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Latest RLAB News

Below are the latest headlines for CEP and STICERD. For full coverage see the CEP News and Visitors Site and the STICERD News and Visitors Site

LSE Business Review blog
Towards a modern UK industrial strategy

There's an opportunity to build a new system based on transparency, independence and a long-term outlook, write Anna Valero and Richard Davies

Every government has an industrial strategy however it is articulated: government affects the investment climate for business through tax and regulation; establishes national priorities; invests in skills, infrastructure and research; and procures outputs from the private sector – all of which influence the evolution of the private economy.

Related publications

UK Growth: A New Chapter, the LSE Growth Commission’s 2017 report

http:// units/growthCommission/documents/ pdf/2017LSEGCReport.pdf

Related links

LSE Growth Commission webpage:

Jordan Times
The two pillars of French economic reform

Article by Philippe Aghion and Benedicte Berner

The French government has just announced the guidelines for a new labour code, its first major reform to boost France’s economy by giving more flexibility to companies to adapt to the marketplace.

The second major reform sought by President Emmanuel Macron’s Cabinet — an overhaul of the French state — is set to follow. The changes to the labour code have four goals. First, direct negotiations between employers and employees in small and medium-size firms (accounting for 55 per cent of the workforce) would be facilitated by allowing such companies to negotiate with elected representatives not mandated by the trade unions.

Pittsburgh Post-Gazette
David Brooks: The economy isnít broken

In a well-functioning economy, workers are rewarded for their productivity. As output, jobs and hours worked rise, so does income. Over the past two years, that seems to be exactly what’s happening.

The evidence from the past two years strongly supports those who have argued all along that income has not decoupled from productivity. A wide range of economists, including Martin Feldstein, Stephen Rose, Edward Lazear, Joao Paulo Pessoa, John Van Reenen, Richard Anderson of the St. Louis Fed and a team from Goldman Sachs, have produced studies showing wages tracking very predictably with productivity.

Economic Decisions Talk at the British Science Festival
Oriana Bandiera, Nava Ashraf, Maitreesh Ghatak

People aren't always as selfish as economists assume. This event was part of the British Science Festival held in Brighton in September 2017, and examined how our social preferences affect our decision making and explored the economic consequences.

The†expert panel, including Oriana Bandiera, Nava Ashraf, and Maitreesh Ghatak, discussed how we can incorporate personal motivations into economic models and discussed the implications on the organisation of firms, the use of monetary incentives, and the delivery of public services.

You can listen to the discussion from this link

New Anthony Atkinson Chair of Economics at LSE
Oriana Bandiera

We are proud to announce the creation of the new Anthony Atkinson Chair in Economics at the LSE. The chair is named in memory of Professor Anthony Atkinson, who sadly died in January this year. Professor Atkinson was a giant in the world of economics. His work has has a profound influence on the study of inequality, and on the thinking of the next generation of academic economists across the globe.

The Chair has been awarded to Professor Oriana Bandiera, Director of STICERD and Professor of Economics. STICERD was home to Tony for much of his career- he served as Director for many years and always remained close to the centre. Oriana worked closely with Tony and recalls that "[h]is perfect alignment of intellect and morality gave him the calm and clarity to tackle the difficult path from rigorous research to effective policy design."

CASE Report launch.
Income directly affects children's outcomes

Poorer children have worse cognitive, social-behavioural and health outcomes because they are poor, and not just because poverty is correlated with other household and parental characteristics, according to a new report from the London School of Economics and Political Science (LSE).

Kerris Cooper and Kitty Stewart of the Centre for the Analysis of Social Exclusion (CASE) and the Department of Social Policy at LSE found the strong evidence of the causal effect between household income and children’s outcomes after reviewing 61 studies from OECD countries including the US, UK, Australia, and Germany.

Ms Cooper commented: “There is abundant evidence that children growing up in lower income households do less well than their peers on a range of wider outcomes, including measures of health and education. We wanted to find out if money is important in itself, or do these associations simply reflect other differences between richer and poorer households, such as levels of parental education or attitudes towards parenting.

“Our conclusions are clear: there is a strong causal effect. Money makes a difference to children’s outcomes.”

The report, Does Money Affect Children’s Outcomes: An Update, shows that income itself is important for children’s cognitive development, physical health, and social and behavioural development.

Looking to explain why income matters, they found evidence in support of two central theories, one relating to parents’ ability to invest in goods and services that further child development, and the other relating to the stress and anxiety parents suffer caused by low income. There is particularly strong evidence that increasing income is likely to reduce maternal depression, which is known to be important for children’s outcomes.

In terms of how much money matters they found effect sizes were similar to spending on schools, however the effects of increased income are likely to be wider-reaching as income affects more household members and impacts children’s outcomes across multiple domains as well as impacting the home environment.

They also confidently conclude that increases in income make more difference to families who have low income to begin with.

The report, funded by the Joseph Rowntree Foundation, updates an original review from 2013, with the most recently available evidence. The authors conclude that reducing income poverty would have “important and measurable effects both on children’s environment and on their development”.

It says: “Given rising levels of child poverty in the UK, and much steeper increases projected for the next few years, this conclusion could not be more important or topical, especially in light of stated government commitment to promoting social mobility. Certainly any strategy that seeks to improve life chances and equalise opportunities for children without turning the tide against growing levels of child poverty is going to face an uphill struggle and place an even greater burden on services that seek to alleviate various negative effects of inadequate family resources.

The report is available here: