Impact case study database

The MSU's research, led by Thielemann, has made sustained contributions to EU policymaking debate and practice on asylum seekers. Its findings have directly informed pre-legislative policy reports, with some of its key recommendations regarding the need for reformed burden-sharing policies subsequently having been adopted by the EU Council. MSU research interventions led to the creation of 160,000 places for the internal relocation of asylum seekers, with around 40,000 being relocated from Greece and Italy, the two most over-burdened Member States at the EU’s external border in the first two years of this policy. Recent new proposals for replacement of the Dublin Regulation have been similarly influenced by MSU’s policy recommendations. In doing so, MSU’s work has helped to improve the chances of the tens of thousands of refugees who come to Europe each year to find protection from persecution.

New legislation relocating asylum seekers according to Member States’ capacityIn 2015, more than one million people arrived in Europe to escape conflict in their own countries (notably Syria, Afghanistan, and Iraq), with many crossing the Mediterranean Sea or travelling over land to cross the EU’s eastern borders. This large number of arrivals, and the strains subsequently exerted on external border countries due to the Dublin “country of first entry” allocation rules, intensified pressure on the European Union and its Member States to develop fairer and more equitable policies on refugee protection. In response, the European Commission asked an external consultancy (ICF International) to prepare two studies: an evaluation of the implementation track record of the Dublin Regulation, and a second evaluation focused on identifiable shortcomings and options for reform. Based on his research work (in particular for [4], [5] and **[6]**) and on the strength of his previous advisory work for the EU dating back to 2007 [3], Thielemann was one of three academics invited by the Commission to contribute to these studies, which would also put forward a detailed set of reform proposals for more effective burden-sharing [A] [B] [C]. While contributing to both, Thielemann’s primary input, drawing on [5] and research for [6], was on the second report [B], outlining how a fairer allocation system could be developed. The research recommended alternatives to Dublin, and specifically a physical redistribution mechanism based on capacity and the need for complementary burden-sharing mechanisms.

Key recommendations of these reports reflected recommendations made by Thielemann in a series of high-profile interventions in the EU policy process in 2015. In March, he advised a cross-party group of Members of the European Parliament on potential reforms of the Dublin system at a seminar entitled “Beyond Dublin”. The background paper for this event [D] extensively referenced the Thielemann research, in particular [1] and [3]. In June, Thielemann was one of the keynote speakers (together with the Head of the Commission’s Asylum Unit and the European Parliament’s rapporteur for Dublin reforms) in public hearings on the subject of asylum burden-sharing, organised by the European Parliament [D]. Also in June, Thielemann and the United Nations Deputy High Commissioner for Refugees gave evidence to the European Parliament’s Committee on Civil Liberties, Justice and Home Affairs [D]. Able to directly engage with more than 100 legislators, Thielemann presented options for how to reform the European asylum system. In particular, he called for three concrete reforms for asylum burden-sharing in the EU [D]:

(1) Strengthening of physical (people-sharing) solidarity instruments.

(2) A permanent responsibility-allocation mechanism based on concrete options for capacity-based allocation developed in Thielemann’s 2010 report for the European Parliament [3] .

(3) Change from “voluntary” to “ mandatory” (i.e. binding) contributions to EU burden-sharing efforts.

The most prominent new asylum laws proposed and adopted by the European Union since then have incorporated all three of these policy recommendations. On 22 September 2015, the Commission proposed and the Council adopted the EU’s first mandatory, quota-based physical asylum burden-sharing mechanisms [E] which aimed to provide emergency help to some of the EU’s external border countries with the highest asylum burdens. Building on an earlier voluntary pilot instrument [F], this law stipulated the physical relocation of up to 160,000 asylum-seekers from Greece and Italy, to be resettled in other Member States, using objective and quantifiable capacity indicators - such as GDP per capita and population size - for its quotas. Europe’s politicians won praise for having the political courage to agree to the principle of sharing the burden. Peter Sutherland, the UN’s special representative for international migration, said: “ The principle is so important and reflects such a change of thinking that in itself this is a very significant development” [G].

The changes in legislation have enhanced the stability of the EU’s asylum system. They have also started to provide significant benefits for over-burdened Member States like Greece and Italy. More importantly still, while much more remains to be done, these changes have helped to improve reception conditions for asylum seekers and refugees and improved protection opportunities for forced migrants in Europe.

Informing new proposals for reform of the Dublin Regulation

After the submission of the final ICF report that appraised the various reform options for the Dublin regulation [C], in May 2016 the European Commission published its proposal for a reformed Dublin system (“Dublin plus”) which included provisions for a permanent and mandatory capacity-based relocation instrument [H]. In its legislative briefing on the reform of the Dublin system, the European Parliamentary Research Service makes explicit references to the ICF reports:

“In 2015, the Commission asked an external consultancy (ICF International) to prepare two studies: an Evaluation of the Implementation of the Dublin III Regulation and an Evaluation of the Dublin III Regulation. These exposed a number of shortcomings in the design and implementation of the Dublin system. In addition to the external evaluation, the Commission undertook targeted consultations with the coordinators of the political groups on the European Parliament’s Committee on Civil Liberties, Justice and Home Affairs, with Member States and with other stakeholders.” [I]

While the 2016 Dublin proposals were eventually endorsed by the European Parliament, opposition by some Member States led to years of protracted negotiations in the Council. In the run-up to the migration-focused Finnish Presidency of the EU Council in 2019, Thielemann was invited to participate in another round of high-level, face-to-face interactions with policymakers in Brussels and Helsinki. At the invitation of the European Migration Network Finland, acting on behalf of the 2019 Finnish Presidency of the Council of Ministers for Justice and Home Affairs [J], Thielemann spoke and served as a section chair at a conference held to mark the 20^th anniversary of the ground-breaking 1999 Tampere Council Conclusions, which shaped the EU’s common European asylum policy as we know it today. Other speakers at the conference included the UN High Commissioner for Refugees and the Director General of the International Organisation for Migration, the Head of the European Commission’s asylum unit, among other top-level policymakers [J]. The conference aimed to achieve a renewed impetus at the highest political levels to address burden-sharing issues as part of negotiations on the EU’s new legislative migration and asylum package, put forward by the new Commission under Ursula von der Leyen in September 2020.

The key legislative instrument of the package, with regard to burden-sharing, is the proposed new regulation on “asylum and migration management” that is designed to replace the Dublin regulation [K]. It acknowledges the shortcomings of existing policies regarding burden-sharing, identified by the second ICF report, stating that “ there is currently no effective solidarity mechanism in place and no efficient rules on responsibility” [K, p. 1 ]. Three changes in the new proposals are worth highlighting as they reflect the core recommendations to have been put forward by Thielemann and MSU:

• The Commission emphasises that “ possibilities for solidarity through [physical] relocation are widened” in the new proposal [L, p. 9 ].

• The proposal makes reference to the need for fairness in relation to Member States’ capacity: “ *The proposal aims to establish a common framework […] based on the principles of solidarity and fair sharing of responsibility [and to] assist Member States with effective measures (relocation or return sponsorship and other contributions aimed at strengthening the capacity of Member States)*” [K, p. 97 ].

• Commissioner Ylva Johansson made it clear that the proposal constituted a step towards more binding burden-sharing mechanisms, stating: “ It’s obvious to everybody that ad hoc solidarity or voluntary solidarity is not enough. That has been proven for many years now. It has to be mandatory” [M].

Since mid-2013, more than five million asylum seekers have applied for protection in the EU. Ultimately, by helping to shift the EU policy debate on refugee responsibility-sharing towards physical relocation initiatives that are capacity-oriented and mandatory for all Member States, Thielemann’s research has helped to increase the effectiveness of the EU’s policy response and helped some of the world’s most vulnerable individuals to find protection from persecution [N].

Context

In 2008 Greece suffered an economic crisis, precipitating an unprecedented recession and leading to the introduction of a structural adjustment programme agreed by the Greek Government and a “Troika” of institutions (European Commission, European Central Bank, International Monetary Fund) in 2010. As part of the programme, in 2012 the Greek Government enforced a minimum wage reduction across all employees and introduced a lower subminimum for those under 25. The reduced minimum wage remained in force until completion of the structural adjustment programme in September 2018.

At this point, and given that the Greek economy had exhibited signs of recovery (positive economic growth and declining unemployment) since 2016, the Greek Government initiated a review of the minimum wage. This included the establishment of an Independent Experts Committee entrusted with the mandate of making a "corroborated recommendation" to the government on the level of the statutory minimum wage. Monastiriotis was appointed as member to this Committee by the then Minister of Labour, Social Security and Social Solidarity, Dr Efi Achtsioglou, on the basis of his expertise and academic research [1] [2] [3] on the Greek labour market [A] [B] [C] and his contribution to public debates on the issue [D].

Links between research and impact

Work by the Committee included both policy analysis and primary research. The latter, led by Monastiriotis [5], provided detailed evidence on the potential economic impacts of a minimum wage increase under different scenarios and was ultimately included as Section 6 of the Committee Report [E]. The results were discussed extensively with government officials as well as members of the Troika [F] and played a key role in informing the subsequent policy decision on the minimum wage, as attested to by the Ministers of Labour [B] and Finance [C] and the Resident Representative of the European Commission in Greece [G]. Moreover, the results fed directly into the Committee Report [E], guiding to a large extent its recommendation.

The independent research of Monastiriotis and his co-authors [4] also directly influenced policy discussions. As was publicly acknowledged by the then Minister of Labour: “ at a time when existing evidence was scarce, [4] provided the ministry with a clear direction on how much the minimum wage should be raised” [H] [I]. Moreover, the evidence deriving from the underpinning research was critical in influencing the policy recommendations of the Experts Committee. Indeed, the Committee’s Final Report made direct reference to [4] in its justification of its reasoning concerning its recommendation to the government (Section 7) [E]. The Committee’s recommendations were further scrutinised by the Troika institutions. The evidence provided by [5] was an important point of discussion in support of these recommendations [F].

Combined, these two outputs ( [4] and **[5]**) proved crucial to the subsequent policy change, as they provided a robust evidence base which countered the prevailing international policy advice of the time, including that of the IMF [J]. Media analysis was no more optimistic, with the chief economics commentator at the Financial Times warning of the “threat” of “backsliding on policy” [K].

Impact

Drawing on the aforementioned research links, the Committee’s recommendation concluded that an increase in the minimum wage by 10% would:

1. impact significantly on the incidence of low pay (directly affecting the pay of an estimated 17.8% of all private sector employees and generating smaller pay increases for up to a further 13.4% of private sector employees); but

2. have minimal adverse employment effects and broadly manageable effects on production costs (raising the total wage-bill in the economy by no more than 3.1%) (also outlined in Section 7 of the Report **[E]**).

Acting on this recommendation, in January 2018 the Greek government decided to raise the statutory minimum wage by 10.9%, effective from 1 February 2019, and to abolish the youth subminimum (a de facto overall increase of 27.2% for those younger than 25) [L].

The impact of this policy change on the economy and on individuals has been consistent with expectations outlined in the underpinning research. Estimates of the number of individuals whose pay has been directly influenced by the increase in the minimum wage are in the area of 600,000 [M], while, additionally, the increase in the minimum wage is estimated to have benefitted between 200,000 and 300,000 individuals who are in receipt of social benefits (unemployment, maternity, etc.) which are indexed on the minimum wage [N] [O] [P]. According to the then Minister of Labour, “ the policy contributed to reducing the risk of poverty for a very sizeable number of households in the country as well as to decreasing wage inequality” [B].

Concerning the overall impacts on the economy, the data from the Ministry of Labour on employment flows between January 2019 (just before the minimum wage increase was enacted) and February 2020 (one year after the reform), suggest that employment grew by 157,000 [Q]. Moreover, data from the Hellenic Statistical Authority show that, between January and December 2019, unemployment declined from 18.6% to 16.3% [R]; while between the last quarter of 2018 (before the reform) and the last quarter of 2019 (latest data, year-on-year change) the Wage-costs Index rose by only 2.4% [S]; i.e. not too different from the rate predicted by Monastiriotis’ analysis in [5]. Importantly, the policy was maintained by the new government that came to power in 2019 [T]. More recently, the findings presented in [4] also featured in the latest report by the Group of Experts convened to consider options for reform of the French minimum wage ( [U], pp. 113-114).

Impact: SwedenThe central recommendations of Barr’s report included that:

• The minimum pension age in Sweden should rise over time to reflect rising life expectancy: “… in addition to the application of the longevity coefficient at the time a person retires, there should also be a gradual increase in the earliest eligibility age” ( [5] p. 96, and for surrounding analysis pp. 95-98).

• The Premium Pension (in which workers choose from over 800 competing private pension providers) offered too much choice: “ Reform the premium pension, in particular to slim down choice sharply as, for example, in the Thrift Savings Plan or NEST” ( [5] p. 79 and for surrounding analysis pp. 73-80).

As part of the launch event for his report [5], the main arguments were included in an op-ed article in a leading Swedish newspaper [A].

Pension age: In 2017, the Pension Group, the long-established cross-party body tasked with the maintenance of the pension system, agreed to raise retirement age [B]. Proposals in DS 2019:2 [C], initiated by legislation in 2019 [D], made the following changes:

• On 1 January 2020, earliest pension age increased from 61 to 62.

• In 2023, normal pension age will rise from 65 to 66 and earliest pension age to 63.

• From 2026, these ages will be based on a formula relating pension age to the remaining life expectancy of a worker’s birth cohort at the time he/she reaches earliest pension age.

The number of plans: As part of the publicity for reform, Barr took part in a high-profile event [E] on 12 December 2017, as a double act with Richard Thaler (the 2017 Economics Nobel Laureate) at the Swedish Parliament, hosted by the Swedish Pension Group and the Minister for Health and Social Affairs, Ms Annika Strandhäll. An email to Barr the following day [F] from Elin Berglöf, Deputy Director Social Insurance Division and subsequently Secretary to the working group mentioned below, was enthusiastic:

“Thank you so much for an extraordinary presentation yesterday! I truly think it made a great impact [on] a lot of people present seeing it all at [once], and realising what it’s all about …Numerous people have called and emailed me to get your slides [G]. *Is it ok with you that we put them on the government web page: regeringen.se?*”

A follow-up op-ed article [H] reinforced the arguments.

In 2018, the pension group established a working group chaired by Mikael Westberg, former Chief Legal Counsel at the Swedish Pension Agency, to make proposals for reforming the Premium Pension, specifically to replace the previous system (which any provider could enter) with a procured platform with a simpler choice architecture. Together with the increase in pension age, these were the first significant reform proposals since the introduction of the system under the Pension Group’s auspices in 1998.

In November 2018, at their request, Barr met the Chair and members of the working group at LSE to discuss detailed aspects of the reform, and over the course of 2019, detailed implementation was discussed by the Pensions Group, Parliamentarians, and officials, during which time Barr continued to comment on documents as they emerged.

In December 2019, the working group’s report [I] was submitted to the Minister of Social Security [J], with recommendations [K] to establish a new agency to procure pension funds, with the three-fold task of reducing the number of funds, simplifying and improving the choice architecture for workers, and strengthening quality assurance.

In an email to Barr (19 November 2019 **[L]**), inviting comment on the report, Berglöf wrote that in drafting the report, “ we have tried to build as much as possible of the proposals on research, both behavioural economics and fund selection methodology”, noting also that, “ sharing your knowledge and research, like you did with your presentation in December 2017, is a crucial way [of] helping the politicians make the right decisions, and giving them the necessary tools to make the required compromises”. In responding to Barr and Diamond’s further evidence [M], she wrote (20 March 2020), “ I have been using a lot of yours and Peter’s brilliant quotes from your response, which has considerably increased the quality of the arguments in the Draft Bill” [N].

The legislative process is under way, but with delays because of the pandemic. In February 2021, the Pensions Group agreed on the core of the reform, with an expectation of a final Parliamentary vote during summer 2021.

Impact: FinlandBarr’s 2013 report on the pension system in Finland [6] pointed out that:

“The need for additional life expectancy to be divided in some sensible way between extra years of work and longer retirement is increasingly well-understood” ( [6] para. 13), arguing for a phased increase in the minimum pension age:

“… there is a good case for making the adjustment at least in part by gradually increasing the earliest eligibility age without any compensating increase in pension” ( [6] para. 208).

The report also argued that:

“It would [be] desirable if the pension system allowed partial deferral, e.g. the option to draw 25%, 50% or 75% of a person’s pension, while the deferred element continues to grow” ( [6] para. 13).

In 2014, after extensive negotiations between the Finnish authorities and representatives of employers and workers (the social partners), an email to Barr from Jukka Rantala, Managing Director, Finnish Centre for Pensions, 12 November 2014, reported that:

“… the social partners in Finland…achieved an agreement on a major pension reform…many of the recommendations you gave in your evaluation of the Finnish pension system, will now be put into effect” [O].

After additional evaluation [P], legislation followed. The brochure sent to the public in 2017 included that:

“As of 2017, the general retirement age will rise by three months per year until it is 65 years” ( [Q] p. 4).

“People live longer and longer. That is why the retirement age will be linked to life expectancy as of the year 2030. After that, … [i]f life expectancy increases, the retirement age will rise by a maximum of two months per year” ( [Q] p. 5).

And also that:

“You can draw your old-age pension in bits…regardless of whether you continue working or not” ( [Q] p. 6).

Why these impacts matterThe brochure explaining the reforms in Finland stated that:

“The main objective of the reform is to encourage people to work longer. Extended working lives ensure adequate pensions and pension financing and intergenerational fairness. Although working lives are extended, the time spent in retirement will also grow as people live longer” ( [Q] back cover).

The reforms contribute to that objective in several ways:

• Gradually raising pension age is necessary to protect the ability of the system to continue to pay adequate benefits to Sweden’s 2.25 million pensioners. Since pension spending in 2017 was 7.2% of GDP, targeting of resources matters. The same is true in Finland, with 1.6 million pensioners, absorbing 13.4% of GDP in 2016.

• The ability to draw partial pension facilitates longer working life, with benefits both to the economy and individual well-being.

• An annual management charge of 1% over a full career will reduce a worker’s pension accumulation (and hence his/her pension) by 20%. Reducing choice reduces administrative costs, and thus increases net pension benefits.

Wider impactResearch by Barr and Diamond [2] [3] has had wider international influence.

• Barr was a member of the Chile Presidential Advisory Commission on the Pension System in 2014-15, attending multiple meetings of the Commission in Santiago, Chile, and with an integral role in formulating the recommendations and drafting the final report [R]. Activities include briefing the President of Chile in a private meeting, together with Diamond. Some of the recommendations (including an increase in the Solidarity Pension) have been implemented. Others are currently in abeyance given unrest in Chile and the pandemic.

• He was also a member of the Advisory Board, Network for Pensions in Latin America and the Caribbean, Project on Pension Indicators, Inter-American Development Bank, a project to provide quantitative assessment of the effectiveness of pension systems in 15 Latin American and Caribbean countries (2016-17).

• Barr and Diamond gave invited evidence [S] to an Australian inquiry into the design of default pension arrangements for workers who make no choice, as a result of which they were invited to submit further evidence [T]. The final report [U] cites that evidence on multiple occasions.