OECD Economic Surveys: Austria 2017 (eBook)

Oecd (Autor)

eBook Download: EPUB

2017 | 1. Auflage
144 Seiten
OECD Publishing (Verlag)
978-92-64-27877-6 (ISBN)

Infos

Austria is a stable and wealthy economy and growth has picked up following the 2016 tax reform and the recovery of export demand. Employment has expanded, driven by rising participation of women and elderly and by immigration, although hours worked per worker have declined. Nonetheless, like in most OECD countries, productivity has slowed. Boosting potential growth requires reforms in a broad range of areas.

Austria’s transition to a digital economy and society is progressing but is slower than in the most advanced economies. A whole-of-government approach should help embrace change and facilitate the flourishing of innovative businesses, work practices and lifestyles throughout Austria. Digitalisation will redesign production processes and alter the relationships between work and leisure, capital and labour, the rich and the poor, the skilled and the unskilled. Under the aegis of the “Digital Roadmap” they issued earlier in 2017, policy makers will need to ensure equality of opportunities in the race with technology, and find the appropriate level of redistribution of the gains associated with digitalisation to foster social cohesion.

SPECIAL FEATURES: DIFFUSING DIGITAL INNOVATIONS; LABOUR MARKETS IN THE DIGITAL ERA

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Austria is a stable and wealthy economy and growth has picked up following the 2016 tax reform and the recovery of export demand. Employment has expanded, driven by rising participation of women and elderly and by immigration, although hours worked per worker have declined. Nonetheless, like in most OECD countries, productivity has slowed. Boosting potential growth requires reforms in a broad range of areas. Austria's transition to a digital economy and society is progressing but is slower than in the most advanced economies. A whole-of-government approach should help embrace change and facilitate the flourishing of innovative businesses, work practices and lifestyles throughout Austria. Digitalisation will redesign production processes and alter the relationships between work and leisure, capital and labour, the rich and the poor, the skilled and the unskilled. Under the aegis of the "e;Digital Roadmap"e; they issued earlier in 2017, policy makers will need to ensure equality of opportunities in the race with technology, and find the appropriate level of redistribution of the gains associated with digitalisation to foster social cohesion. SPECIAL FEATURES: DIFFUSING DIGITAL INNOVATIONS; LABOUR MARKETS IN THE DIGITAL ERA

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Assessment and recommendations

• Growth is picking-up and digitalisation brings new challenges and opportunities

• Growth is picking up

• Macroeconomic policy has been supportive

• Raising medium-term growth

• Seizing opportunities and addressing the challenges arising from digitalisation

• Challenges for green growth

Growth is picking-up and digitalisation brings new challenges and opportunities

After several years of subdued growth, economic output has accelerated in 2016 supported by a tax reform that entered into force in 2015-16, and more recently a pick-up in international trade. The upturn has improved fiscal balances, and the public debt ratio is on a downward path. The improvement in the macroeconomic situation has strengthened business and household confidence and the short-term outlook is favourable.

Like in most OECD countries, however, potential growth has weakened since the 1990s as capital formation, hours worked per person and total factor productivity have slowed. Austria initially benefitted from the rapid build-up of new regional value chains in Central and Eastern Europe, but has since tended to lose ground in this area. Policymakers currently aim at drawing on the global digital revolution to help renew business models, refuel productivity, accelerate innovation and boost competitiveness.

Austria remains a wealthy and stable economy, and its citizens enjoy a high quality of life (Figure 1, Panels A and B). GDP per capita and the employment rate exceed the OECD average. The risk of long term-unemployment is low and so is labour market insecurity. Even if a large share of jobs, particularly for women, is part-time, strong overall labour market performance boosts Austria’s favourable international rankings for jobs and earnings, income, and subjective life satisfaction. Nonetheless, the country lags behind other high-income small European economies (henceforth “peer countries”) with respect to work/life balance, health and housing, as discussed in recent OECD Economic Surveys, which focused on health in 2011, well-being more broadly in 2013 and gender inequality in 2015.

Figure 1. Well-being is high

Note: Well-being dimensions are based on different indicators in panels A and B (where they are based on the OECD Better Life Index database definitions: www.oecdbetterlifeindex.org) and in panel C (where they are based on OECD Regional Well-being database definitions: www.oecdregionalwellbeing.org).

1. Denmark, Netherlands, Sweden and Switzerland.

2. Relative ranking of the regions with the best and worst outcomes in the 11 well-being dimensions, with respect to all 395 OECD regions. The 11 dimensions are ranked according to the size of regional disparities in the country. In order to increase the sample size, all the annual waves of the Gallup survey between 2006 and 2014 have been pooled together.

3. Gap between top and bottom regions. Austria’s rank between 34 OECD countries is shown, 34 (highest dispersion), 1 (lowest dispersion).

Source: OECD (2016), Better Life Index database, www.oecdbetterlifeindex.org and OECD (2016) Regional Well-being database, www.oecdregionalwellbeing.org.

StatLink  http://dx.doi.org/10.1787/888933535772

At the subnational level, Austria is also in the upper half of OECD countries in most well-being dimensions. Inequalities in regional GDP per capita declined since the early 2000s and are currently the second lowest in OECD (Figure 1, Panel C). However, disparities have increased in recent years for other regional indicators, notably with respect to R&D expenditures, unemployment rates and gender gaps in labour force participation.

The redistribution and social protection systems, backed by long-standing social partnership institutions, play an important role. Wage inequalities and poverty compare favourably to other countries, thanks to a tax and transfer system that curbs market income inequality by nearly half (Figure 2). In 2016, social expenditures accounted for nearly 28% of GDP in Austria against an OECD average of 21% (OECD Social Expenditure Database). Austrians finding themselves out of work can expect a lower average income loss than in most other OECD and peer countries (OECD, 2017a). The pension system offers relatively high replacement rates across all earning levels, and old-age poverty is lower than the OECD average, although many leave the labour market before the statutory retirement age, which reduces their pension entitlements.

Figure 2. Redistribution plays an important role

2013

Note: The Gini coefficient has a range from zero (when everybody has identical incomes) to 1 (when all income goes to only one person). The poverty line is defined as 60% of median income.

Source: OECD database on income distribution and poverty.

StatLink  http://dx.doi.org/10.1787/888933535791

Financing redistribution, however, is becoming more difficult. The population is ageing and slower growth in total hours worked implies a deceleration of the growth in social contributions. Benefit adjustments have been made over the past decade, and further changes will be necessary in the future to shift the composition of funding away from labour taxes and social contributions towards wealth, consumption and other taxes, which are less distorting (Box 1).

Box 1. Considering the tax-and-benefit system as a whole

Successive studies in OECD considered the impact of different types of taxes on economic growth (Arnold et al. 2011) and, more recently, extended the analysis to inclusiveness. This stream of work suggests that when growth and inclusiveness objectives are considered together, the tax-and-benefit system in each country should be examined as a whole (Brys et al., 2016).

Across OECD countries, “recurrent taxes on immovable property” are found to be the least harmful for growth, followed by consumption taxes (including environmental taxes), “other property taxes”, personal income taxes and corporate income taxes. The other property taxes encompass “property transaction taxes”, “recurrent taxes on net wealth” and “inheritance taxes”, the individual impacts of which have not been investigated separately so far.

In the new extended approach, tax design for inclusive growth is defined as “tax policy which reconciles efficiency and equity considerations. This can be achieved either by minimising the trade-offs between efficiency and equity –meaning by reducing the equity costs of efficient tax reforms, or by lowering the efficiency costs of equitable tax reforms- or by implementing tax reforms that enhance efficiency and equity simultaneously”.

Given the special scope of the tax-and-transfer system in Austria and the need to generate alternative revenue sources to employment-unfriendly labour taxation, a comprehensive reconsideration of the tax-and-benefit system as a whole may help identify various reform options.

In contrast to income, wealth remains very concentrated in Austria. According to the OECD Wealth Distribution Database, as of 2010, the wealthiest 10% Austrian households held 62% of the country’s wealth, the second-highest share among 13 OECD countries after the United States (76%). Although in all OECD economies wealth inequality is significantly higher than income inequality (the top 10% of the wealth distribution hold on average half of total household wealth) the stark contrast between Austria’s income equality and wealth equality invites further scrutiny. The sources of this contrast are not well understood and need a thorough study of its own. Some very general insights can be offered when looking at OECD work on tax systems analysed for its growth friendliness on the one hand and for its contribution to inclusiveness on the other (Box 1). Another weakness in social cohesion pertains to gender inequalities, which run deeper than in comparable countries. Childbearing tends to worsen gender gaps with respect to the distribution of paid and unpaid work, earnings, career prospects and entrepreneurship opportunities (OECD, 2015a).

Life satisfaction is high for most social groups (Figure 3) but distinctly lower for the long-term unemployed, who account for 2.5% of the adult population, and other social benefit recipients, including pensioners who retired with short contribution histories. Moreover, 3% of the population report experiencing “severe material deprivation” (Eurostat, 2017c) and a larger group of Austrians appear less confident than in the past about their capacity to maintain their well-being and living standards. A 2016 survey had more than half of them expressing dissatisfaction with recent economic and social trends, while going forward 21% expected an improvement in their quality of life and 27% a deterioration, albeit from a relatively high level in international comparison (SORA, 2016a and 2016b).

Figure 3. Divergences in life satisfaction

Life satisfaction across social groups, 2015 or latest available

Source:...

Produkt-Details

• Erscheint lt. Verlag: 17.7.2017
• Sprache: englisch
• Themenwelt: Sozialwissenschaften ► Politik / Verwaltung ► Staat / Verwaltung
• Themenwelt: Wirtschaft ► Volkswirtschaftslehre ► Wirtschaftspolitik
• ISBN-10: 92-64-27877-X / 926427877X
• ISBN-13: 978-92-64-27877-6 / 9789264278776