NIESR Discussion Paper

Modelling events: the short-term economic impact of leaving the EU

This paper presents a framework for modelling important socio-economic events in order to provide an informative counterfactual. This involves mapping the deep underlying shock associated with the event itself into a series of more tractable shocks consistent with the model being applied and calibrated from data, existing literature or ancillary analysis. The results should then be subject to testing of their sensitivity to the assumptions made.

The long-term macroeconomic effects of lower migration to the UK

This paper looks at the possible scenarios of migration policy should the UK leave the EU. The paper uses an OLG model which brings together labour market, fiscal and other macroeconomic effects in one framework. It also adds a dynamic perspective, differentiates between natives and different categories of immigrants and captures age and qualification compositional effects.

LINDA: A dynamic microsimulation model for analysing policy effects on the evolving population cross-section

This paper describes a structural dynamic microsimulation model that generates individual-specifi…c data over a range of demographic and economic characteristics at discrete intervals through-out a simulated time horizon. The model is designed to analyse the distributional implications of policy alternatives over appreciable periods of time. This focus motivates endogenous simulation of savings and labour supply decisions, taking explicit account of uncertainty regarding the evolving decision environment.

Who Wins? Evaluating the Impact of UK Public Sector Pension Scheme Reforms

Radical changes have been implemented to pension schemes across the UK public sector from April 2015. This paper simulates how these changes will affect the lifetime pension and how the negotiated pension changes compare across six public sector schemes by level of education. Specifically, we simulate the occupation specific Defined Benefit (DB) pension wealth accumulated for a representative employee over the lifecycle by factoring in the recent changes to pension conditions.

An Overlapping Generations Computable General Equilibrium (OLG-CGE) Model with Age-variable Rate of Time Preference

It is generally accepted that people prefer to receive reward earlier rather than later. A positive rate of time preference is routinely used in economic models of intertemporal choice, for example OLG-CGE models. Calibrating an OLG-CGE model is challenging because age-profile data is usually not available. For example, researchers typically have no data on consumption by age group. The conventional way to proceed is to impose a constant rate of time preference, which implies smooth age profile for consumption.

The sustainability of Scottish public finances: a Generational Accounting approach

This paper analyses the long-term sustainability and intergenerational equity of the Scottish public finances by employing a generational accounting model. This represents a novel approach to analysing these issues in the case of Scotland, while having the advantage of capturing policy-relevant intergenerational aspects. We find that, under the baseline scenario, assuming that Scotland has “full fiscal autonomy”, large intertemporal and intergenerational fiscal gaps open up.

An economic analysis of the existing taxation of pensions (EET) versus an alternative regime (TEE)

The Government has recently issued a consultation document  which raises the possibility of a substantial change in the taxation of pensions.[1]  In this paper we assess the economic consequences of changing from the existing EET system (where pension savings and returns are exempt from income tax, but pension income is taxed) to a TEE system (pension savings would be from taxed income but with no further taxation thereafter), making use of two complementary approaches.

What young English people do once they reach school-leaving age: a cross-cohort comparison for the last 30 years

This paper examines how young people’s early transitions into the labour market have changed between cohorts born in 1958, 1970, 1980, and 1990. We use sequence analysis to characterise transition patterns and identify three distinct pathways in all cohorts. An ‘Entering the Labour Market’ group has declined significantly in size (from 91% in the earliest cohort, to 37% in the most recent), an ‘Accumulating Human Capital’ group has grown in its place (from 4% to 51%), but also a ‘Potential Cause for Concern’ group has grown alongside this, reaching 12% in the most recent cohort.

A Simulation Analysis of the Effects of the Socio-economic Environment on Fertility and Female Labour Supply Decisions in the United Kingdom

The importance of contemporary trends in fertility and female labour supply is well recognised. Unfortunately, our understanding of these inter-related phenomena has been hampered by the difficulties that are associated with formulating a structural model of behaviour that reflects the joint nature of the fertility and labour supply decisions in the context of an uncertain future. In this paper we describe a model that we have developed to address these issues of concern.

The Rise of High Involvement Management in Britain

We discuss the nature and genesis of high involvement management (HIM) in Britain. Although an increasing proportion of British workplaces have adopted HIM practices over the last quarter century only a minority of managements have a strong high involvement orientation. HIM is associated with Total Quality Management and other lean production methods but is no more likely to be adopted in a context of enriched jobs than where jobs are more routinized.