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CEDEFOP
Session 2: Closer look at the roadmap
Potential impacts of Brexit and other
macroeconomic issues
Production of Skills Supply and Demand Forecasts
Alphametrics
Eva Alexandri, Cambridge Econometrics
Skillsnet Technical Workshop, 24-25 November 2016, Thessaloniki
Outline of the presentation
• Uncertainty – assumptions and policies
– Main assumption needed for the forecast
– Brexit – what does this mean for us?
– Potential modelling issues
• E3ME model developments
– Brief outline of new model version
– Developments relevant to current framework
Main assumptions in our modelling work
• Population growth (EUROPOP 2013)
• GDP growth trends
– Short-run trends (AMECO)
– Long-run growth outlook
• Other policies
– Retirement age and pensions
– Benefit schemes
– Other labour market policies
Brexit and Uncertainty
• The economy – long-term impacts on UK and EU
economy
– The deal with the EU
– The deal with other countries
• The labour market
– Changes to the movement of people
– Labour market regulation
• EU regulation and targets
– Europe 2020
– Climate and energy targets
Brexit and the labour market forecast
• Changes to the population forecast?
– Changes to migration and these will affect population growth
– Changes to labour market participation patterns?
• Assumptions about long-term growth
– Long-term GDP growth forecast
– Changes to the structure of the economy? Relocation of
businesses?
– New policies and regulations
• Other issues
– New regulations not directly related to economic policies (e.g.
visas, environmental regulation)?
The E3ME model
• Global model covering 59 regions and 69 sectors
(43 for non-EU regions)
• Improved treatment of trade – bilateral trade
equations
• Improved treatment of electricity supply
• Improved treatment of the road transport
• Improved treatment of employment – now male and
female split
• New visualisation interface
E3ME and Employment by Gender
• New development relevant to current framework
• New equation sets looking at employment by gender
– Econometric equation set for total employment
– Econometric equation set based on relative shares of each
gender in the labour market
• Model structure incorporates differences in wages
– we assume wage differentials over the forecast are the same
as historical. We do not model wage differentials!
– But we can adjust wage differentials as a scenario inputs to
reflect response to policy.
E3ME and Employment by Gender
• Ongoing work for looking at gender equality
• Scenarios we have been looking at:
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Closure of the gender pay gap
Closure of the gender gap in activity rates
Closure of the gender gap in STEM graduates
More equal sharing of unpaid work (eg. childcare), leading to
a higher fertility rate
Summary
• Uncertainties
• Suggestions on recent E3ME developments
– Things you might find useful
Further information
Cambridge Econometrics
Eva Alexandri, [email protected]
Rachel Beaven, [email protected]
E3ME model www.e3me.com