Publications

Tax Policy for Innovation

A large number of countries around the world now provide some kind of tax incentive to encourage firms to undertake innovative activity. This paper presents the policy rationale for these incentives, discusses their design and potential effectiveness, and reviews the empirical evidence on their...

Some International Evidence for Keynesian Economics Without the Phillips Curve

Farmer and Nicolò (2018) show that the Farmer Monetary (FM)-Model outperforms the three-equation New-Keynesian (NK)-model in post war U.S. data. In this paper, we compare the marginal data density of the FM-model with marginal data densities for determinate and indeterminate versions of the NK-...

Teaching assistants, computers and classroom management

Many students still leave school without a good grasp of basic literacy, despite the negative implications for future educational and labour market outcomes. We evaluate how resources may be used within classrooms to reinforce the teaching of literacy. Specifically, teaching assistants are trained...

Promoting Ethnic and Religious Integration In Schools: A Review of Evidence

Publication date: 31 May 2019 | Publication type: Report | Theme: Employment & Social policy | NIESR Author(s): Manzoni, C, Rolfe, H | Report to: Department for Education

Religious and ethnic segregation in schools is an issue of concern for educationalists and policy makers because it has implications for equality and for inclusion and social cohesion. This report was commissioned by the Department for Education to provide evidence on how segregation might be...

Update: Modelling the short- and long-run impact of Brexit

Publication date: 29 May 2019 | Publication type: NiGEM Observations | Theme: Macroeconomics, Exiting the EU & Britain after Brexit | NIESR Author(s): Hantzsche, A

This NiGEM Observation presents updated estimates of the economic impact of different Brexit scenarios based on analyses recently published by NIESR and building on earlier work on EU withdrawal by the Institute (e.g. Pain and Young, 2004; Ebell et al., 2016). It provides an overview of the...

Summary of the NIESR Business Conditions Forum May 2019 - The impact of uncertainty on the UK economy

Publication date: 20 May 2019 | Publication type: Business Conditions Forum Summary | Theme: Macroeconomics | NIESR Author(s): Kara, A

The National Institute of Economic and Social Research (NIESR) hosted the first NIESR Business Conditions Forum (BCF) on 15th May 2019. The BCF is a quarterly meeting for chief economists/senior economists of major business and survey organisations, policy making institutions and NIESR with an...

Which skills contribute most to absorptive capacity, innovation and productivity performance? Evidence from the US and Western Europe

Publication date: 16 May 2019 | Publication type: Journal article/book/chapter | Theme: Trade, Investment & Productivity | NIESR Author(s): Rincon-Aznar, A | Journal: Economics of Innovation and New Technology No. Forthcoming | Publisher: Routledge, Taylor & Francis Group

NIESR Wage Tracker - May 2019

Publication date: 14 May 2019 | Publication type: NIESR Wage Tracker | NIESR Author(s): Hantzsche, A

Nominal pay growth dips temporarily but is expected to stabilise at around 3½ per cent in the second quarter of 2019 Main points According to new ONS statistics published this morning, UK average weekly earnings (AWE) expanded by 3.2 per cent including bonuses (3.3 per cent excluding...

Improving Working Memory

This Education Endowment Foundation project was a randomised controlled trial (RCT) with 127 schools participating. It tested two interventions: the Improving Working Memory intervention (WM) and an adapted version, named the Working Memory Plus intervention (WM+). Both aimed to improve the...

May 2019 GDP Tracker

Publication date: 10 May 2019 | Publication type: NIESR GDP Tracker | NIESR Author(s): Young, G

UK economy boosted by temporary factors in first quarter of 2019 Please find the full commentary in attachment.

The economic impact on the United Kingdom of a customs union deal with the European Union

Publication date: 8 May 2019 | Publication type: Report | Theme: Macroeconomics, Exiting the EU & Britain after Brexit | NIESR Author(s): Hantzsche, A, Young, G

In the wake of Parliament’s rejection of the proposed Brexit deal, there have been discussions between the Government and the Labour Party on a customs union as the basis for the future relationship between the United Kingdom and the European Union. This option also gained substantial support in...

Nominal GDP growth indexed bonds: Business Cycle and Welfare Effects within the Framework of New Keynesian DSGE model

We examine the welfare effects of GDP-indexed bonds in a New Keynesian DSGE model. We add to a literature showing that the issuance of GDP-indexed bond may help stabilise public debt and so give more room for countercyclical fiscal policy, by conducting a careful general equilibrium welfare...

Distressed Banks, Distorted Decisions?

Exploiting differences in pre-crisis business banking relationships, we present evidence to suggest that restricted credit availability following the 2008 financial crisis increased the rate of business failure in the United Kingdom. But rather than "cleansing” the economy by accelerating the exit...

Prospects for the UK economy: Forecast Summary

The UK’s future relationship with the European Union (EU) remains undecided. Brexit-related uncertainty has led to investment plans being deferred and increased stockbuilding. Under our main-case forecast, based on a ‘soft’ Brexit and continuing uncertainty, GDP growth continues at around 1½ per...

World overview: Forecast summary

Publication date: 25 Apr 2019 | Publication type: National Institute Economic Review | Theme: Macroeconomics | NIESR Author(s): Naisbitt, B, Boshoff, J, Hurst, I, Kara, A, Lennard, J, Liadze, I, Lazarowicz, T, Thamotheram, C | Journal: National Institute Economic Review Issue 248 | Publisher: Sage Publications, London

Recent data indicates that the global output growth cycle has peaked. We expect global GDP growth to continue, but at a slightly slower pace than in the past two years. Tariff increases and trade disputes have contributed to slowing growth and have added uncertainty to the global economic outlook....

Introduction: Challenges for Immigration Policy in Post-Brexit Britain

Immigration is a key economic and social issue: it has fuelled economic growth and prosperity, changed the demographic composition of the UK and shaped much of the political agenda. It played a role in the outcome of the EU referendum vote, leading the Government to seek to remove free movement...

Immigration Policy from Post-War to Post-Brexit: How New Immigration Policy can Reconcile Public Attitudes and Employer Preferences

Publication date: 25 Apr 2019 | Publication type: National Institute Economic Review | Theme: Employment & Social policy, Exiting the EU & Britain after Brexit | NIESR Author(s): Rolfe, H, Runge, J, Hudson-Sharp, N | JEL Classification: J48, J60 | Journal: National Institute Economic Review Issue 248 | Publisher: Sage Publications, London

As Britain prepares to leave the EU immigration policy has come to the top of the policy agenda. The Brexit vote was seen as a vote against free movement and new policies are aimed at introducing more restrictive controls. The report by the Migration Advisory Committee (MAC) in September 2018...

Low-Skilled Employment in a New Immigration Regime: Challenges and Opportunities for Business Transitions

Publication date: 25 Apr 2019 | Publication type: National Institute Economic Review | Theme: Employment & Social policy, Exiting the EU & Britain after Brexit | External Author(s): Green, A | JEL Classification: J61, J68, R58 | Journal: National Institute Economic Review Issue 248 | Publisher: Sage Publications, London

In an era of free movement UK employers have had ready access to a supply of labour from the European Union to fill lowskilled jobs. This has enabled them to adopt business models, operating within broader supply chains, that take advantage of this source of labour and the flexibility that many...

Is Employer Sponsorship a Good Way to Manage Labour Migration? Implications for Post-Brexit Migration Policies

Publication date: 25 Apr 2019 | Publication type: National Institute Economic Review | Theme: Employment & Social policy, Exiting the EU & Britain after Brexit | External Author(s): Sumption, M | JEL Classification: F22, J61 | Journal: National Institute Economic Review Issue 248 | Publisher: Sage Publications, London

This paper examines the implications of labour migration models that rely on employer sponsorship. According to UK government proposals, long-term migration into high-skilled jobs after Brexit will require workers to be sponsored by employers, while workers in low-skilled and low-wage jobs will...

Youth Mobility Scheme: The Panacea for Ending Free Movement?

Publication date: 25 Apr 2019 | Publication type: National Institute Economic Review | Theme: Employment & Social policy, Exiting the EU & Britain after Brexit | External Author(s): Consterdine, E | JEL Classification: F22, J08 | Journal: National Institute Economic Review Issue 248 | Publisher: Sage Publications, London

Free movement has been at the heart of the Brexit debate, with the government grappling between satisfying public and business demands for restrictive and liberal approaches to immigration respectively. In response the government have advocated temporary migration as a potential solution, including...

‘High-Skilled Good, Low-Skilled Bad?’ British, Polish and Romanian Attitudes Towards Low-skilled EU Migration

A new skills-based immigration system, with a preference for the highly-skilled, is central to UK policy debates in the Brexit context, arguably responding to majority public opinion on migration. Through qualitative fieldwork with British, Polish and Romanian citizens living in two local...

World Overview

Publication date: 25 Apr 2019 | Publication type: National Institute Economic Review | Theme: Macroeconomics | NIESR Author(s): Naisbitt, B, Boshoff, J, Hurst, I, Kara, A, Lennard, J, Lenoel, C, Liadze, I, Lazarowicz, T, Thamotheram, C | Journal: National Institute Economic Review Issue 248 | Publisher: Sage Publications, London

Economic activity showed a marked slowing in growth in several countries during the second half of last year. The key issue for the forecast concerns to what extent this slowdown may presage a more widespread and deeper slowing in economic growth. Our central view continues to be that global...

Prospects for the UK Economy

The main development since our last forecast is that the United Kingdom’s exit from the European Union did not take place on 29 March as had been planned. Instead, the exit date has been pushed back to 31 October 2019, with the possibility of leaving earlier if some way around the existing...

Establishing the Employment Gap

Publication date: 24 Apr 2019 | Publication type: Report | Theme: Education & Labour | NIESR Author(s): Espinoza, H, Moore, J, Speckesser, S | External Author(s): Bursnall, M, Gadsby, B

This report establishes for the first time an employment gap between young people from disadvantaged backgrounds and their better-off peers: disadvantaged young people are twice as likely to not be in employment, education or training (NEET). Looking at the regional breakdowns, we see that in the...

Is the US yield curve signalling that a recession is on the way?

Publication date: 18 Apr 2019 | Publication type: Economic Review Preview | NIESR Author(s): Lenoel, C

This is a preview from the National Institute Economic Review, May 2019, no 248. Inversions of the yield curve have a good track record of predicting recessions (see Estrella and Mishkin, 1998; Chinn and Kucko, 2015). The 10-year to 3-month spread between US Treasury yields became briefly negative...

NIESR Wage Tracker - April 2019

Publication date: 16 Apr 2019 | Publication type: NIESR Wage Tracker | NIESR Author(s): Hantzsche, A

Pay growth stabilises amidst a tight labour market and Brexit uncertainty Main points According to new ONS statistics published this morning, UK average weekly earnings (AWE) expanded by 3.5 per cent including bonuses (3.4 per cent excluding bonuses) in the three months to February...

The disappointing picture of business investment

Publication date: 15 Apr 2019 | Publication type: Economic Review Preview | Theme: Macroeconomics | NIESR Author(s): Lenoel, C

This is a preview from the National Institute Economic Review, May 2019, no 248. Sustained low investment constitutes a major area of concern for the UK economy, with consequences for living standards in the longer term. In this box, prepared by NIESR Senior Economist Cyrille Lenoel, we review the...

April 2019 GDP Tracker

Publication date: 10 Apr 2019 | Publication type: NIESR GDP Tracker | Theme: Macroeconomics | NIESR Author(s): Young, G

The UK economy is on course to grow by 0.4% in the first quarter of 2019. Main points The UK economy is on course to grow by 0.4% in the first quarter of 2019 and, if current trends continue, by 0.3% in the second quarter (figure 1). According to new ONS statistics published this morning...

A Comparison of Earnings Related to Higher Level Vocational/Technical and Academic Education

We use the earliest cohort of English secondary school leavers with newly available Longitudinal Education Outcomes data (622,000 pupils in 2002/03) to compare earnings of people with higher vocational/technical qualifications to those of degree holders. The unusually rich data allow us to estimate...

Work-Life Imbalance in Extended Working Lives: Domestic Divisions of Labour and Partners’ Perceptions of Job Pressure of Non-Retiring Older Workers

Extending working lives prolongs existing patterns of time spent in work or with family into later life. Analysis of European Social Survey data shows a widening in inequitable domestic divisions of labour in households with post-retirement age workers. We explore partners’ perceptions of older...

NIESR Annual Report 2018

Publication date: 31 Mar 2019 | Publication type: Annual Report

Contents Reference and administrative information Trustees’ report Trustees' responsibilities Independent auditors report Consolidated statement of financial activities Consolidated and charity balance sheet Notes to the financial statements

How schools are integrating new migrant pupils and their families

Executive Summary Free movement and the extension of EU membership to Eastern and Central European countries have led to a substantial increase in migration to the UK. One result is an increase in the number of pupils who are either migrants themselves or born to recent migrants. In June 2016 the...

NIESR Wage Tracker - March 2019

Publication date: 19 Mar 2019 | Publication type: NIESR Wage Tracker | NIESR Author(s): Hantzsche, A

Pay growth appears to be stabilising at around 3½ per cent per annum Main points According to new ONS statistics published this morning, UK average weekly earnings (AWE) expanded by 3.4 per cent (including and excluding bonuses) in the three months to January compared to the year before...

March 2019 GDP Tracker

Publication date: 12 Mar 2019 | Publication type: NIESR GDP Tracker | NIESR Author(s): Kara, A, Young, G

The UK economic growth continues at slow pace and is expected to grow by 0.2% in the first quarter of 2019, the same pace as in the fourth quarter of last year. Main points The UK economy is on course to grow by 0.2% in the first quarter of 2019, the same pace as in the fourth quarter of...

Political Cacophony and the “Spring Statement”

Publication date: 6 Mar 2019 | Publication type: Policy Paper | Theme: Macroeconomics | NIESR Author(s): Chadha, J S, Hantzsche, A, Kara, A, Young, G | Report number: 11

Political deadlock and constitutional crisis does not necessarily spell economic doom. The UK economy is at full employment and in desperate need of investment to enhance productive capacity. But waiting for the outcome of this tortuous EU Exit process has produced an economic delay. Output is...

The Bank Capital-Competition-Risk Nexus - A Global Perspective

The Global Financial Crisis (GFC) highlighted the importance of a number of unresolved empirical issues in the field of financial stability. First, there is the sign of the relationship between bank competition and financial stability. Second, there is the relation of capital adequacy of banks to...

Bank Leverage Ratios, Risk and Competition - An Investigation Using Individual Bank Data

Following experience in the global financial crisis (GFC), when banks with low leverage ratios were often in severe difficulty, despite high-risk-adjusted capital measures, a leverage ratio was introduced in Basel III to complement the risk-adjusted capital ratio (RAR). Empirical testing of the...

The Impact of the Introduction of the National Living Wage on Employment, Hours and Wages

Publication date: 21 Feb 2019 | Publication type: NIESR Discussion Paper | Theme: Employment & Social policy | NIESR Author(s): Aitken, A, Dolton, P, Riley, R | NIESR discussion paper number: 501

In 2015 the UK government announced the introduction of a new ‘National Living Wage’ (NLW) that would apply to those aged 25 and above from April 2016. At a rate of £7.20, this represented a significant increase of 7.5% over the existing National Minimum Wage (NMW) rate. Previous research has...

NIESR Wage Tracker - February 2019

Publication date: 19 Feb 2019 | Publication type: NIESR Wage Tracker

Nominal pay growing at fastest rate for a decade, but expected to stabilise in short term Main points According to new ONS statistics published this morning, UK average weekly earnings (AWE) expanded by 3.4 per cent (including and excluding bonuses) in the three months to December compared...

February 2019 GDP Tracker

Publication date: 11 Feb 2019 | Publication type: NIESR GDP Tracker | NIESR Author(s): Kara, A, Young, G

Latest economic data confirms that the UK economy lost momentum in the final quarter of 2018, with quarterly growth of 0.2%. GDP growth is set remain weak in the first quarter of this year. Main points Latest economic data confirms that the UK economy lost momentum in the final quarter of...

The anatomy of UK labour productivity: lessons from new and existing data sources

The UK’s recent productivity performance has been strikingly weak. Output per hour worked, which increased by around 2.1 per cent per year in the decade leading up to the economic downturn, increased by just 0.2 per cent per year in the ten years following the global financial crisis. This paper...

Labour reallocation in recession and recovery: evidence for Europe

Publication date: 6 Feb 2019 | Publication type: National Institute Economic Review | Theme: Trade, Investment & Productivity | External Author(s): Bartelsman, E, Lopez-Garcia, P, Presidente, G | JEL Classification: E24, E32, J63, O4 | Journal: National Institute Economic Review Issue 247 | Publisher: Sage Publications, London

This paper builds upon Bartelsman, Lopez-Garcia, and Presidente (2018) and provides empirical evidence on the cyclical features of labour reallocation in a sample of European Union (EU) countries over the Great Recession and the slow recovery. The analysis makes use of cross-country micro-...

The decline of British manufacturing, 1973–2012: the role of total factor productivity

This paper uses plant-level estimates of total factor productivity covering 40 years to examine what role, if any, productivity has played in the decline of output share and employment in British manufacturing. The results show that TFP growth in British manufacturing was negative between 1973 and...

Hours worked across the world: facts and driving forces

Publication date: 6 Feb 2019 | Publication type: National Institute Economic Review | Theme: Trade, Investment & Productivity | External Author(s): Fuchs-Schündeln, N | JEL Classification: E24, H20, H31, J21, J22, O11 | Journal: National Institute Economic Review Issue 247 | Publisher: Sage Publications, London

I summarise new facts on hours worked differences across countries and their driving forces. The facts are derived from a comprehensive analysis of micro data sets. First, hours worked are substantially higher in poor than in rich countries. Second, lower hours worked in Europe than in the US can...

World overview

Publication date: 6 Feb 2019 | Publication type: National Institute Economic Review | Theme: Macroeconomics | NIESR Author(s): Naisbitt, B, Hantzsche, A, Lennard, J, Lenoel, C, Liadze, I, Lopresto, M, Piggott, R, Thamotheram, C | Journal: National Institute Economic Review Issue 247 | Publisher: Sage Publications, London

Recent data suggests that the global growth cycle has probably peaked. We forecast world GDP growth of around 3.5 per cent a year over the next two years. On that basis, the second decade of the 21st century will have seen sustained global GDP growth. Tariff increases and trade disputes seem likely...

Persistent productivity failure in the UK: is the EU really to blame?

On average, UK productivity performance in the decades leading up to the financial crisis was quite disappointing. Joining the EU was not to blame. Indeed, EU membership, which was an integral part of the Thatcher reform programme, had a significant positive impact. Over the long run, UK supply-...

Commentary: Breaking the Brexit impasse: achieving a fair, legitimate and democratic outcome

Unanimity on the question of UK exit from the EU is not within reach, but this does not mean that the House of Commons or the population at large can not find a way out of the current Brexit impasse that is fair and legitimate. We discuss different voting procedures which satisfy some important...

Prospects for the UK economy

The UK’s future relationship with the European Union (EU) remains undecided even though the Article 50 exit date is less than two months away. Brexit uncertainty has intensified since our last forecast and is now evident in various indicators. Our main forecast is conditional on a ‘soft’ Brexit...

Introduction: Productivity: Past, Present and Future

There continues to be considerable discussion in all of polite society about the causes of the productivity puzzle. Commissions and Inquiries have been set up and answers sought with the most recent, the Industrial Strategy Council, having its inaugural meeting in November 2018. The National...

The Impact of the Introduction of the National Living Wage on Employment, Hours and Wages

Publication date: 1 Feb 2019 | Publication type: Report | Theme: Employment & Social policy | NIESR Author(s): Aitken, A, Dolton, P, Riley, R

In 2015 the UK government announced the introduction of a new `National Living Wage' (NLW) that would apply to those aged 25 and above from April 2016. At a rate of £7.20, this represented a significant increase of 7.5% over the existing National Minimum Wage (NMW) rate. Previous research has...

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