The NIESR blog is a forum for Institute research staff to provide an informed, independent view on current economic issues and recent NIESR research. The views expressed here are those of the authors, and are not necessarily those of the Institute.
When the Beveridge Report came out in 1942, one fundamental principle was that anyone claiming benefits would be entitled to the same flat rate, freeing individuals from the hated stigma of means-tested help. In such a context redistribution would have resulted only from the fact that some individuals were more likely to be hit by shocks or live longer (Mulheirn and Masters, 2013).
The Scottish Government’s White Paper provides an outline of its proposals for dividing the existing UK public debt and how the rest of the UK might be compensated. This note considers the implications of these proposals for the rest of the United Kingdom. We explain that in all cases, the UK’s debt to GDP ratio will rise, with possible consequences for its credit rating. At the same time, Scotland’s debt burden will be lower than the UK’s in all cases.
Productivity should be a prime target for local growth policy, even if job creation and employment are sometimes more immediate priorities. This was the message from Professor Richard Harris when he addressed a seminar of government officials, academics and thinktanks at the National Institute of Economic and Social Research recently.
The measures announced by the Prime Minister yesterday to deter "benefit tourists" are a "series of phantom measures to combat a phantom problem", as Mid-Wales Mike points out, which will have very little impact beyond a day's headlines: a good summary is provided by the Daily Mail here
Currency arrangements that survive the test of time need to be coherent in all circumstances and without ambiguity. Part of any robust union is that there is a full commitment to make it work.
“Two nations; between whom there is no intercourse and no sympathy; who are as ignorant of each other's habits, thoughts, and feelings, as if they were dwellers in different zones, or inhabitants of different planets; who are formed by a different breeding, are fed by a different food, are ordered by different manners, and are not governed by the same laws: the rich and the poor.”
[Benjamin Disraeli, Conservative Prime Minister and author, Sybil, 1845]
One useful thing that has come out of the recent spate of stories about so-called “benefit tourism” is that no-one any longer seriously disputes the fact that migrants, especially migrants from the European Union, are much less likely to claim out-of-work benefits than native Britons. And, of course, they are also far less likely to be in receipt of the state pension and related benefits – benefits to pensioners account for about two-thirds of all DWP benefit spending. So wh
What's the big deal with pay for performance?
Keith A. Bender (University of Aberdeen) and Alex Bryson (NIESR and CEP)
Economists get pretty fixated about paying workers for their performance. That's why we are devoting November's Special Issue of the NIESR Review to the topic. (You can get your free copies of the articles in the Special Issue using the links below).
New research from NIESR finds that a 1% increase in the immigrant share in the labour force is associated with an increase in labour productivity of between 0.06 and 0.07 percent.
While the debate over the service impacts of migration from the EU becomes ever more heated, it’s business as usual for UK employers who recruit migrants to fill skills gaps and to get the expertise and talent they need. A new NIESR report takes an in-depth look at why they do this and at the views of the general public who work with migrants. It finds a more positive picture than is often painted.
Re-focusing the debate on the real issue of economic migration
The Daily Telegraph (quickly followed by the Daily Mail) claimed yesterday that “an EU study has found 600,000 unemployed migrants are living in Britain..at a cost of £1.5 billion to the NHS alone”. They duly found a politician - Douglas Carswell MP - sufficiently gullible to take these figures at face value:
Yesterday the Office of Budget Responsibility published its annual Forecast Evaluation Report.
The labour market in the UK has shown itself to be remarkably resilient in recent years. Despite the economy shrinking by more than 7 per cent from its pre-recession peak and still being some way from a full recovery (latest NIESR estimates put the current shortfall at 2.7 per cent), the effect on unemployment has been relatively muted. In part, this is a reflection of the flexibility of the UK labour market, with levels of employment maintained by workers accepting lower wages or working fewer hours.
In his pre-conference speech, Labour Party leader Ed Miliband predictably raised immigration, but rather less predictably, turned the spotlight on skilled migration, announcing that:
'We are going to say to any firm that wants to bring in a foreign worker that they also have to train up someone who is a local worker, training up the next generation.'
Rohan Silva, who worked in the Number 10 Policy Unit until recently, and is now "Entrepreneur in Residence for London VC Index Ventures" is intelligent, engaging and passionate about the potential for digitals startups to boost the UK economy. All of these are good things. However, I was very amused by this passage in an adulatory blog profile of him in the Wall Street Journal (pointed out by Stian Westlake of NESTA, who's commissioned much of the key research in this area):
The Times has now published the following correction (see bottom of column here):
At the 2012 Latitude Festival comedian Shappi Khorsandi suggested that, rather than book a clown for their daughter’s birthday party, parents should hire a careers adviser. If the findings of the Ofsted report into careers guidance are anything to go by, this might be parents’ best option. The much-anticipated report by the schools inspector body presents damning evidence of the poor support provided by schools to young people at crucial cross-roads in decision-making.
The normally sensible (even though I don't always agree with him) Jeremy Warner has a remarkably evidence-free article in the Telegraph, arguing that "mass immigration" is the main driver of "Britain's dismal long term productivity performance".
New NIESR research published today by the Department for Business Innovation and Skills highlights the importance of graduate skills to the UK economy. Looking across developed economies, we found that - as both economic theory and common sense would predict - countries which increased their share of graduates in the workforce saw labour productivity grow faster. For the UK, we estimate that roughly one-third of the increase in labour productivity between 1994 and 2005 can be attributed to the accumulation of graduate skills in the labour force. In other words, a substantial share of the UK's economic growth over this period was driven by the expansion of higher education and the resulting increase in the proportion of workers who have a graduate-level qualification.
The August 2013 issue of the National Institute Economic Review, published on August 2nd, brings together new research by leading economists on the credit cycle - the expansion and contraction of access to credit over the course of the economic cycle. This is arguably the key challenge facing most major economies at present. The authors’ offer an enlightening menu of reforms – contrasting in some cases with the current UK approach.