-2017 in nine EU countries and the UK. Our results indicate that individuals with strong ICT skills have better opportunities and are therefore not only more likely to change jobs more frequently but are also less likely to face unemployment. Furthermore, ICT skills support unemployment exit towards medium and high digital occupations. A certain minimum level of ICT skills also supports unemployment exit towards low digital occupations but seems to make employment in such occupations less likely once this threshold is crossed. Overall, ICT skills have less predictive power for transition towards medium digital occupations. Thus, while ICT skills appear to improve labour market opportunities significantly, it seems that there are still jobs that require relatively few ICT skills.

In this paper we provide a method to characterise global value chains and a related decomposition of bilateral gross exports by distinguishing three different stages of the value-added flows: (i) the source of value added, (ii) the final assembly stage of a product, and (iii) the final absorption (sink) of this product. Methodologically this is embedded in a simple framework using matrix algebra allowing for intuitive interpretations of the individual decomposition terms and results. The approach leads to a novel decomposition of bilateral gross export flows and related value-added trade indicators. It is shown how these correspond to existing measures using the property of inverse matrices. Specifically, the paper sheds light on the nature of the double-counting terms discussed in the literature. Finally, the approach outlined is extended by incorporating insights from the hypothetical extraction method. We argue that this is a complementary approach which however can be used to flexibly define the value chains of interest and characterise the respective flows that are considered part of this defined value chain, again carefully differentiating the source, assembly, and sink dimensions.

It is now over three decades since the eleven EU member states in Central, Eastern, and Southeastern Europe (EU-CEE) started their transition to market capitalism. All countries experienced deep recessions in the early 1990s, but since have achieved mostly sustained convergence with Western Europe. Many EU-CEE countries have overtaken Southern EU member states in terms of economic development. However, growth rates have slowed since the 2008 crisis, and the level of economic and social development varies widely across the region. This study has three key components. First, it establishes that the existing EU-CEE growth model may be reaching its limit, especially for the region’s most developed countries. Second, it details the megatrends which will further impact the region’s growth model now and in the future, including demographic, environmental, and digital factors. Finally, it outlines a set of policy options to develop the region’s growth model in a way that would drive a more sustained and sustainable rate of convergence with Western Europe in the coming decades. We find that governments in the region need to a) provide an underlying infrastructure that can support the growth of internationally competitive companies, b) fully embrace and take advantage of the digital revolution, c) maximise all available resources to profit from the green transition, and d) use policy levers to stimulate the automation of low productivity jobs and ease the transition into new and higher value work for their populations. Behind this should stand two important supportive pillars: accommodative fiscal and monetary policy at the national and EU levels and a more progressive tax system to fund an expanded welfare state.

The COVID-19 pandemic marks an unprecedented shock to global growth and trade and brought international dependencies into the spotlight. This triggered discussions on resilience and robustness of global value chains. In this paper we assess which products can be considered as vulnerable to trade shocks at the global level - referred to as 'risky' products - by constructing a 'product riskiness indicator' for 4700 globally traded products based on components such as market con-centration, clustering tendencies, network centrality of players, or international substitutability. In a second step the bilateral imports of risky products are matched to multi-country input-output tables enabling the analysis of the importance of internationally sourced risky products by country and using industries. Higher-tech industries are more prone to supply-chain vulnerability given the large share of risky products in high-tech product categories. Third, we apply a 'partial global extraction method' to assess the GDP impact of reshoring. Assuming that imports of risky products are re-shored from non-EU27 to EU27 countries suggests an increase in the EU27 GDP of up to 0.5%. The non-EU27 countries lose from such re-shoring activities accordingly. This suggests that it is also in the interest of the supplier countries and industries to assure robust or at least resilient supply chains. Finally, selected policy aspects in the context of the envisaged EU Open Strategic Autonomy are debated.