tag:blogger.com,1999:blog-46327322828659187062024-02-02T22:36:25.958+00:00European Welfare StatesUnknownnoreply@blogger.comBlogger274125tag:blogger.com,1999:blog-4632732282865918706.post-87142286342025019272021-01-09T13:01:00.003+00:002021-01-09T13:02:05.653+00:00Pandemic Misery Index <p> <i>This post first appeared on <a href="https://blogs.lse.ac.uk/europpblog/2020/12/04/a-pandemic-misery-index-ranking-countries-economic-and-health-performance-during-covid-19/">LSE Europe blog</a></i></p><p><br /></p><p>What has been the economic and health performance of different
countries since the covid19 crisis began? I propose to rank countries on
the basis of how they have fared since the ongoing pandemic began by
combining data on two dimensions: a health dimension capturing mortality
data; and an economic dimension capturing increases in unemployment.</p>
<p>While the two indicators I select cannot provide an exhaustive
picture, they are nevertheless useful in giving us some sense of how
countries have fared across two of the dimensions that the covid19
crisis has affected most.</p>
<p><b>A measure of health costs</b></p>
<p>The health dimension is based on the so-called p-score. This data is available from the <a href="https://ourworldindata.org/excess-mortality-covid">ourworldindata website</a> (data extracted on 14<sup>th</sup> November 2020) and captures the weekly deviation of current mortality from the 5 years average for that week.</p>
<p>Excess mortality have two advantages over more direct measures of
covid19 deaths. First, they do not depend on the testing capacity of the
country under consideration, nor are they dependent on definitions of
what it means to have died from covid19.</p>
<p>Second, they include the total ‘health cost’ of the pandemic in terms
of mortality, i.e. the excess deaths that are the product of both the
pandemic <i>and</i> the policy responses to the pandemic.</p>
<p><b>A measure of economic costs</b></p>
<p>However, as is well recognised and widely discussed, the pandemic and
our policy responses entail significant economic costs. Many economic
indicators could be relevant to capture the economic costs. For my
purpose, I focus on monthly unemployment rate data, which is extracted
from the <a href="https://stats.oecd.org">OECD website</a>.</p>
<p>Partly, this choice is based on data availability constraints, since
the alternative to use instead GDP growth data would be hindered by more
limited, less recent and less frequent data at the time of writing.</p>
<p>But partly this choice finds inspiration in the so-called misery
index which was created following the stagflation in the 1970s. At the
time, governments were attempting – and more or less able – to jointly
minimise inflation and unemployment.</p>
<p>Adverse unemployment performance can be captured in two distinct
ways. The first is simply to look at the average monthly unemployment
rate. However, this does not account for the fact that when the pandemic
hit, countries started from different relative position. Since the
p-score is calculated as a percentage increase from a previous average, I
calculate an ‘unemployment score’ as the percentage increase in
unemployment from one month to the next.</p>
<p><b>Country coverage and time period</b></p>
<p>The following countries are included in my analysis: Austria,
Belgium, Canada, Chile, Czech Republic, Denmark, England & Wales,
Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Israel,
Italy, Latvia, Lithuania, Luxembourg, Netherlands, Norway, Poland,
Portugal, Slovakia, Slovenia, South Korea, Spain, Sweden, and the United
States.</p>
<p>Because ourworldindata.org does not report excess deaths by age
groups for the UK as a whole but instead for England&Wales, this is
the data I use throughout. For most countries. I have data from January
to September 2020 (inclusive). More recent data was not available for
all countries at the time of writing so what follows does not capture
what has happened since the ‘second wave’.</p>
<p><b>Excess mortality by age group</b></p>
<p>I start by showing the weekly evolution of excess mortality by four age groups (Figure 1): 15-64; 65-74; 75-84 and 85+.</p>
<p>The figure reveals the (by now) familiar worse performers, most
notably Belgium and England. Note further that English experience is not
atypical in the UK given the similar picture for Scotland and to a
lesser extent Northern Ireland. </p>
<p>Other countries that did not fare well include Chile, Spain,
Netherlands, Italy; although we can observe differences in the timing of
the peak. In all cases, excess mortality is strongly a function of age,
as has been well documented elsewhere.</p>
<p><i>Figure 1: Weekly excess mortality by age group</i></p>
<figure class="wp-block-image size-large"><a href="https://vlandas.files.wordpress.com/2020/12/figure-1-weekly-excess-mortality-by-age-group.png"><img alt="" class="wp-image-1538" data-attachment-id="1538" data-comments-opened="0" data-image-description="" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"}" data-image-title="figure-1-weekly-excess-mortality-by-age-group" data-large-file="https://vlandas.files.wordpress.com/2020/12/figure-1-weekly-excess-mortality-by-age-group.png?w=620" data-medium-file="https://vlandas.files.wordpress.com/2020/12/figure-1-weekly-excess-mortality-by-age-group.png?w=236" data-orig-file="https://vlandas.files.wordpress.com/2020/12/figure-1-weekly-excess-mortality-by-age-group.png" data-orig-size="3299,4200" data-permalink="https://timvlandas.com/figure-1-weekly-excess-mortality-by-age-group/" src="https://vlandas.files.wordpress.com/2020/12/figure-1-weekly-excess-mortality-by-age-group.png?w=804" /></a></figure>
<p><b>Economic and health costs over time</b></p>
<p>If we abstract from the cross-national variation, we can see February
was actually below the excess mortality average of the last five years
for that time of the year and in March the average for our countries
only experienced a mild increase. By contrast, in April most countries
experienced very significant rises in their excess mortality (Figure 2).</p>
<p><i>Figure 2: Monthly excess mortality and unemployment score</i></p>
<figure class="wp-block-image size-large"><a href="https://vlandas.files.wordpress.com/2020/12/figure-2-monthly-excess-mortality-and-unemployment-score.png"><img alt="" class="wp-image-1540" data-attachment-id="1540" data-comments-opened="0" data-image-description="" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"}" data-image-title="figure-2-monthly-excess-mortality-and-unemployment-score" data-large-file="https://vlandas.files.wordpress.com/2020/12/figure-2-monthly-excess-mortality-and-unemployment-score.png?w=620" data-medium-file="https://vlandas.files.wordpress.com/2020/12/figure-2-monthly-excess-mortality-and-unemployment-score.png?w=300" data-orig-file="https://vlandas.files.wordpress.com/2020/12/figure-2-monthly-excess-mortality-and-unemployment-score.png" data-orig-size="3299,2400" data-permalink="https://timvlandas.com/figure-2-monthly-excess-mortality-and-unemployment-score/" src="https://vlandas.files.wordpress.com/2020/12/figure-2-monthly-excess-mortality-and-unemployment-score.png?w=1024" /></a></figure>
<p>Bringing in the labour market deterioration into the picture, the
increase in unemployment associated with the lockdown measures many
countries introduced is also apparent. From May onwards and well into
September, both unemployment and mortality stopped to increase in any
substantial way across this sample of countries.</p>
<p>The correlation between the unemployment score and different measures
of excess mortality is statistically significant and positive but
modest (between 0.13 and 0.15), which suggests that countries’
performance in one dimension does not relate strongly for its
performance on the other dimension.</p>
<p>This contrasts with claims about the automatic inevitable adverse
effects of addressing pandemic for the economy, but also about the
presumed positive effects of addressing the pandemic for the economy.</p>
<p>Finally, the heterogeneity is apparent when it comes to excess
mortality by age group (figure 3): while some countries experienced the
highest increases in mortality for the very old (85+), in others the
figures were worst for the 65 to 84, and we can observe both below and
above average excess mortality rates for the 16-64 age group.</p>
<p><i>Figure 3: Excess mortality by country and age group over whole period (from Febuary 2020 onwards)</i></p>
<figure class="wp-block-image size-large"><a href="https://vlandas.files.wordpress.com/2020/12/figure-3-excess-mortality-by-country-and-age-group-over-whole-period-from-febuary-2020-onwards.png"><img alt="" class="wp-image-1541" data-attachment-id="1541" data-comments-opened="0" data-image-description="" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"}" data-image-title="figure-3-excess-mortality-by-country-and-age-group-over-whole-period-from-febuary-2020-onwards" data-large-file="https://vlandas.files.wordpress.com/2020/12/figure-3-excess-mortality-by-country-and-age-group-over-whole-period-from-febuary-2020-onwards.png?w=620" data-medium-file="https://vlandas.files.wordpress.com/2020/12/figure-3-excess-mortality-by-country-and-age-group-over-whole-period-from-febuary-2020-onwards.png?w=236" data-orig-file="https://vlandas.files.wordpress.com/2020/12/figure-3-excess-mortality-by-country-and-age-group-over-whole-period-from-febuary-2020-onwards.png" data-orig-size="3299,4200" data-permalink="https://timvlandas.com/figure-3-excess-mortality-by-country-and-age-group-over-whole-period-from-febuary-2020-onwards/" src="https://vlandas.files.wordpress.com/2020/12/figure-3-excess-mortality-by-country-and-age-group-over-whole-period-from-febuary-2020-onwards.png?w=804" /></a></figure>
<p><b>Pandemic Misery Index (PMI)</b></p>
<p>Policy makers are therefore faced with a joint minimisation problem
whereby they are trying to minimise both health and economic costs. It
is in this respect worth keeping in mind that both are – at least in the
medium to long term – intrinsically linked to each one another.</p>
<p>On the one hand, mass health issues end up undermining economic
productivity and growth. On the other hand, economic decline, insecurity
and deprivation generate health problems while also limiting our
ability to fund health interventions.</p>
<p>If we combine our economic and health performance indicators into a
single pandemic misery index (PMI), we can see that the peak in April
hides significant cross-national variation as captured by the standard
deviation, and that as the mean of the PMI falls, so does its standard
deviation (Figure 4).</p>
<p>In Figure 5, we plot the cross-national variation in the PMI. In the
top worst performers we find three liberal market economies (the UK and
the US) and two southern European countries (Spain, Italy and Portugal).
Although not in top five worst performers, two small open economies in
continental Europe – Belgium and Netherlands – also fared poorly.</p>
<p><i>Figure 4: Pandemic misery index over time</i></p>
<figure class="wp-block-image size-large"><a href="https://vlandas.files.wordpress.com/2020/12/figure-4-pandemic-misery-index-over-time.png"><img alt="" class="wp-image-1543" data-attachment-id="1543" data-comments-opened="0" data-image-description="" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"}" data-image-title="figure-4-pandemic-misery-index-over-time" data-large-file="https://vlandas.files.wordpress.com/2020/12/figure-4-pandemic-misery-index-over-time.png?w=620" data-medium-file="https://vlandas.files.wordpress.com/2020/12/figure-4-pandemic-misery-index-over-time.png?w=300" data-orig-file="https://vlandas.files.wordpress.com/2020/12/figure-4-pandemic-misery-index-over-time.png" data-orig-size="3299,2400" data-permalink="https://timvlandas.com/figure-4-pandemic-misery-index-over-time/" src="https://vlandas.files.wordpress.com/2020/12/figure-4-pandemic-misery-index-over-time.png?w=1024" /></a></figure>
<p><i>Note: the standard deviation statistic with weights returns the
bias-corrected standard deviation, which is based on the factor
sqrt(N_i/(N_i-1)), where N_i is the number of observations.</i></p>
<p><i>Figure 5: Pandemic misery index across countries</i></p>
<figure class="wp-block-image size-large"><a href="https://vlandas.files.wordpress.com/2020/12/figure-5-pandemic-misery-index-across-countries.png"><img alt="" class="wp-image-1545" data-attachment-id="1545" data-comments-opened="0" data-image-description="" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"}" data-image-title="figure-5-pandemic-misery-index-across-countries" data-large-file="https://vlandas.files.wordpress.com/2020/12/figure-5-pandemic-misery-index-across-countries.png?w=620" data-medium-file="https://vlandas.files.wordpress.com/2020/12/figure-5-pandemic-misery-index-across-countries.png?w=300" data-orig-file="https://vlandas.files.wordpress.com/2020/12/figure-5-pandemic-misery-index-across-countries.png" data-orig-size="3299,2400" data-permalink="https://timvlandas.com/figure-5-pandemic-misery-index-across-countries/" src="https://vlandas.files.wordpress.com/2020/12/figure-5-pandemic-misery-index-across-countries.png?w=1024" /></a></figure>
<p>To assess what’s driving poor performance we can disaggregate the PMI
along its two dimensions (Figure 6): the PMI in Spain, Italy and the UK
is driven by mortality rates with relatively mild increases in
unemployment, compared to the US and to Canada, where the increases in
unemployment was much more acute.</p>
<p>Among good performers, we find several central and eastern European
countries, including Latvia, Hungary, and Slovakia; and also Nordic
countries such as Norway, Denmark and Iceland.</p>
<p>Of course, different countries started with different labour market
positions, so plotting average levels (instead of changes) in
unemployment rates, reveals a slightly different picture (Figure 7).
Greece and Spain now look worsts in terms of unemployment rate over the
period, followed by Chile, Canada, US and Italy. Czech Republic, Poland,
Netherlands, England and Wales, among others kept a low level of
unemployment rate.</p>
<p>Finally, excess mortality among the very old (85+) reveals especially
dire numbers for parts of Southern Europe (Figure 8), but contrast
Spain and Italy, and to a lesser extent Portugal on one hand, and Greece
on the other hand. The US, England and Wales, and Canada score high but
are not in the top 6 worst performers, while Iceland, Norway, Hungary,
Denmark and Slovakia do especially well.</p>
<p><i>Figure 6: Disaggregating the pandemic misery index across countries</i></p>
<figure class="wp-block-image size-large"><a href="https://vlandas.files.wordpress.com/2020/12/figure-6-disaggregating-the-pandemic-misery-index-across-countries.png"><img alt="" class="wp-image-1546" data-attachment-id="1546" data-comments-opened="0" data-image-description="" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"}" data-image-title="figure-6-disaggregating-the-pandemic-misery-index-across-countries" data-large-file="https://vlandas.files.wordpress.com/2020/12/figure-6-disaggregating-the-pandemic-misery-index-across-countries.png?w=620" data-medium-file="https://vlandas.files.wordpress.com/2020/12/figure-6-disaggregating-the-pandemic-misery-index-across-countries.png?w=300" data-orig-file="https://vlandas.files.wordpress.com/2020/12/figure-6-disaggregating-the-pandemic-misery-index-across-countries.png" data-orig-size="3299,2400" data-permalink="https://timvlandas.com/figure-6-disaggregating-the-pandemic-misery-index-across-countries/" src="https://vlandas.files.wordpress.com/2020/12/figure-6-disaggregating-the-pandemic-misery-index-across-countries.png?w=1024" /></a></figure>
<p><i>Figure 7: Disaggregated PMI using levels in average monthly unemployment</i></p>
<figure class="wp-block-image size-large"><a href="https://vlandas.files.wordpress.com/2020/12/figure-7-disaggregated-pmi-using-levels-in-average-monthly-unemployment.png"><img alt="" class="wp-image-1547" data-attachment-id="1547" data-comments-opened="0" data-image-description="" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"}" data-image-title="figure-7-disaggregated-pmi-using-levels-in-average-monthly-unemployment" data-large-file="https://vlandas.files.wordpress.com/2020/12/figure-7-disaggregated-pmi-using-levels-in-average-monthly-unemployment.png?w=620" data-medium-file="https://vlandas.files.wordpress.com/2020/12/figure-7-disaggregated-pmi-using-levels-in-average-monthly-unemployment.png?w=300" data-orig-file="https://vlandas.files.wordpress.com/2020/12/figure-7-disaggregated-pmi-using-levels-in-average-monthly-unemployment.png" data-orig-size="3299,2400" data-permalink="https://timvlandas.com/figure-7-disaggregated-pmi-using-levels-in-average-monthly-unemployment/" src="https://vlandas.files.wordpress.com/2020/12/figure-7-disaggregated-pmi-using-levels-in-average-monthly-unemployment.png?w=1024" /></a></figure>
<p><i>Figure 8: Disaggregated PMI using mortality rates for over 85 rather than all ages</i></p>
<figure class="wp-block-image size-large"><a href="https://vlandas.files.wordpress.com/2020/12/figure-8-disaggregated-pmi-using-mortality-rates-for-over-85-rather-than-all-ages.png"><img alt="" class="wp-image-1549" data-attachment-id="1549" data-comments-opened="0" data-image-description="" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"}" data-image-title="figure-8-disaggregated-pmi-using-mortality-rates-for-over-85-rather-than-all-ages" data-large-file="https://vlandas.files.wordpress.com/2020/12/figure-8-disaggregated-pmi-using-mortality-rates-for-over-85-rather-than-all-ages.png?w=620" data-medium-file="https://vlandas.files.wordpress.com/2020/12/figure-8-disaggregated-pmi-using-mortality-rates-for-over-85-rather-than-all-ages.png?w=300" data-orig-file="https://vlandas.files.wordpress.com/2020/12/figure-8-disaggregated-pmi-using-mortality-rates-for-over-85-rather-than-all-ages.png" data-orig-size="3299,2400" data-permalink="https://timvlandas.com/figure-8-disaggregated-pmi-using-mortality-rates-for-over-85-rather-than-all-ages/" src="https://vlandas.files.wordpress.com/2020/12/figure-8-disaggregated-pmi-using-mortality-rates-for-over-85-rather-than-all-ages.png?w=1024" /></a></figure>
<h3 class="sd-title"><br /></h3><p><i></i></p>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-4632732282865918706.post-64239079064319435372017-04-30T13:40:00.000+01:002017-04-30T13:44:10.388+01:00Bargaining power in Brexit negotiations: UK and EU compared<div dir="ltr" style="text-align: left;" trbidi="on">
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Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-4632732282865918706.post-47345843646073557912016-10-21T13:43:00.000+01:002016-10-21T13:43:28.004+01:00Xenophobia Britannica? Anti-immigrant attitudes in the UK are among the strongest in Europe<div dir="ltr" style="text-align: left;" trbidi="on">
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<em><u>First posted at <a href="http://blogs.lse.ac.uk/brexit/2016/10/21/xenophobia-britannica-anti-immigrant-attitudes-in-the-uk-are-among-the-strongest-in-europe/">LSE Brexit blog</a></u></em></div>
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<em><u> </u> </em></div>
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The vote for Brexit took place. I had hoped that this would have been the end of the obsession
with immigration. Brexit would allow the UK to ‘take back control’ of
its immigration policy, thereby nullifying the need for politicians to
talk about it on an almost daily basis. However, in fact the reverse is happening. Having decided to leave the EU, the vote
is increasingly interpreted as a call to end immigration almost
entirely and, furthermore, it is discussed even more often and more
negatively than before the referendum.</div>
<div style="text-align: left;">
<br /></div>
<div style="text-align: left;">
Instead of just imposing immigration controls if the government
wishes to do so, we now hear a flurry of xenophobic policy proposals
which are ironically unlikely to have any noticeable effect on
immigration flows. There were suggestions that companies would be ‘named
and shamed’ for hiring foreigners. Other ideas included preventing the
government from seeking advice from non-UK citizens about Brexit related
matters, presumably for ‘security’ reasons. Immigrants should not, we
are told, “take jobs British people could do”. </div>
<div style="text-align: left;">
<br /></div>
<div style="text-align: left;">
These proposals are
economically illiterate as they implicitly accept the lump of labour
fallacy that there is a fixed quantity of jobs in the economy. They are
also clearly nationalist insofar as they posit work should be shared
first and foremost among ‘deserving’ natives, that we must identify and
count foreigners, and that both companies and the government should not
rely on foreigners to advise or work for them, at least in some
instances. The question remains, however, whether these policy proposals
and this obsession with immigration represent the preferences of the
wider population? Or put differently, is it the case that the UK is
noticeably more sceptical of immigration than other European countries?</div>
<div style="text-align: left;">
<br /></div>
<div style="text-align: left;">
To investigate this question, I turned to the survey data available
from the European Social Survey; without a doubt one of the best
cross-national academic surveys available. The 7<sup>th</sup> wave of
the ESS was carried out in 2014 and covers 20 countries of western and
eastern Europe (one is not an EU member: Switzerland). I analysed the
responses to the available questions on immigration. For each question, I
then ranked countries according to their responses as a rough indicator
of where the UK sits in Europe. Obviously, a more complex analysis
could be – and should be – carried out, but the following discussion
gives us a first glance at the magnitude of the anti-immigration
sentiment in the UK.</div>
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<h2 style="text-align: left;">
<strong>Ethno-nationalism, racism and multiculturalism</strong></h2>
<div style="text-align: left;">
<br /></div>
<div style="text-align: left;">
Concerns about immigration do not seem to be primarily driven by
ethnonationalism, i.e. a conception of the nation being premised on a
certain ethnicity and/or religion. Or put differently: these questions
are not where the UK ranks worst.</div>
<div style="text-align: left;">
<br /></div>
<h4 style="text-align: left;">
Do people think “it is important for immigrants to be white”?
</h4>
<div style="text-align: left;">
In the UK 1.4 percent of respondents thought it was ‘extremely
important’ for someone to be white in deciding whether someone born,
brought up and living outside the country should be able to come and
live here. It is difficult to assess in and of itself whether this is
high, but we can say that this is the 10<sup>th</sup> highest response (Hungary scores highest with 13.1 percent of respondents believing this is extremely important).</div>
<div style="text-align: left;">
<br /></div>
<div style="text-align: left;">
This only captures those respondents that selected 10 on a 10 points
scale ranging from 0 ‘extremely unimportant’ to 10 ‘extremely
important’. We can broaden the net by adding all those that selected 6
to 10: 7.7 percent in the UK did so, which again ranks them 10<sup>th</sup>, compared to more than 40 percent in Hungary and Lithuania (the two countries with the highest two percentages).</div>
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<h4 style="text-align: left;">
Do people “want to allow Muslims to come and live here”?</h4>
<div style="text-align: left;">
Overall, 17.3 percent of UK respondents answered ‘allow none’ to the
question: how many Muslims should be allowed to come and live in one’s
country? This is a very high percentage, but it still ranks the UK 13<sup>th</sup> with
the top 2 countries (the Czech Republic and Hungary) having more than
55 percent of respondents choosing none. As much as 13 percent in the UK
chose to ‘allow many to come and live here’ and 42 percent chose ‘allow
some’ while 27 percent chose ‘allow a few’.</div>
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<br /></div>
<h4 style="text-align: left;">
The importance of customs and traditions</h4>
<div style="text-align: left;">
Overall, 12.1 percent of respondents in the UK ‘strongly agree’ it is
better for a country if almost everyone shares the customs and
traditions, which ranks it 10<sup>th</sup> (the Czech Republic ranked
first with 29.5 percent), while 30.7 percent ‘agree’, 25.5 percent
‘neither agree nor disagree’, 25.9 percent ‘disagree’, and 5.8 percent
‘strongly disagree’.</div>
<div style="text-align: left;">
<br /></div>
<h4 style="text-align: left;">
Close friends from a different race or ethnic group</h4>
<div style="text-align: left;">
The following question is clearly not about immigration but may tell
us something about interaction between people: “Do you have any close
friends who are of a different race or ethnic group from most [country]
people? IF YES, is that several or a few?” In the UK, 21.7 percent
responded ‘Yes, several’ which is the 3<sup>rd</sup> highest share after Sweden and Switzerland, and 36.9 percent said ‘Yes, a few’, but 41.5 percent said ‘none at all’.</div>
<div style="text-align: left;">
<br /></div>
<h4 style="text-align: left;">
Good contact with different race or ethnic group</h4>
<div style="text-align: left;">
The UK has ranked 13<sup>th</sup> worst in terms of the percentage of
respondents who responded that ‘contact with a different race or ethnic
group’ is ‘extremely bad’ (Hungary and the Czech Republic were the two
highest). It does, however, rank high in terms of the percentage that
responded that it was ‘bad’ (as much as 6.3 percent).</div>
<div style="text-align: left;">
<br /></div>
<h2 style="text-align: left;">
<strong>Anti-immigration and negative perceptions of immigrants</strong></h2>
<div style="text-align: left;">
<br /></div>
<h4 style="text-align: left;">
Anti-immigration and negative perceptions of immigrants</h4>
<div style="text-align: left;">
As much as 17 percent of respondents in the UK want to ‘allow no’ immigration from poorer European countries (3<sup>rd</sup> after
Hungary and Lithuania) and 31.9 percent say ‘allow a few’. Only 10.1
percent think we should allow many to come and live in the UK.</div>
<div style="text-align: left;">
<br /></div>
<h4 style="text-align: left;">
Unpacking immigration preferences towards different types of immigrants</h4>
<div style="text-align: left;">
We can unpack this further by analysing differences between high and
low skill immigration. Responses are quite different when comparing
whether to allow professionals from poorer countries and whether to
allow unskilled labourers. Only 6 percent of respondents in the UK want
to ‘allow no’ professionals from poorer European countries (11<sup>th</sup> highest) compared to 35.1 percent for labourers (3<sup>rd</sup> highest),
and 19.9 percent want to ‘allow a few’ professionals compared to 28.7
percent for labourers.</div>
<div style="text-align: left;">
<br /></div>
<div style="text-align: left;">
Policy proposals that want to limit immigration
into the NHS or highly skilled occupations may therefore not have as much popular
support. Questions about the importance of good educational
qualifications for immigration provide consistent answers: 75.5 percent
believe the educational qualifications of immigrants is ‘important’
(which ranks it 5<sup>th</sup> highest in the sample, after Austria,
Germany, Estonia and Lithuania – the answers are ranked from 0
‘extremely unimportant’ to 10 ‘extremely important’ and I added the
numbers who chose 6 to 10).</div>
<div style="text-align: left;">
<br /></div>
<h4 style="text-align: left;">
The importance of language and skills</h4>
<div style="text-align: left;">
Respondents in the UK attached a particularly high importance to
language: 84 percent chose 6 to 10 in response to the question about the
importance of speaking the country’s official language, where 0 is
‘extremely unimportant’ and 10 is ‘extremely important’. This placed the
UK 2<sup>nd</sup> highest after Austria. As much as 38 percent
responded that language was ‘extremely important’ by choosing
10.Equally, respondents emphasised the importance of skills: 83.3
percent chose 6 to 10 in response to the question of whether work skills
needed in the country is an important aspect of immigration, where 0 is
‘extremely unimportant’ and 10 is ‘extremely important’. This ranked
the UK 2<sup>nd</sup> highest among countries surveyed and 27.2 percent responded that it was ‘extremely important’ by choosing 10.</div>
<div style="text-align: left;">
<br /></div>
<div style="text-align: left;">
</div>
<h4 style="text-align: left;">
Concerns about immigration related to the ‘way of life’, jobs, public services and crime
</h4>
<div style="text-align: left;">
Responses indicate that British citizens think it is important that
immigrants should be committed to society’s ‘way of life’: 85.7 percent
chose a number between 6 and 10, where 0 is ‘extremely unimportant’ and
10 is ‘extremely important’. This ranked the UK 6th highest among the
countries considered in the ESS and 31.2 percent thought it was
‘extremely important’. </div>
<div style="text-align: left;">
<br /></div>
<div style="text-align: left;">
But respondents were also concerned about whether
immigrants take jobs away from the country. Respondents could choose
any number between 0 ‘take jobs away’ and 10 ‘create new jobs’: 37.1
percent chose a number between 0 and 4 (those which on balance think
immigrants take jobs away more than they create jobs), while 8.2 percent
chose 0 (definitely think that they take jobs away). This placed the UK
in the 6th highest position.</div>
<div style="text-align: left;">
<br /></div>
<div style="text-align: left;">
Moreover, many respondents were convinced that immigrants take out
more than they put in in terms of taxes and public services – contrary
to what the evidence suggests. Indeed, 42.8 percent chose a number
between 0 and 4, where 0 is ‘generally put in less’ and 10 is ‘generally
take out more’. This ranked the UK 6th worst in the countries under
consideration in the ESS. </div>
<div style="text-align: left;">
<br /></div>
<div style="text-align: left;">
The ESS also asked respondents: Compared to
people like yourself who were born in [name of a country], how do you
think the government treats those who have recently come to live here
from other countries? 19.7 percent responded ‘much better’ which ranks
the UK 1st highest (followed by Ireland and France) and 26.4% responded
‘a little better’.</div>
<div style="text-align: left;">
<br /></div>
<div style="text-align: left;">
Finally, the UK was 7th in terms of the percentage of people that
believe immigrants make the country’s crime problems worse with 53.1%
choosing a number between 0 and 4, where 0 is ‘crime problems made
worse’ and 10 ‘crime problems made better’, and 8.7% chose 10, the most
convinced expression of immigrants making crime worse.</div>
<div style="text-align: left;">
<br /></div>
<h2 style="text-align: left;">
<strong>Misperceptions</strong></h2>
<div style="text-align: left;">
<br /></div>
<div style="text-align: left;">
Overall, there is a strong anti-immigration preference among a
significant part of the population, which is rooted in associations
between immigration and a number of problems including higher crime, way
of life, and insufficient jobs and public services. These associations
clearly helped the Brexit camp and play into the hands of the far right,
which has long promoted these associations. Misperceptions seem to
abound about the effects of immigration. </div>
<div style="text-align: left;">
<br /></div>
<div style="text-align: left;">
But even the assessment of the
number of foreigners in the country is widely off the mark for most
people. Indeed, when asked, “out of 100 people how many were born
outside the country?” 3 percent said 60, about 9 percent said 50, about 9
percent said 40, more than 10 percent said 30, and more than 10 percent
said 20, just to give some examples. In reality, a recent House of
Commons library briefing paper placed the percentage of people living in
the UK who were born outside the UK at 13 percent (<a class="broken_link" href="http://blogs.lse.ac.uk/brexit/wp-admin/researchbriefings.files.parliament.uk/documents/SN06077/SN06077.pdf">Hawkins, Oliver (2016) House of Commons, library, briefing paper, migration statistics, Number SN06077, 5 September 2016</a>: page 18). More than 40% of respondents grossly over-estimate the number of immigrants in the country.</div>
<div style="text-align: left;">
</div>
<div style="text-align: left;">
</div>
<div style="text-align: left;">
The survey data reveals that the UK has among the highest
anti-immigrant survey responses, especially within Western Europe. These
results suggest that recent policy proposals tap into widespread
anti-immigration sentiment, which may, of course, have been created by
the media and political discourse that has been framing the issue so
negatively for a long time now.</div>
<div style="text-align: left;">
<br /></div>
<div style="text-align: left;">
At the same time, the problem seems to be not just about whether
immigration should or should not be restricted, and if so how, but more
importantly about how to promote a more facts-based discussion of
immigration. The fact of the matter is that a large part of the
electorate has now wholeheartedly embraced anti-immigration attitudes.</div>
<div style="text-align: left;">
<br /></div>
<div style="text-align: left;">
<em>Note 1: Design weights are applied throughout.</em></div>
<div style="text-align: left;">
<br /></div>
<div style="text-align: left;">
<em>Note 2: I use the exact language and wording of the ESS for simplicity.</em></div>
</div>
Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-4632732282865918706.post-23503052549478369082016-10-09T12:27:00.000+01:002016-10-09T12:27:08.762+01:00Deprivation and anti-immigration in the UK<div dir="ltr" style="text-align: left;" trbidi="on">
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEicIX9Rb64GwhMgFLUbSPwtOrjXMw9KiUrNXgX7s1Nfeg_e0Gyn1daJfVdcwrGhjGNEJKbjRomCFO9OYcDjJ1UB3qcHx_tnRHpZj9xC93eoy01ZpKKCRvYrUhN3wJHwAjQRYM-iAb1nbHQ9/s1600/deprivation+and+anti-immigration.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="147" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEicIX9Rb64GwhMgFLUbSPwtOrjXMw9KiUrNXgX7s1Nfeg_e0Gyn1daJfVdcwrGhjGNEJKbjRomCFO9OYcDjJ1UB3qcHx_tnRHpZj9xC93eoy01ZpKKCRvYrUhN3wJHwAjQRYM-iAb1nbHQ9/s400/deprivation+and+anti-immigration.jpg" width="400" /></a></div>
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Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-4632732282865918706.post-17995436523651936082016-10-05T16:18:00.000+01:002016-10-05T16:20:35.156+01:00The crisis of legitimacy of the UK welfare state<div dir="ltr" style="text-align: left;" trbidi="on">
The ongoing austerity agenda in Britain seems puzzling until we look at social attitudes and how they have evolved over time. This is precisely what the British Social Attitudes survey allows us to do by monitoring people's views of a variety of topics. It asks a random sample of 3000 people a series of questions since the early 1980s.<br />
<br />
The analysis of their questions related to the welfare state reveals a striking crisis of legitimacy. The share of those that think unemployment benefits are too low fell from above 50% in early 1990s to less than 30% after 2010. This occured alongside drastic reductions in the unemployment benefit replacement rate (which measures the % of income that is replaced by unemployment benefits).<br />
<br />
At the same time, the % of respondents that agree that the government should spend more on welfare has decreased from above 60% in 1990 to 30% in 2014. And this probably overestimates the % of people who vote that actually believe the government should spend more on welfare state.<br />
<br />
This is surprising on two counts. First, assuming some degree of redistributing effects of welfare state policies, and given that the median income is under the average income, we would expect that it is beneficial for more than one third of people to favour redistribution, and by extension welfare spending.<br />
<br />
Second, the crisis has - at least initially - increased unemployment and insecurity among workers, two issues that welfare state policies are supposed to address. One solution to this puzzle lies with the fact that people believe cutting the welfare state would incentivise unemployed people to find jobs. Indeed, in the early 1990s, less than 30% of respondents agreed that a less generous welfare state would encourage people to 'stand on their own two feet'. By 2010, this was above 50%.<br />
<br />
At a time where fiscal pressures are seen - rightly or wrongly - to be significant, this low public support limits the electoral attractivness of policy proposals to expand the welfare state and strengthens the political viability of austerity.<br />
<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgNBa32e11Q6_tszv95S5y1UQcilyRXzFwr-psQjUz8rVcf5Tzmh4ehGr8HwQ2c_yOq8k2ZBw3AVNNZDwvA8Z2FXntFGWD6x9dcMc-waw2gDDAB5PZwPu0xB0uF8rFP4B8lVtDXMRP8GV_E/s1600/Graph.tif" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgNBa32e11Q6_tszv95S5y1UQcilyRXzFwr-psQjUz8rVcf5Tzmh4ehGr8HwQ2c_yOq8k2ZBw3AVNNZDwvA8Z2FXntFGWD6x9dcMc-waw2gDDAB5PZwPu0xB0uF8rFP4B8lVtDXMRP8GV_E/s640/Graph.tif" width="450" /></a></div>
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Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-4632732282865918706.post-78664190976730507902016-09-04T12:32:00.000+01:002016-09-04T18:12:09.687+01:00Regulations in 'rigid' labour markets are less likely to be enforced<div dir="ltr" style="text-align: left;" trbidi="on">
<div dir="ltr" style="text-align: left;" trbidi="on">
<h2 style="text-align: left;">
<span style="font-size: small;"><span style="font-family: inherit;"><b>How difficult is it to fire a worker in different countries?</b></span></span></h2>
<span style="font-size: small;"><span style="font-family: inherit;">To
answer this question, most social scientists have created many
indicators that capture the conditions, costs and uncertainty associated
with firing an employee.</span></span><br />
<span style="font-size: small;"><br /></span>
<span style="font-size: small;"><span style="font-family: inherit;">For instance the <a data-mce-href="http://www.oecd.org/els/emp/oecdindicatorsofemploymentprotection.htm" href="http://www.oecd.org/els/emp/oecdindicatorsofemploymentprotection.htm">OECD Employment Protection Legislation (EPL) index </a>measures <i>"the
procedures and costs involved in dismissing individuals or groups of
workers and the procedures involved in hiring workers on fixed-term or
temporary work agency contracts"</i></span></span><br />
<span style="font-size: small;"><br /></span>
<br />
<h2 style="text-align: left;">
<span style="font-size: small;"><span style="font-family: inherit;"><b>The determinants and consequences of EPL</b></span></span></h2>
<span style="font-size: small;"><span style="font-family: inherit;">This
index is then used in statistical analysis to assess the impact of EPL
on economic outcomes, such as unemployment, or to identify the
determinants of EPL reforms, for instance partisanship.</span></span><br />
<span style="font-size: small;"><br /></span>
<span style="font-size: small;"><span style="font-family: inherit;">The
conventional wisdom is that EPL has adverse economic consequences
(studies by IMF and OECD, Layard, Botero and others), but the stability
of the findings to different specification has been contested (for
instance see work by Baker, Avdagic and others).</span></span><br />
<span style="font-size: small;"><br /></span>
<br />
<h2 style="text-align: left;">
<span style="font-size: small;"><span style="font-family: inherit;"><b>Employment Protection Legislation: rules versus enforcement</b></span></span></h2>
<span style="font-size: small;"><span style="font-family: inherit;">For
a long time a more obvious problem has been that legal restrictions on
firing can only be expected to have any effects on labour market
performance if the legislation is actually enforced on the ground.</span></span><br />
<span style="font-size: small;"><br /></span>
<span style="font-size: small;"><span style="font-family: inherit;">The
issue here is not so much that employment protection legislation might
not enforced (which is likely) but more importantly that it might be
enforced to varying degrees in different countries in ways that we
cannot observed.</span></span><br />
<span style="font-size: small;"><br /></span>
<br />
<h2 style="text-align: left;">
<span style="font-size: small;"><span style="font-family: inherit;"><b>New database on enforcement</b></span></span></h2>
<span style="font-size: small;"><span style="font-family: inherit;">This shortcoming is now being partly addressed in recent research by Kanbur and Ronconi published in the <a data-mce-href="http://cepr.org/active/publications/discussion_papers/dp.php?dpno=11098#" href="http://cepr.org/active/publications/discussion_papers/dp.php?dpno=11098#">Centre for Economic Policy Research</a>.</span></span><br />
<span style="font-size: small;"><br /></span>
<span style="font-size: small;"><span style="font-family: inherit;">In a shorter version of the paper they have published in <a data-mce-href="http://www.voxeu.org/article/labour-laws-strict-rules-are-correlated-weak-enforcement" href="http://www.voxeu.org/article/labour-laws-strict-rules-are-correlated-weak-enforcement">VoX</a> they explain how they created a new indicator of enforcement that combines both inspections and penalties.</span></span><br />
<span style="font-size: small;"><br /></span>
<br />
<h2 style="text-align: left;">
<span style="font-size: small;"><span style="font-family: inherit;"><b>Their results are interesting in at least two respects</b></span></span><span style="font-size: small;"><span style="font-family: inherit;"> </span></span></h2>
<div style="text-align: left;">
<span style="font-size: small;"><span style="font-family: inherit;">First,
once they control for their measure of enforcement in a statistical
analysis of the determinant of labour market performance, EPL no longer
has a statistically significant adverse effect for most measures of
performance. In other words, labour market regulations do not in fact
seem to have a consistent effect on labour market outcomes. </span></span><span style="font-size: small;"><span style="font-family: inherit;"> </span></span></div>
<div style="text-align: left;">
<span style="font-size: small;"><br /></span></div>
<div style="text-align: left;">
<span style="font-size: small;"><span style="font-family: inherit;">Second,
they show that countries with more stringent EPL have lower enforcement
levels, which then makes it difficult to know which country's labour
market really is more 'rigid'. This is shown in the figure below that
plots a de jure employment index on the horizontal axis and their
enforcement index on the vertical axis.</span></span></div>
<span style="font-size: small;"><br /></span>
<br />
<h2 style="text-align: left;">
<span style="font-size: small;"><span style="font-family: inherit;"><b>Interpreting the figure: some country examples</b></span></span></h2>
<span style="font-size: small;"><span style="font-family: inherit;">The
ranking should be interpreted as follows: countries which are lower on
the scale have higher ranking and hence more protective institutions or
more enforcement. </span></span><br />
<span style="font-size: small;"><br /></span>
<span style="font-size: small;"><span style="font-family: inherit;">Thus for instance, while Canada and Denmark have among
the lowest ranking in de jure employment protection (they are not in
the top 150 countries), they rank really high in terms of enforcement
(in top 25). By contrast, France and Spain score high on EPL but do not
rank well in terms of enforcement: their stringent regulations are not
well-enforced compared to many other countries.</span></span><br />
<span style="font-size: small;"><br /></span>
<br />
<h3 style="text-align: left;">
<span style="font-size: small;"><span style="font-family: inherit;"><i><b>Figure: Enforcement and labour law</b></i></span></span></h3>
<span style="font-size: small;"><span style="font-family: inherit;"><img alt="Untitled" class="alignnone size-full wp-image-1106" data-mce-src="https://vlandas.files.wordpress.com/2016/04/untitled.png?w=2472" data-wpmedia-src="https://vlandas.files.wordpress.com/2016/04/untitled.png" height="291" src="https://vlandas.files.wordpress.com/2016/04/untitled.png?w=2472" width="400" /></span></span></div>
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Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-4632732282865918706.post-90545999362488128802016-09-04T12:23:00.002+01:002016-09-04T12:23:56.860+01:00Brexit and non-UK born population<div dir="ltr" style="text-align: left;" trbidi="on">
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Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-4632732282865918706.post-3132288144294470872016-07-19T17:38:00.001+01:002016-07-19T17:38:35.352+01:00Blog has passed 150,000 pageviews since its creation!<div dir="ltr" style="text-align: left;" trbidi="on">
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Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-4632732282865918706.post-68300353396265516892016-07-19T17:35:00.003+01:002016-09-04T18:10:16.450+01:00Being unemployed in the US after the Obama presidency<div dir="ltr" style="text-align: left;" trbidi="on">
<i>First posted on <a href="https://timvlandas.com/2016/07/19/being-unemployed-in-the-us-after-the-obama-presidency/">Tim Vlandas' website</a></i><br />
<br />
<div class="entry-content">
Obama was elected in 2008 during the height of the crisis with
much expectations that he would improve the conditions of the least
well-off in American society. As his term nears its end, I use the
latest OECD data to assess how unemployed individuals fare now compared
to both other developed countries and to when he started his term.<br />
<br />
In a nutshell, I show that in all plausible scenarios, individuals in
the initial phase of unemployment are worse off in the US than in a
median OECD or EU country and their relative situation has gotten worse
since 2007, especially if they are in the middle class.<br />
<br />
<h2>
<b>OECD data</b></h2>
The OECD has data on the net replacement rates for six family types
in the initial phase of unemployment. The latest data available is 2014
so it is in principle plausible – though unlikely – that the situation
has improved massively in the last two years and that this is not
captured by my data. Note further the emphasis on the initial phase of
unemployment: after a certain time in unemployment – which varies by
country – unemployed lose eligibility to certain benefits (or experience
falls in the replacement rate).<br />
<br />
The OECD tax-benefit Model allows you to specify the marital
situation of the family (single, one earner married couple, and two
earners married couple) and whether they have children (in this case no
children versus two children) for different levels of the average wage.<br />
<br />
For simplicity I show the replacement rate for a case when the family
does not qualify for cash housing assistance or social assistance in
either the in-work or out-of-work situation. I also do not consider the
case of earners with 150% of average wage.<br />
<br />
<h2>
<b>The situation in 2014</b></h2>
Figure 1 shows the difference between the US and the EU/OECD average
replacement rates in 2014. As an example consider the case of a single
person with no children earning 67% of the average wage prior to
becoming unemployed. In the US, the person would get 61% out of work
income as a percentage of previous earnings equal to 67% of the average
wage. The equivalent OECD median is 65% while the EU median is 68% so
the gap between the US and the OECD median is 4 percentage points while
it is 7 percentage points between the US and the EU.<br />
<br />
Comparing different family and income situations reveals that the US
is least generous compared to the OECD and EU median for ‘middle class’
(100% of average wages) families that are composed of lone parents with 2
children. The next biggest gap between the US and the OECD/EU median is
for low income families with either one earner couple or a lone parent.<br />
<br />
By contrast, low income families (67% of average wage) with two
earners with or without two children would fare almost exactly the same
in terms of replacement rate in the median OECD and EU country as in the
US.<br />
<br />
<br />
<b>Figure 1: The difference between the US and the EU/OECD average replacement rates in 2014</b><br />
<img alt="EU US gap in 2014" class="alignnone size-full wp-image-1171" height="286" src="https://vlandas.files.wordpress.com/2016/07/eu-us-gap-in-20141.jpg?w=929" width="400" /><br />
<h2>
</h2>
<h2>
Cross-national variation</h2>
In Figure 2, I show the 2014 cross-national variation in the
replacement rate for a single earner with no children that does not
qualify for cash housing assistance or social assistance and had
previous earnings of 67% of average wage. This reveals that the US is
not the worse country among developed countries (the worse is not
surprisingly the UK – though note that the situation does not quite look
as dire for the UK if the family qualifies for cash housing
assistance). But it is located in the bottom half of the ranking.<br />
<br />
<b>Figure 2: 2014 replacement rate for a single earner with no
children that does not qualify for cash housing assistance or social
assistance and had previous earnings of 67% AW</b><br />
<img alt="Figure 3" class="alignnone size-full wp-image-1215" height="286" src="https://vlandas.files.wordpress.com/2016/07/figure-3.jpg?w=929" width="400" /><br />
<h2>
</h2>
<h2>
Changes since 2007</h2>
In 2014, the average across all family types and both income
situations for the US is 59% compared to 70% for the OECD median and 71%
for the EU median. This represents a fall from 2007 where the average
was 62% for the US, 60% for the OECD and 71% for the EU median.<br />
<br />
Figure 3 shows how the gap between the US and the EU has evolved
between 2007 and 2014 for different family-income scenarios. Positive
values indicate that there has been an increase in the gap between what a
person would get in a median EU country and what they would get in the
US. Thus for instance, we see that the biggest increases in the gap has
been for one earner married couple with no children that earned 100% of
the average wage prior to becoming unemployed and a single person with
no children also earning 100% of the average wage prior to becoming
unemployed. The next biggest increase has occurred for a lone parent
with two children.<br />
<br />
Thus, over the Obama presidency, the welfare of vulnerable middle
class families in the US relative to their counterpart in the Europe has
gotten worse. This is a striking result given the significant
retrenchment of European welfare states that has taken place in Europe
between 2008 and 2014 (the period under consideration here).<br />
<br />
<b>Figure 3: The difference between the EU-US gap in 2007 and in 2014</b><br />
<h2>
<img alt="Change between 2014 and 2007.jpg" class="alignnone size-full wp-image-1203" height="286" src="https://vlandas.files.wordpress.com/2016/07/change-between-2014-and-2007.jpg?w=929" width="400" /> </h2>
<h2>
Disappointing but not surprising</h2>
While disappointing, the falling welfare of the unemployed in the US
is not entirely surprising from a theoretical perspective. The welfare
state literature makes clear that liberal welfare regimes’ structure
(e.g. targeted means tested benefits) limit the popular support for
generous welfare state benefits for the unemployed that are seen as
particularly undeserving.<br />
<br />
As Rehm brillantly discusses in his latest book “<a href="http://www.cambridge.org/gb/academic/subjects/politics-international-relations/comparative-politics/risk-inequality-and-welfare-states-social-policy-preferences-development-and-dynamics?format=PB">Risk inequality and Welfare state</a>“,
countries with concentrated risks of unemployment among low income
workers are less likely to exhibit pro-welfare state cross-class
coalitions. At the same time, the US type of capitalism limits the power
of the unions while making it unlikely that employers will consent – in
the words of <a href="http://dx.doi.org/10.1353/wp.2006.0026">Korpi </a>– to more generous social policies (see Varieties of Capitalism <a href="http://www.lse.ac.uk/government/whosWho/Academic%20profiles/dwsoskice@lseacuk/Hall-Soskice-Intro-VoC-2001.pdf">literature</a>).<br />
<br />
As a result, where there is no clear efficiency imperative (e.g.
Obamacare in the context of objective inefficiencies in the health care
sector in the US), it is therefore difficult even for a left leaning
government to undertake an expansion of welfare state policies.</div>
</div>
Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-4632732282865918706.post-2752706988563402282015-09-23T16:59:00.000+01:002016-09-04T18:11:25.144+01:00Austerity brings extremism: why the welfare state is the key to understanding the rise of Europe’s far right<div dir="ltr" style="text-align: left;" trbidi="on">
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<span style="font-size: small;"><i>This blog was orginally published in the <a href="http://www.huffingtonpost.co.uk/daphne-halikiopoulou/austerity-brings-extremis_b_8182866.html" rel="nofollow" target="_blank">Huffington post</a>.</i></span></div>
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<div class="MsoNormal" style="text-align: left;">
<span style="font-size: small;">The recent Greek election has resulted, once again, in a
coalition government between the far left Coalition of the Radical Left
(SYRIZA) and the far right Independent Greeks (ANEL). What has attracted less
media attention so far, however, is the striking result for the neo-Nazi Golden
Dawn which increased its share of the vote from 6.28 to 6.99%, gaining 18 seats
in a parliament of 300, and remaining third strongest party. This indicates
that the Golden Dawn remains a considerable presence in Greek politics since
its first entry in the Greek parliament in 2012. And, it is a striking result<span style="color: red;"> </span>for a party that is not only extreme, violent, and
espouses <a href="http://www.huffingtonpost.co.uk/daphne-halikiopoulou/golden-dawn_b_7643868.html">Nazi
ideology</a>, but is also currently on trial for maintaining a criminal
organization. Only a couple of days prior to the election, the party’s leader
publicly accepted “political responsibility” for the murder of left-wing
activist Pavlos Fyssas. </span></div>
<div class="MsoNormal" style="text-align: left;">
<span style="font-size: small;"><br /></span></div>
<div class="MsoNormal" style="text-align: left;">
<span style="font-size: small;">But the rise and resilience of far right parties is not
confined to Greece. While neo-Nazism is indeed a more isolated phenomenon, the
far right more broadly- i.e. parties that centre their attention on nationalism
and xenophobia - is becoming increasingly popular across Europe. In the 2014
European Parliament elections, four far right parties received more than 20% of
the votes cast: Austria’s FPÖ, Denmark’s DF, Britain’s UKIP and the French FN.
Several others received over 10% of the votes cast including the Dutch PVV, the
True Finns, and Hungary’s Jobbik. A number of these parties are also faring
quite well in their domestic electoral arenas, for instance the French FN in
2012, the Austrian FPÖ in 2013, and the DF in Denmark as well as UKIP in the UK
in 2015.</span></div>
<div class="MsoNormal" style="text-align: left;">
<span style="font-size: small;"><br /></span></div>
<div class="MsoNormal" style="text-align: left;">
<span style="font-size: small;">The most popular explanation for the rise of the far right in
Europe is the on-going economic crisis. This answer has both historical and
theoretical appeal. Historically, the rise of Nazism in interwar Europe
followed the 1929 major financial crash. Theoretically, economic crises are associated
with the rise of the far right because the dispossessed are more likely to punish
the mainstream and opt for extreme or anti-establishment parties. </span></div>
<div class="MsoNormal" style="text-align: left;">
<span style="font-size: small;"><br /></span></div>
<div class="MsoNormal" style="text-align: left;">
<span style="font-size: small;">But the crisis is, at best, only part of the story.<span style="mso-spacerun: yes;"> </span>Unemployment rates do not correlate with
levels of far right support.<span style="mso-spacerun: yes;"> </span>While
Greece, which does have high levels of unemployment and suffered greatly from
the crisis, did experience the rise of the Golden Dawn, other countries that
have suffered from the crisis including Spain, Portugal and Ireland have not
experienced a similar rise: Spain 2000 and National Democracy (DN) have remained
marginal in Spain, the same is the case for the Portuguese National Renovator
Party (PNR), and there is no far right party in Ireland. On the other hand, countries
that have not experienced the worst of the crisis and generally have lower
levels of unemployment, such as Britain, France, and Denmark, are experiencing
a rise in far right party support. <span style="mso-spacerun: yes;"> </span></span></div>
<div class="MsoNormal" style="text-align: left;">
<span style="font-size: small;"><br /></span></div>
<div class="MsoNormal" style="text-align: left;">
<span style="font-size: small;">The problem with this explanation is therefore that it is
not consistent with patterns of far right party performance across Europe. This
is because it is missing a crucial piece of the puzzle: welfare state policies
mitigating the risks and costs that an economic crisis imposes on individuals. Ironically,
it seems that welfare cuts, employed to tackle Europe’s economic crisis, are to
blame for a broader political crisis, where the far right is flourishing.<span style="color: red;"> </span></span></div>
<div class="MsoNormal" style="text-align: left;">
<span style="font-size: small;"><br /></span></div>
<div class="MsoNormal" style="text-align: left;">
<span style="font-size: small;">In other words, austerity breeds right-wing extremism and
this why: The link between an economic crisis and far right support is the labour
market insecurity experienced by the middle class. When a crisis hits, those
who have a job fear that they will lose it. Those who don’t have a job (or
those who do lose it) fear that they will have no safety net or alternative
means of subsistence. The greater the risks and costs of unemployment arising
from the crisis the greater the insecurity. And in turn, the greater the
insecurity, the greater the likelihood for people to punish the mainstream and
reward far right parties.<span style="color: red;"> </span></span></div>
<div class="MsoNormal" style="text-align: left;">
<span style="font-size: small;"><br /></span></div>
<div class="MsoNormal" style="text-align: left;">
<span style="font-size: small;">One reason is that these parties pledge to limit foreigners’
access to jobs, thus appearing to be responding to increasing insecurity. <span style="mso-spacerun: yes;"> </span>Another is that these parties’ authoritarian vision
of order is appealing in a context where economic malaise is having a
disorderly effect on people’s lives.<span style="mso-spacerun: yes;"> </span>Finally,
far right populist rhetoric is appealing because mainstream parties take the
bulk of the blame both for the crisis itself and for inadequate policy
responses to it. </span></div>
<div class="MsoNormal" style="text-align: left;">
<span style="font-size: small;"><br /></span></div>
<div class="MsoNormal" style="text-align: left;">
<span style="font-size: small;">The welfare state, therefore, is the key to understanding
the rise of the far right as well as its <a href="http://www.researchgate.net/profile/Tim_Vlandas">varied performance
across Europe</a>: The extent of insecurity that people experience as a result
of the crisis is largely determined by how protective welfare state
institutions are. People fear losing their jobs less when job dismissal
regulations protect them from redundancy. And those who do lose their jobs
suffer less from this loss when unemployment benefits are more generous. A rise
in unemployment, therefore, is morel likely to lead to far right party support
when job dismissal regulations are low and unemployment benefits not generous. </span></div>
<div class="MsoNormal" style="text-align: left;">
<span style="font-size: small;"><br /></span></div>
<div class="MsoNormal" style="text-align: left;">
<span style="font-size: small;">This helps explain what happened in Spain and Portugal where
unemployment has increased but the far right has not emerged. Both countries
have high <a href="http://media.leidenuniv.nl/legacy/neujobs-vanvliet-%26-caminada-24-01-2012.pdf">unemployment
benefit replacement rate</a><span class="MsoHyperlink">s,</span> and job
dismissal regulations for those in permanent contracts are also <a href="http://www.oecd.org/employment/emp/oecdindicatorsofemploymentprotection.htm">comparatively
high</a>. By contrast, Greece and the UK, which have seen their far right party
support increase, have much <a href="http://media.leidenuniv.nl/legacy/neujobs-vanvliet-%26-caminada-24-01-2012.pdf">lower
replacement rates</a>. The UK also has one of the lowest employment protection
legislations in Western Europe. </span></div>
<div class="MsoNormal" style="text-align: left;">
<span style="font-size: small;"><br /></span></div>
<div class="MsoNormal" style="text-align: left;">
<span style="font-size: small;">Welfare state policies are the link between economic crisis,
unemployment and far right party support. Welfare cuts have increased the
insecurity of the European middle classes that are being hit by the economic
crisis. This matters because of the implications it has for policy. By
reversing austerity, which results in welfare cuts and increases insecurity, we
can limit the appeal of right-wing extremism. </span><br />
<span style="font-size: small;"><br /></span>
<span style="font-size: small;">This piece is co-authored with <a href="http://www.reading.ac.uk/spirs/about/staff/d-halikiopoulou.aspx" rel="nofollow" target="_blank">Daphne Halikiopoulou</a>. Daphne Halikiopoulou is Associate Professor in Comparative Politics at University of Reading. <a href="http://www.reading.ac.uk/spirs/about/staff/t-r-g-vlandas.aspx" rel="nofollow" target="_blank">Tim Vlandas</a> is Lecturer of Politics at University of Reading. This piece builds on their argument in their co-authored piece <a href="http://www.researchgate.net/publication/280159820_Risks_Costs_and_Labour_Markets_Explaining_Far_Right-Wing_Party_Success_in_European_Parliament_Elections" rel="nofollow" target="_blank">Risks, Costs and Labour Markets: Explaining Far Right-Wing Party Success in European Parliament Elections</a> forthcoming in the<a href="http://onlinelibrary.wiley.com/journal/10.1111/%28ISSN%291468-5965" rel="nofollow" target="_blank"> Journal of Common Market Studies</a>.</span> </div>
</div>
Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-4632732282865918706.post-3939811671768004812015-06-01T11:56:00.000+01:002015-06-01T12:10:37.125+01:00Changing welfare states in the post-crisis period<div dir="ltr" style="text-align: left;" trbidi="on">
<div style="text-align: justify;">
The OECD has published its latest social expenditure <a href="http://www.oecd.org/els/soc/OECD2014-Social-Expenditure-Update-Nov2014-8pages.pdf">update </a>covering 2014. It’s a very interesting small report well worth reading. Here are 8 points that caught my eye in the latest data which I organise in three themes: surprising changes in ranking, the articulation of short term and long term dynamics and the importance of paying attention to the allocation and composition of social spending, not just the aggregate spending. </div>
<div style="text-align: justify;">
<br /></div>
<div style="text-align: justify;">
<b>Surprising changes in ranking (Figure 1)</b></div>
<div style="text-align: justify;">
<br /></div>
<div style="text-align: justify;">
1. Scandinavian countries are no longer always the top social spenders. In 2014, France (1st) spent more than Finland (2nd), Belgium (3rd) more than Denmark (4th), Italy (5th) and Austria (6th) more than Sweden (7th). For a very long time, Scandinavia had much large welfare states than other countries, which was attributed to particularly strong left wing parties and unions, as well as production models that required such a welfare state. This seems to be changing (though see point 5 below). </div>
<div style="text-align: justify;">
<br /></div>
<div style="text-align: justify;">
2. Spain (8th) and Italy (5th) now spend more on social expenditures than Germany (8th), while Portugal (9th) spends more than the Netherlands (10th). But they do so in a way which is particularly inegalitarian (see point 6 below) and inefficient (consistent with older research by, among others, Andre Sapir). </div>
<div style="text-align: justify;">
<br /></div>
<div style="text-align: justify;">
<b>Diversity in short term changes, but in the long run social spending increases</b> </div>
<div style="text-align: justify;">
<br /></div>
<div style="text-align: justify;">
3. The biggest absolute increase in social spending since 2007 can be seen in Finland, Spain, Belgium, Japan and Ireland. Nine countries have managed to reduce spending below their post-2007 peak: Sweden, Greece, Hungary, UK, Ireland, Canada, Iceland, Estonia and Chile (Figure 1). </div>
<div style="text-align: justify;">
<br /></div>
<div style="text-align: justify;">
4. Every decade since the 1960s has seen an increase in the OECD’s average public social expenditures. This average hides an important difference between the US and the EU which start diverging in the mid-1970s. By 2012, the OECD average spending has stabilised around 22%, EU21 around 25%, US under 20%, while Japan spends more than the OECD average for the first time (Figure 2). </div>
<div style="text-align: justify;">
<br /></div>
<div style="text-align: justify;">
<b>It’s not what you spend, it’s how you spend it</b> </div>
<div style="text-align: justify;">
<br /></div>
<div style="text-align: justify;">
5. But Scandinavia does continue to spend much more on all social services (excluding health), whereas pension commitments are much larger in continental European countries than Scandinavia (Figure 4). And indeed the challenge for most welfare states is going to be to foster efficiency and equality in a context where health and pensions are absorbing an ever rising amount of resources. </div>
<div style="text-align: justify;">
<br /></div>
<div style="text-align: justify;">
6. What characterises southern Europe is not high social spending, it’s a high percentage of spending targeted at the better off (highest income quintile) and very little targeted at the poor (the bottom quintile). Scandinavia and liberal countries do well in terms of targeting spending toward bottom quintile (Figure 5). </div>
<div style="text-align: justify;">
<br /></div>
<div style="text-align: justify;">
7. Liberal countries (Australia, Canada, US, UK, New Zealand) are the biggest ‘means testers’: They have among the highest share of cash benefits with eligibility and entitlements requirements that are conditional on the recipient's current income and assets (Figure 6). While it means they do not fare badly in terms of targeting spending to the bottom quintile (point 6), reducing universality of benefits undermines public support for generous benefits, hence the low social spending figures. Countries must strike a balance between allocating sufficient amounts to the bottom quintile to promote effectiveness of spending in reducing poverty and inequality, and distributing parts of spending to other income quintiles to ensure legitimacy.</div>
<div style="text-align: justify;">
<br /></div>
<div style="text-align: justify;">
8. We should not confuse what countries spend overall and the public-private distribution of that social spending. So far I’ve only discussed gross public spending: when looking at net social spending (i.e. including private social spending and effect of tax), the US comes out second (from 23rd) after France! UK jumps from 15th to 5th, Japan from 14th to 7th and Netherlands from 13th to 6th. Others fall in ranking: Sweden from 7th to 11th, Italy from 6th to 8th, and Spain from 8th to 10th position (2011 figures, Figure 7). The combined drive by governments such as the UK to reduce public social spending and privatise parts of the provision may mean they end up in the worst of both worlds: spending as much as before, but with a higher share going through an often less efficient (for the case of health care) and less egalitarian provider.
</div>
</div>
Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-4632732282865918706.post-9664075374392291862015-05-25T11:14:00.000+01:002015-05-25T11:14:27.759+01:00The conservative victory and the welfare state: Here comes the pain<div dir="ltr" style="text-align: left;" trbidi="on">
The Conservatives have won an unexpected majority. Now must come the cuts. Even Ian Duncan Smith is worried about the scale of the cuts promised. In this post I review the good, the bad, the ugly and unknown proposals that the conservatives have in stock for the welfare state. It’s an open question which ones they end up implementing and more crucially where they impose the pain of the non-specified cuts they promised in their manifesto.<br />
<br />
<b>The good</b><br />
<br />
There may be some attempts to raise the purchasing power of low income workers. They want to raise the threshold beyond which workers start paying income tax to 12,500£. But whether this will on the net make low income workers better off depends crucially on where they cut welfare state spending further (see below). A downside is of course that this further erodes the government’s tax raising capacity. On minimum wages, they declared they would follow the recommendations from the Low Pay Commission to raise minimum wage to over $8 by the end of 2020. Again whether this will actually represent an improvement depends on the inflation rate over the next five years.<br />
<br />
In addition to these uncertain improvements to the conditions of low income workers are two big spending promises. The first one concerns giving working parents 30 hours of free childcare for 3 and 4 years old, which they estimate will cost about £350 million. The second one is to protect the NHS by keeping it free at the point of use and increasing the NHS funding by an additional £8 billion by 2020. For the latter increase in spending to make the NHS sustainable will require additional ‘efficiency savings’ of 2% to 3% a year which are likely to be very difficult to achieve. So in all likelihood, the Conservatives will have to choose between a deterioration of quality or allocating extra spending.<br />
<br />
Finally, two ambiguously positive proposals. First, they have promised that they would introduce a national postgraduate loan system for taught masters and PhD courses. This will not resolve much of the issues of university funding and access to undergraduate degrees, but fills a gap for postgraduate studies where access was hampered. Second, the benefit cap, which I discuss below in more detail, will not include the Disability Living Allowance.<br />
<br />
<b>The bad</b><br />
<br />
In a context of austerity, the Conservatives are wasting tax revenues on the better off while cutting benefits on the worst off. This makes no economic sense and will likely depress the economy given the different marginal propensity to consume of different income groups: the poor will reduce their spending in response to lower benefits more than the rich will increase their spending in reactions to lower taxes. The net effect on aggregate demand, even in the absence of additional consolidation, will be negative.<br />
<br />
Regarding benefits, they will freeze working age benefits for two years from April 2016 (except for maternity allowance, statutory maternity pay, statutory paternity pay, statutory adoption pay and statutory sick pay). Two groups are specifically targeted. First, EU immigrants: they plan to further restrict benefits (housing, JSA, etc) to EU jobseekers in the first four years. This may be consistent with EU law as long as the restriction applies to non-contributory benefits. However, studies have shown that immigrants bring more revenues than they cost so there seems to be little reasons to limit benefits on economic grounds. Second, 18-21 years old will be eligible to a less generous ‘Youth Allowance’ limited to six months and will also have less access to housing benefits.<br />
<br />
<b>The ugly</b><br />
<br />
The three most problematicc proposals are the benefit cap, the undercutting of strikes and promotion of precarious contracts and sanctions for addicts. With respect to the first, they will lower the current benefit cap on the benefits that households can receive to £23,000 (from £26,000). In practice this will only hurt families that need it the most such as those with many children or those paying high rents.<br />
<br />
Next, they want to rely on precarious contracts to break strikes by repealing the “nonsensical restrictions banning employers from hiring agency staff to provide essential cover during strikes”. This fundamentally undermines the right to strike as precarious contracts are likely less costly than the workers that are striking. Since those who strike are not being paid by their employers, strikes will no longer have any impact on employers.<br />
<br />
Finally, those who refuse the “medical help they need” will see their benefits reduced. This concern both those addicted to drugs and the clinically obese. Assuming that at least some of these recipients would change their behaviour in response to the change, this still implies that some very vulnerable recipients that are not able to change their behaviour will lose benefits.<br />
<br />
<b>The known unknowns</b><br />
<br />
Given that they have promised to protect Schools and international development, and that they will be spending more on the NHS and childcare, unspecified cuts are going to be large. In total the IFS estimates that they will have to cut £22.5 billion from departmental spending in ‘unprotected’ areas including defence, law and order, social care, and others. How much of this will be frontloaded in the first couple of years remains to be seen, but this will no doubt necessitate very drastic cuts.<br />
<br />
In a post-crisis context where there is a heightened need for the welfare state there are very few policy domains that be cut without imposing significant hardships. As I’ve argued elsewhere, the many new challenges related to ageing and changing labour market structures would also require more rather than less welfare state spending.
</div>
Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-4632732282865918706.post-82248779562628526522015-03-29T12:31:00.001+01:002015-03-29T12:32:54.267+01:00Curbing immigrants' benefits is a bad idea<div dir="ltr" style="text-align: left;" trbidi="on">
The recent 'debate that was not' between Ed Miliband and David Cameron was depressing because both now seem to embrace the fantasy that curbing benefits to immigrants would be helpful. This was already an idea that David Cameron had proposed in a <a href="http://press.conservatives.com/post/103802921280/david-cameron-speech-on-immigration">speech</a> not long ago and that I had <a href="http://blogs.lse.ac.uk/netuf/2014/12/17/why-cameron-is-wrong-on-the-cost-of-migrants/">written about</a>. This is what I had written at the time and I think it still applies.<br />
<br />
<br />
Saddened by the rise of
immigration above ‘the tens of thousands’ promised, Cameron has proposed new curbs on EU immigrants’ access to UK benefits. This proposal is unlikely to be feasible given current EU legislation.
Because it is based on a flawed assessment of the problem, this proposal
is also unlikely to have any effect on EU immigration and will probably
make things worse.<br />
<br />
<b>What’s the problem?</b><br />
According to the <a href="http://www.ons.gov.uk/ons/rel/migration1/migration-statistics-quarterly-report/november-2014/sty-net-migration.html">Office for national statistics</a>,
net migration – the difference between those leaving (323,000) and
those entering (583,000) the country – was 260,000. One often throws
this number around in the hope that it will sound big. However, common
sense suggests otherwise. Indeed, this represents 0.36% of the <a href="http://www.ons.gov.uk/ons/rel/pop-estimate/population-estimates-for-uk--england-and-wales--scotland-and-northern-ireland/2013/index.html">total population</a>
of the UK (64 million). Yes, 0.36% and you are meant to believe this is
a major problem facing the country today. Indeed Cameron criticises the
“complacent view that says the levels of immigration we’ve seen in the
past decade aren’t really a problem at all”.<br />
<br />
But the truly amazing thing is that not even half of those entering
the UK are EU citizens: of the 583,000 entering the country, only
228,000 came from other EU countries in the year ending June 2014. And <a href="http://www.ons.gov.uk/ons/rel/migration1/migration-statistics-quarterly-report/august-2014/sty-eu-migration.html">about 20%</a> of EU immigrants came to study. Compare this with the <a href="http://ons.gov.uk/ons/taxonomy/index.html?nscl=Population">latest number</a> of births (812,970) and deaths (569,024) in the UK. Or think about the fact that we <a href="http://ons.gov.uk/ons/rel/lms/labour-market-statistics/november-2014/sty-labour-market-statistics.html">still have</a>
1.96 million people seeking work (only 0.93 million receiving job
seeker’s allowance) and 9 million not in the labour force (i.e. those
between 16 and 64 either not seeking or not available to work).<br />
<br />
<b>The proposed solution</b><br />
Despite no evidence that the bulk of immigration is driven by
benefits, Cameron proposes two measures that are entirely based on this
assumption:<br />
<ul>
<li>He first suggests<b> “</b>EU migrants should have a job
offer before they come here” but then contends that “UK taxpayers will
not support them if they don’t”, which begs the question: how could UK
taxpayers support them if they are not allowed to come here in the first
place without having a job offer? Never mind that people also pay taxes
when they consume goods and services.</li>
</ul>
<ul>
<li>Second, he proposed introducing a two-tier system where “once they
are in work, they [EU citizens] won’t get benefits or social housing
from Britain unless they have been here for at least four years.” It’s
totally unclear of course how this is supposed to influence EU
immigration into the country. It’s also grossly unfair since it will –
arbitrarily – prevent people who are contributing to government revenues
to claim certain benefits. </li>
</ul>
<br />
<b>Why it doesn’t make sense</b><br />
The first issue with the proposed reform is a misreading of what’s
driving EU immigrants’ to come to the UK. Cameron argues that the
“generous welfare system, including for those in work – makes the UK a
magnetic destination for workers from other European countries”. But
many of the benefits are in fact <a href="http://blogs.lse.ac.uk/netuf/2014/05/01/debunking-the-myth-that-keeps-coming-back-excessive-spending-on-labour-market-policies-and-benefit-fraud-in-the-uk/">not more generous</a> than in many other EU countries. And migrants are less likely to claim benefits than <a href="http://cep.lse.ac.uk/pubs/download/pa014.pdf">natives</a>.<br />
<br />
In fact, immigrants that are from Central and Eastern European countries are <a href="http://www.cream-migration.org/publ_uploads/CDP_18_09.pdf">60% less likely than natives</a>
to receive state benefits or tax credits and 58% less likely to live in
social housing. In 2011, across all benefits given by Department of
Work and Pensions, <a href="https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/196677/nat_nino_regs.pdf">6.4% were non-UK nationals</a>
and only a quarter of those were from within the European Union.
Ironically, Cameron himself concedes as much: “And let me be clear: the
great majority of those who come here from Europe come to work, work
hard and pay their taxes.” If the majority of immigrants come to work –
and they do – restricting benefits would at best alter the immigration
decisions of very few people.<br />
<br />
Second, the reform is unnecessary. Indeed, as Cameron himself argues
the surge in EU immigration is temporary and driven by the economic
downturn in other EU countries: “And once economic growth returns to the
countries of the Eurozone, and those economies start to grow and
prosper, the economic pendulum will start to swing back.” If the problem
is a temporary downturn in other EU economies, a permanent curb on EU
immigrants’ benefits is unlikely to solve it.<br />
<br />
Third, the reform would make matters worse. Cameron boasts that “So
as Universal Credit is introduced we will pass a new law that means EU
jobseekers will not be able to claim it. […] So instead of £600, they
will get nothing.” But if the concern over immigration, as is frequently
voiced, is that it puts pressure on the employment conditions and wages
of workers in certain occupations, then making EU immigrants
non-eligible to benefits will increase rather than decrease the pressure
that takes place.<br />
<br />
Indeed, faced with literally no safety net, EU immigrants would be
forced to accept any work at any wages. Current evidence in any case
suggests that immigration has <a href="http://www.huffingtonpost.co.uk/2013/09/02/jonathan-portes-immigration_n_3856191.html">at worst</a>
a mixed impact on native workers – beneficial for some workers and
detrimental to others. Immigration also entails a clearly beneficial
effect on the net fiscal position of the government. Thus, if successful
in preventing immigration the reform would paradoxically lead to a
worsening of public finances.<br />
<br />
Last but not least, to the extent that a high and localised influx of
immigrants does indeed put pressure on public services, reducing the
overall number of those who come in the foreseeable future, while
deteriorating EU immigrants’ social protection, does nothing to
alleviate the pressure that has already accumulated. Pressure on public
services is an allocation problem: immigration and indeed the general
population concentrate in certain parts of the UK territory.<br />
<br />
The solution is therefore twofold. First, making other parts of the
UK more economically attractive would distribute population more evenly
across the UK.The UK does not have an usustainable population growth: it
had the 152nd highest rate of population growth of the <a href="https://www.cia.gov/library/publications/the-world-factbook/geos/uk.html">world</a>. Its <a href="https://www.cia.gov/library/publications/the-world-factbook/rankorder/2112rank.html?countryname=United%20Kingdom&countrycode=uk&regionCode=eur&rank=38#uk">net migration rate per 1,000 persons</a>
is lower than in Ireland, Cyprus, Norway, Spain, Australia, Canada,
Sweden,Switzerland, Italy, and Portugal. The UK population density –
people per square Km – did increase from 230 in 1981 to 255 in 2009 (<a href="http://www.google.co.uk/url?sa=t&rct=j&q=&esrc=s&source=web&cd=4&ved=0CDcQFjAD&url=http%3A%2F%2Fwww.ons.gov.uk%2Fons%2Frel%2Fpopulation-trends-rd%2Fpopulation-trends%2Fno--142--winter-2010%2Fthe-uk-population--how-does-it-compare.pdf&ei=bnqNVNP2FImXaoKtgJAC&usg=AFQjCNHdFIaIxvYQJoOFLbgrafEO8H4iww&sig2=9zNmTgYRrqztQe_F6BF_sg&bvm=bv.81828268,d.d2s&cad=rja">table 6</a>). But compare this to density in London: 4,932 people per square kilometre in 2009 (<a href="http://www.google.co.uk/url?sa=t&rct=j&q=&esrc=s&source=web&cd=4&ved=0CDcQFjAD&url=http%3A%2F%2Fwww.ons.gov.uk%2Fons%2Frel%2Fpopulation-trends-rd%2Fpopulation-trends%2Fno--142--winter-2010%2Fthe-uk-population--how-does-it-compare.pdf&ei=bnqNVNP2FImXaoKtgJAC&usg=AFQjCNHdFIaIxvYQJoOFLbgrafEO8H4iww&sig2=9zNmTgYRrqztQe_F6BF_sg&bvm=bv.81828268,d.d2s&cad=rja">page 20</a>).<br />
<br />
Second, we should invest in the public services that are under
pressure. To the extent that EU immigrants have a positive net fiscal
effect, they should facilitate such an investment. Some may argue that
it is EU immigration that puts pressure on these services. However,
given net economic gains of immigration the solution should not be to
reduce immigration but rather to use the extra tax revenues that EU
workers generate to invest in pressurised locations.<br />
<br />
An EU version of this solution could also be pushed by this
government: to create an ‘EU immigration compensation fund’ that helps
local communities cope with the pressures that large influx of
immigrants may generate. In a context where the EU is associated with
austerity, thereby fuelling extremism, this fund would improve public
services where it is most needed while addressing EU citizens’
legitimate concerns over immigration.</div>
Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-4632732282865918706.post-34365673906448328772013-08-13T13:30:00.003+01:002013-08-13T13:30:46.453+01:00William Lazonick - Rethinking the State<div dir="ltr" style="text-align: left;" trbidi="on">
<iframe allowfullscreen="" frameborder="0" height="315" src="//www.youtube.com/embed/-lXjCTHHjMY" width="560"></iframe></div>
Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-4632732282865918706.post-82632444449424890262013-08-05T18:17:00.001+01:002013-08-05T18:17:11.468+01:00The world's tallest slum<div dir="ltr" style="text-align: left;" trbidi="on">
<iframe allowfullscreen="" frameborder="0" height="315" src="//www.youtube.com/embed/v1p9jlQUW0k" width="560"></iframe></div>
Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-4632732282865918706.post-56993427248944016252013-08-04T15:05:00.003+01:002013-08-04T15:05:57.699+01:00The Myth of Americans Living Beyond Their Means with Robert Reich<div dir="ltr" style="text-align: left;" trbidi="on">
<iframe allowfullscreen="" frameborder="0" height="315" src="//www.youtube.com/embed/uB_Yuo6XNAA" width="560"></iframe>
</div>
Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-4632732282865918706.post-38628587790941743832013-07-31T14:21:00.000+01:002013-07-31T14:21:05.919+01:00Interview with James G. March on the 50th Anniversary of 'A Behavioral Theory of the Firm' <div dir="ltr" style="text-align: left;" trbidi="on">
<iframe allowfullscreen="" frameborder="0" height="315" src="//www.youtube.com/embed/4izFqAZR360" width="560"></iframe></div>
Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-4632732282865918706.post-76734797233580848332013-07-20T19:17:00.001+01:002013-07-20T19:17:00.413+01:00The effect of wealth and income on morals and ethics<div dir="ltr" style="text-align: left;" trbidi="on">
<iframe allowfullscreen="" frameborder="0" height="315" src="//www.youtube.com/embed/IuqGrz-Y_Lc" width="560"></iframe>
</div>
Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-4632732282865918706.post-3271427846984509912013-07-15T16:38:00.001+01:002013-07-15T16:38:42.879+01:00UK banking sector assets as % of GDP<div dir="ltr" style="text-align: left;" trbidi="on">
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEis3YdhlcCzDpMz7F-KEFUMMHzBw_eWZmtq1rzxT9hyphenhyphenzqPFYsfnx21rSTaKL2M-j3ccLs_y364ypCGyzAnXcRm5-6n1rlcWR_xW2OLWadkD3jDoXOKKdGud-0KeaDk4geu-VawvbO5Nu1k_/s1600/UK+banking+sector+assets+as+%25+of+GDP.bmp" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEis3YdhlcCzDpMz7F-KEFUMMHzBw_eWZmtq1rzxT9hyphenhyphenzqPFYsfnx21rSTaKL2M-j3ccLs_y364ypCGyzAnXcRm5-6n1rlcWR_xW2OLWadkD3jDoXOKKdGud-0KeaDk4geu-VawvbO5Nu1k_/s1600/UK+banking+sector+assets+as+%25+of+GDP.bmp" height="466" nya="true" width="640" /></a></div>
Source: taken from BANKING ON THE STATE by Piergiorgio Alessandri & Andrew G Haldane; Bank of England; November 2009. </div>
Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-4632732282865918706.post-56838067542040133682013-07-11T16:08:00.001+01:002013-07-11T16:08:09.382+01:00The marketisation of academia and its adverse effect on intellectual and methodological pluralism<div dir="ltr" style="text-align: left;" trbidi="on">
On the monoculture of american international political economy:<br />
<br />
<div style="text-align: justify;">
"The monoculture we observe today also seems to me to be the product of a competitive academic environment in which we are compelled to live by the mantra of 'publish or perish'. Eager to make a name for ourselves in an 'evolutionary struggle for journal space' we quickly learn that paradigmatic or methodological eclecticism is a luxury for those with tenure and established reputations."..."We collectively converge, willingly or not, upon a socially constructed conventional wisdom."</div>
<br />
Catherine Weaver (Review of International Political Economy 16:1; 2009, page 1) </div>
Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-4632732282865918706.post-13695541468674723452013-07-03T14:01:00.001+01:002013-07-03T14:01:29.489+01:00The Politics of Temporary Work Deregulation in Europe: Solving the French PuzzleMy <a href="http://pas.sagepub.com/content/early/2013/07/01/0032329213493754.abstract">latest paper</a> on the politics of temporary work regulation in Western Europe.<br />
<br />
<em>Politics&Society</em><br />
(Published online before print <span class="slug-ahead-of-print-date">July 2)</span><br />
<br />
<strong>Abstract</strong><br />
<div style="text-align: justify;">
Temporary work has expanded in the last three decades with adverse implications for inequalities. Because temporary workers are a constituency that is unlikely to impose political costs, governments often choose to reduce temporary work regulations. While most European countries have indeed implemented such reforms, France went in the opposite direction, despite having both rigid labor markets and high unemployment. My argument to solve this puzzle is that where replaceability is high, workers in permanent and temporary contracts have overlapping interests, and governments choose to regulate temporary work to protect permanent workers. In turn, replaceability is higher where permanent workers’ skills are general and wage coordination is low. Logistic regression analysis of the determinants of replaceability— and how this affects governments’ reforms of temporary work regulations—supports my argument. Process tracing of French reforms also confirm that the left has tightened temporary work regulations to compensate for the high replaceability.</div>
Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-4632732282865918706.post-21112071306541701362013-06-17T16:46:00.002+01:002013-06-17T16:46:42.241+01:00Game theory in action: commitment problems in the prisonner's dilemma<iframe allowfullscreen="" frameborder="0" height="315" src="http://www.youtube.com/embed/S0qjK3TWZE8" width="420"></iframe>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-4632732282865918706.post-30253007446557465342013-05-27T18:54:00.003+01:002013-06-01T12:49:44.646+01:00Public policy responses to the current fiscal crisis in one quote...<div dir="ltr" style="text-align: left;" trbidi="on">
<span style="font-size: large;">Politics is the art of looking for trouble, finding it whether it exists or not, diagnosing it incorrectly, and applying the wrong remedy."<sup class="reference" id="cite_ref-4" jquery18305946079382194633="15"><a href="http://en.wikipedia.org/wiki/Ernest_Benn#cite_note-4"></a></sup> <b><a href="http://en.wikipedia.org/wiki/Ernest_Benn">Ernest Benn</a></b></span><br />
<br /></div>
Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-4632732282865918706.post-52435630102593874162013-05-26T13:26:00.001+01:002013-05-26T13:28:14.745+01:00Public and private European Debt in 2001 and 2012<div style="text-align: justify;">
Thanks to the really good <a href="http://www.ritholtz.com/blog/">Big Picture Blog</a>, I've just discovered this really cool tool developed by the <a href="http://graphics.wsj.com/national-debts">Wall Street Journal</a> to visualise the evolution of private and public debt.</div>
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Restricting the sample to Western European countries (with Canada and the US included as reference point) and comparing the debt situation in 2001 to that in 2012, reveals some interesting patterns. The Y axis displays the level of public debt as % of GDP, the X axis private debt as % of GDP, and the size of the circles indicates the level of aggregate GDP.</div>
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First in 2001, one observes the well-documented trade-off between public and private debt: southern European countries fared worse with respect to public debt but much better in terms of private debt. Thus, among European countries the main difference is more about the distribution of debt among public and private actors than the level.</div>
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Turning to 2012, a lot of countries have seen their levels of public debt rise (note that Greece prior to the bailout reached roughly 120% of public debt in 2011 - it's now gone down to French levels). Except for Sweden and Norway that fare much better than the rest, one continues to see an possible trade-off between public and private debt. Spain as is known faces particularly problematic levels of private debt (but note also the Netherlands and Denmark).</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjVUjhD93A9CNJRn1jM_e7PFkbUA6ZUGOO86Hmd6j-BbIqEd4dFBsa3p1dOTjS9eU_0cEAAvdcV0pkKJpxQgrJgGotTXMbqx7WbFFAMKqQqkBhkNq7OxxDY_iATymKGra1wAr7Yi6YNBuEH/s1600/EU+debt+2012.bmp" imageanchor="1" style="clear: left; cssfloat: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjVUjhD93A9CNJRn1jM_e7PFkbUA6ZUGOO86Hmd6j-BbIqEd4dFBsa3p1dOTjS9eU_0cEAAvdcV0pkKJpxQgrJgGotTXMbqx7WbFFAMKqQqkBhkNq7OxxDY_iATymKGra1wAr7Yi6YNBuEH/s1600/EU+debt+2012.bmp" height="344" width="640" ya="true" /></a></div>
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Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-4632732282865918706.post-33174148955980458072013-05-24T11:07:00.001+01:002013-05-24T11:09:15.887+01:0040,000 pageviews reached<br />
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