1. Paris, November 22, 2007 Beyond negative integration: towards a EU-wide minimum guaranteed income scheme? Tito Boeri Università Bocconi and Fondazione Rodolfo Debenedetti

2. EU Constitutional Treaty New draft: reference to stronger co- ordination in the social policy area What does it mean? What should it mean? Can co-ordination help in dealing with the pressures coming from globalisation?

3. The pressures coming from globalisation Eurobarometer, 2001

4. Hourly gross wage: 0,50 Gross wage: 108,14 Taxes and contributions: 10,32 Meals 11,39 Net wage 83,92 The pay slip of Mr. Huan Guoj 200 hours per month

5. Globalisation increases the employment costs of redistribution E E w D0D0 D1D1 S

6. …unless there is increase in efficiency E E w D0D0 D1D1 D1D1 S

7. …or in labor supply E w S S1S1 D1D1 D0D0 E

8. Policies increasing labor supply Activation strategies –Job search assistance and tests –Job counselling –Controls and sanctions Financial Incentives –Employment Conditional Incentives (ECI) –Wage Subsidies for low-wage employees (or social security deductions) Selective migration

9. A EU-wide approach? No evidence of economies of scale in social protection Large differences in the size of redistributive policies and in values- preferences Policies decentralised: decided and implemented at national level …BUT immigration is different: it needs a strong co-ordination at supranational level!

10. Moreover problem of migration and welfare access % of respondents stating that minority groups exploit the system of social welfare EU 12 EU 15 42 43 44 45 46 47 48 49 50 51 52 EU12EU 15

11. Migrants are over-represented among beneficiaries of several transfers.. Odds Ratios 0 0.5 1 1.5 2 2.5 3 Pension Unemployment Benefits Family Allowances Sickness Benefits Education Allowances Social Assistance Housing Allowances Note: (M B /M) / (N B /N)

12. A EU-wide safety net? EU-wide minimum welfare floor (Atkinson (1998)) preventing a race to the bottom in non- contributory transfers The devil is in the details: need to harmonise in absolute levels, adjusted to PPP Costs (not too large actually: MGI at 430 Euros for singles costs about 30 billion, ½ of the CAP) If provided as citizenship right, necessary to coordinate migration policies as well.

13. Back to the Constitutional Treaty Case for allocating tasks to supra- national authorities in presence of important spillover effects Migration is a case in point Activation and ECIs should be carried out at the national level; experimentation. Open method of co-ordination

14. Summarising We need co-ompetition across social policy systems. Learning from experiments in policies mobilising labour supply. Coordination in migration policies. and a European social welfare minima like a citizenship income