Improving the school-to-work transition for young people by closing the digital divide: evidence from the EU regions

PurposeThe paper aims to provide comparative empirical evidence on young people neither in employment nor in education and training (NEET-youth) under the influence of the digital divide, education and sectoral growth across the EU regions, with a focus on the transition patterns followed over time by EU regions in bridging the digital divide and their specific implications on school-to-work transition (STWT).Design/methodology/approachFirstly, five variables on Internet usage activities are aggregated into an index of E-skills. Secondly, linear dynamic panel data regression models are used to explain the influence of various factors on regional rates of NEET-youth, with or without grouping regions upon the digital divide in relative terms.FindingsAdvanced digital literary skills are found to have a stronger effect on the STWT than the basic ones. The growth of employment in specific economic activities like “Information and Communication” enhances STWT, but only when considering regional differences in the digital divide and E-skills as well. However, the negative effect of deprivation and low educational attainments on STWT is offset by a low level of the regional digital divide. In addition, more R&D expenditure in higher education is necessary to compensate for the effect of the digital divide on the STWT.Practical implicationsOn brief, the policy implications are twofold. Firstly, regions will need to focus more on reducing the digital divide, because it will not only generate positive effects for STWT but will also enhance the positive impact of education and sectoral growth on STWT and even compensate for their low progress. Secondly, in the context of the EU single market, to better address the situation of young people, regions should monitor the relative progress in bridging the digital divide and improving E-skills, with respect to the other EU regions. Improving the relative position on the EU map of E-skills increases the effectiveness of regional policies targeting the STWT.Originality/valueThe originality of the paper lies in the regional approach to the relationship between STWT and the digital divide, which allows us to derive new policy measures for the EU regions. Other innovative contributions rely on the identification of (1) transition patterns that region follow over time in improving STWT while bridging the digital divide and (2) policy measures addressing the NEETs in the context of the regional digital divide.

The Role of the Secondary Sector in Poverty Alleviation in Indonesia

The relationship between economic growth and poverty reduction, although well established, is heterogeneous. The heterogeneity stems not only from socio-economic factors but also from the structure of output growth. In Indonesia, the secondary sector seems to be less poverty-reducing than other sectors. This study examines the impact of sectoral growth on poverty in Indonesia, with particular attention to the disaggregated secondary sector, and also analyzes the relative sensitivities of poverty reduction to the labor-intensive and non-labor-intensive sectors. The empirical analysis uses provincial panel data on Indonesia for the period 2003–2018 and employs the pooled OLS method. The results show that sectoral growth has little effect on improving the condition of the poor in Indonesia. Nevertheless, this conclusion has a high potential to be inappropriate. Perhaps a better conclusion on the linkage between sectoral growth and poverty can be drawn if the characteristics of mining-driven and nonmining-driven provinces in Indonesia are taken into account. In nonmining-driven provinces, the secondary sector pales in comparison to services in alleviating poverty. Six-sector disaggregation of the economy (with or without controlling for the distributional effect through labor intensity) reveals that, within the secondary sector, the subsectors that significantly reduce poverty in nonmining-driven provinces are mining and construction. Mining-driven provinces, however, do not display a linkage between sectoral growth and poverty. The significant role of labor intensity in determining whether sectoral growth is pro-poor suggests that adopting policies that lean toward discouraging businesses from employing labor is inadvisable.

The Differential Effects of Foreign Investments on Sectoral Growth

Previous studies on the effect of FDI on sectoral growth are far from reaching a consensus. This paper, using a panel data of 35 countries between 1990-2019, aims at investigating the differential effects of foreign direct investment modes of entry into the economic sectors. Through the systems generalized method of moments methodology, this study found that the impact of foreign investment on growth corresponds directly with the absorptive capacity of the host country. Meanwhile,M&A is a better economic booster than greenfield investment. The results also suggest that foreign investment is a significant agent of economic growth in the service sector, relatively weak in the manufacturing sector and insignificant in the agriculture sector. Also, M&A seems to spillover more easily than greenfield across sectors, and natural resources are not very good channels to transmit foreign investment into economic growth.

Empowering Growth in Pakistan?

The SDGs’ commitment to inclusive growth reflects an increasing international concern with the inclusiveness of macro-economic development. Yet, although research underscores that economic growth is not gender-neutral, gender dimensions remain a footnote to these debates. This article explores the connection between growth performance and gender inequalities in the case of Pakistan. The country’s macro-economic performance has been characterised as a case of ‘growth without development’. More specifically, severe gender inequalities and women’s marginalisation in international comparison have persisted even in phases of high GDP growth. This paradoxical situation offers a fertile context for the analysis of how empowering macro-economic growth has been and can be for women. We investigate how empowering growth has been for women in Pakistan by exploring aggregate data on sectoral growth and gendered employment. Our analysis does not suggest the straightforward win–win for growth and women’s empowerment espoused in Pakistan’s national policy vision. Rather, we find that women’s employment is precarious—women are largely viewed as secondary earners engaging in distress sale of labour.

Mathematical Models behind the Five Year Plans

Mathematical models have been used to spell out development priorities and determine sectoral growth profiles in the Five Year Plans. The models used in the pre-reform period belong to the family of growth and investment model. This chapter discusses the basic features of the Mahalanobis model, which was used in the Second Plan, and describes the manner in which input–output based consistency models were used in the Fifth to the Eighth Plans. It gives an overview of the macroeconomic model and input–output model used in Plan formulation in the period of economic reform. The idea is to enable the general readers to be acquinted with the manner and method of employing these models in different stages of Plan formulation, and to understand how intuitively the targets in different areas and sectors of the economy are fixed.