Brian Nolan, Juan C. Palomino, Philippe Van Kerm, Salvatore Morelli, 19 September 2020

Whether and how much intergenerational transfers contribute to wealth inequality is still subject to debate. This column analyses household survey data on inheritance and gifts inter vivos in France, Germany, Great Britain, Ireland, Italy, Spain, and the US to relate current household wealth levels and inequality to the receipt of intergenerational wealth transfers. In these countries, large transfers increase overall wealth inequality. Strengthening taxation capacity and instating lifetime capital acquisitions tax for gifts and inheritances may help counter the dis-equalising effect of intergenerational transfers.

Arun Advani, Felix Koenig, Lorenzo Pessina, Andy Summers, 17 September 2020

Top incomes have grown rapidly in recent decades and this growth has sparked a debate about rising inequality in Western societies. This column combines data from UK tax records with new information on migrant status to show that that migrants are highly represented at the top of the UK’s income distribution. Indeed, migration can account for the majority of top-income growth in the past two decades and can help explain why the UK has experienced an outsized increase in top incomes.

Debopam Bhattacharya, Renata Rabovic, 15 September 2020

The balance between merit and diversity in university admissions is a controversial issue, but statistical analysis is challenging because applicant characteristics are only observed by admissions officers and post-entry test scores are only available for those who were admitted. This column uses a novel, outcome-based test of merit-based admissions at Cambridge University, where some applicants enter via a second-round clearing mechanism from a ‘pool’, to bypass the non-observability problems. The test reveals robust evidence of higher admissions standards for men in STEM and economics, and weak evidence of the same for private school applicants. The gender gap is non-evident in law and medicine.

Richard Button, Marek Rojicek, Matt Waldron, Danny Walker, 07 September 2020

The spread of Covid-19 and the measures taken to contain it have led to a sharp fall in economic activity, which has put pressure on many companies’ cash flows.  This column estimates a cash flow deficit summing to £135 billion for the 2020-21 financial year for mid-size and large UK companies. Supported by public policy, UK companies have already raised a large amount of external finance, providing them with liquidity to help bridge some of the disruption.  But additional liquidity will be required and equity finance will likely be important during the recovery phase.

Michèle Belot, Syngjoo Choi, Egon Tripodi, Eline van den Broek-Altenburg, Julian C. Jamison, Nicholas W. Papageorge, 24 July 2020

Almost all countries in the world have implemented drastic measures to contain the COVID-19 pandemic. This column documents the effects of the epidemic and containment measures using representative individual data on age and income from three Western and three Asian countries. Younger groups in all countries have been affected more, both economically and non-economically. Differences across income groups are less clear and less consistent across countries. The young are less compliant and supportive of the containment measures, no matter how hard they have been affected by them.

Richard V. Burkhauser, Nicolas Hérault, Stephen P. Jenkins, Roger Wilkins, 21 July 2020

The share of total income held by those at the very top of the income distribution has been much analysed, but despite a rising share of women in the top 1% of the income distribution, less is known about the gender divide at the top. This column analyses gender differences among the UK top 1% between 1999 and 2015. The rising share of women in the top 1% is largely accounted for by women having increased the time they spend in full-time education by more than men did.

Walker Hanlon, Casper Worm Hansen, Jake Kantor, 15 July 2020

Temperature can affect human health and mortality. Historical evidence on the changing relationship between temperature and mortality may be useful in today’s world as we consider adaptive strategies to face global warming. This column uses detailed weekly mortality data from London for 1866–1965 to examine how the temperature-mortality relationship changed as the city developed. In 1866–1914, high-temperature events increase mortality for several weeks, but much of the effect of high temperatures on mortality has disappeared after WWI. The change is linked to the significant reduction in infant digestive disease around 1900.

David Miles, 13 July 2020

A major policy issue for many governments is how long a lockdown introduced to slow the spread of the COVID-19 virus should be maintained. This column analyses what an assessment of costs and benefits of lockdown imply for how policy should be set in the UK. The question is simple: Has the length of the UK lockdown been warranted and should restrictions now be eased significantly? Using a wide range of scenarios for costs and benefits it appears as though extending the UK lockdown beyond three-months (that is beyond June) was not likely to be optimal.  

Nicolas Gonne, Olivier Hubert, 08 July 2020

The shutdown of passenger air travel at the height of the COVID-19 pandemic slowed the spread of the disease but caused major economic losses for the sector. This column presents a cost-benefit analysis of the global freeze of passenger air traffic. While any conclusion is highly dependent on a handful of factors, including the controversial and difficult-to-calculate ‘value of a statistical life’, the simulations provide useful anchoring points at a time when governments are contemplating reopening air routes, as well as in the face of a potential second wave of infections.

Simon Burgess, 16 June 2020

As policy attention in countries around Europe shifts to mitigating the longer-run impacts of the COVID-19 pandemic, a central concern will be to prevent this one-off event from permanently blighting the life chances of the millions of children who missed weeks of school due to the lockdown. Focusing on the UK, this column suggests a way to repair some of the educational damage using small group tutoring, a method with widely proven effectiveness, at a modest cost, and on a rapid but feasible timescale.

Thomas Plümper, Eric Neumayer, 11 June 2020

Is Covid-19 a ‘rich man’s disease’, as many citizens in poorer countries believe it to be? This column descibes how in Germany, infections began with individuals returning from skiing holidays. In the first phase of the pandemic, infection rates were higher in richer areas and lower in more socially deprived districts. In the second phase, the ability to socially distance oneself mattered more – an ability that is itself socioeconomically stratified. Richer districts are now seeing fewer new infections, and the initial safety advantage of more socially deprived districts has disappeared.

Annie Tubadji, Don Webber, Frederic Boy, 10 June 2020

The general public’s mental health can be affected by different public policy responses to a pandemic threat. Italy, the UK and Sweden implemented distinct approaches to the COVID-19 pandemic: early lockdown, delayed lockdown, and no lockdown. This column presents a novel culture-based Development approach using narrative economics of language and Google trend data. It is evident that countries had a pre-existing culturally relative dispositions towards death-related anxiety and their sensitivity to COVID-19 public policy was country-specific. Further, one country’s lockdown policy can affect another country’s mental health, suggesting that policymakers should account for this spillover effect.

Anton Pichler, Marco Pangallo, R. Maria del Rio-Chanona, François Lafond, J. Doyne Farmer, 07 June 2020

Many governments are slowly unwinding their economies from nationwide lockdowns. However, re-opening the economy entails a serious trade-off between fostering economic output and keeping the spread of infection low. This column reports several re-opening scenarios for the UK economy, documenting their projected impacts on both GDP and the spread of the virus. The results suggest that it is best to re-open upstream industries first, as they provide a large direct and indirect economic boost at a relatively lower cost in terms of further epidemic spreading.

Shaun P. Hargreaves Heap, Christel Koop, Konstantinos Matakos, Asli Unan, Nina Weber, 06 June 2020

The behavioural interventions to control the spread of COVID-19 present trade-offs between health and wealth. To be successful, an understanding of how the public currently values lives over economic loss is needed. A survey experiment in the US and UK finds that people highly prioritise saving lives, but this valuation will change as economic losses mount. Individual differences in valuation also predict individual compliance with COVID-19 policies, and information on COVID-19 deaths and income losses can affect valuations. Caution in relaxing the lockdown will help build public support and mitigate polarising effects and, through increasing compliance, improve its economic efficacy.

Andrew Oswald, Nattavudh Powdthavee, 06 June 2020

Reopening universities for the autumn term will be risky for individuals' health and safety. This column describes the latest epidemiological evidence and argues that the biggest influence on individuals’ risk of severe illness is age. Individuals in their sixties face a 30 times higher fatality risk from COVID-19 than individuals in their thirties. Being obese, non-white, a man, and having an underlying health condition also matter – each roughly doubles the fatality risk.  But chronological age still remains the biggest risk – a fact that universities should keep in mind when planning their autumnal schedules.

Jennifer Castle, David Hendry, 04 June 2020

The UK’s 2008 Climate Change Act has led to a 34% fall in CO2 emissions by 2019, while real GDP per capita had risen by more than 10% following the crash into the ‘Great Recession’. Can the UK achieve its recent net-zero emissions target by 2050 while still growing? This column describes some speculative routes to such a decarbonised future.

Peter Dolton, 31 May 2020

The COVID-19 pandemic is causing serious financial problems for UK universities. This column identifies the over-reliance on Chinese students for fee income as the main cause of the impact and considers what steps the government might take to support universities through this crisis.

Cara Pacitti, Richard Hughes, Jack Leslie, Charlie McCurdy, James Smith, Daniel Tomlinson, 12 May 2020

With experts warning that social distancing measures could remain in place for much of this year in the UK, the fiscal pressures faced by the government could well be much more severe than recent official forecasts suggest. Drawing on three scenarios for the economic impact of social distancing lasting for 3, 6 or 12 months, this column looks at the impact on the UK public finances. It suggests that borrowing will rise to historic highs in all three scenarios. This poses liquidity challenges for the government in the near term, and leaves the government more vulnerable to changes in interest rates or inflation in the medium term given far higher debt stocks.

Jack Leslie, Richard Hughes, Charlie McCurdy, Cara Pacitti, James Smith, Daniel Tomlinson, 11 May 2020

The scale of the economic impact of coronavirus is only starting to become clear, but effective government policy responses depend on realistic estimates of the depth and length of the recession. Drawing on theory, experience from past viral outbreaks, and real-time data, this column presents three scenarios for the UK economy over the next five years. Economic outcomes could easily be worse than many current forecasts. Crucially, the duration and strictness of social distancing restrictions will define the total loss in output during the crisis and influence the likely pace of recovery post-crisis.

Dimitris K. Chronopoulos, Marcel Lukas, John O.S. Wilson, 06 May 2020

Since the first COVID-19 cases were reported in January 2020, the UK government has introduced successive public health measures, culminating in late March 2020 with enforced closures of non-essential businesses and social distancing. These measures are significantly affecting UK household incomes and expenditures. This column exploits a large anonymised transaction-level dataset covering Great Britain to examine real-time consumer spending responses to the COVID-19 pandemic and related public policy measures. While there are differences by age, gender, and income level, overall consumer spending declined as the government lockdown becames imminent and has continued to decline since.

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