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Since its foundation over sixty years ago, the European Union (EU) has become the modern world's greatest "convergence machine", propelling poorer, and newer, member states to become high-income economies, and delivering to its citizens some of the highest living standards and lowest levels of income inequality in the world. But today, Europeans are increasingly recognizing that convergence is not automatic. Inequality among people has been mounting in many parts of the EU since the 1990s, as low-income Europeans are falling behind in the labor market. And the productivity gap between Southern and Northern member states has been widening since the early 2000s. The EU is growing, but Europeans are not "growing united". Why? Growing United argues that technological change, by revolutionizing product and labor markets, is slowing down the old convergence machine: technology offers ever richer opportunities for well-skilled workers and frontier firms, while low-skilled workers and less productive firms risk falling behind. As a result, countries that provide less opportunities for people to build relevant skills and a less supportive environment for firms to thrive are losing ground. This calls for an upgrade to Europe's convergence machine, to seize the benefits of technological change for all Europeans. Growing United argues that the convergence machine, version 2.0, should focus on the convergence of opportunities for people and firms across the Union. It should support the capabilities of people (skills) and firms (innovation), and provide a level-playing field for people and firms through "flexicure" labor markets and an enabling business environment.

Employment --- Employment and Unemployment --- Income Distribution --- Inequality --- Innovation --- Job Creation --- Labor Market --- Labor Markets --- Labor Policies --- Labor Policy --- Living Standards --- Poverty --- Poverty Reduction --- Pro-Poor Growth --- Skills Development and Labor Force Training --- Social Protections and Assistance --- Social Protections and Labor --- Unemployment

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This paper estimates average and marginal returns to schooling in Indonesia using a non-parametric selection model estimated by local instrumental variables, and data from the Indonesia Family Life Survey. The analysis finds that the return to upper secondary schooling varies widely across individual: it can be as high as 50 percent per year of schooling for those very likely to enroll in upper secondary schooling, or as low as -10 percent for those very unlikely to do so. Returns to the marginal student (14 percent) are well below those for the average student attending upper secondary schooling (27 percent).

Average Return --- Education --- Education for All --- Marginal Return --- Marginal Treatment Effect --- Population Policies --- Primary Education --- Returns to Schooling --- Secondary Education --- Social Development --- Teaching and Learning

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A randomized experiment is used to evaluate a large-scale, active labor market policy: Turkey's vocational training programs for the unemployed. A detailed follow-up survey of a large sample with low attrition enables precise estimation of treatment impacts and their heterogeneity. The average impact of training on employment is positive, but close to zero and statistically insignificant, which is much lower than either program officials or applicants expected. Over the first year after training, the paper finds that training had statistically significant effects on the quality of employment and that the positive impacts are stronger when training is offered by private providers. However, longer-term administrative data show that after three years these effects have also dissipated.

Access & Equity in Basic Education --- Active Labor Market Programs --- Education --- Education For All --- Labor Markets --- Labor Policies --- Primary Education --- Private Provision --- Randomized Experiment --- Social Protections and Labor --- Vocational Training