New research from the Centre for Economic Performance

Several recent papers from the Centre for Economic Performance at the London School of Economics are relevant to the Citizen’s Basic Income debate.

Childhood Circumstances and Young Adult Outcomes: The Role of Mothers’ Financial Problems, by Andrew E. Clark, Conchita D’Ambrosio and Marta Barazzetta

We here consider the cognitive and non-cognitive consequences on young adults of growing up with a mother who reported experiencing major financial problems. We use UK data from the Avon Longitudinal Study of Parents and Children to show that early childhood financial problems are associated with worse adolescent cognitive and non-cognitive outcomes, controlling for both income and a set of standard variables, and in value added models controlling for children’s earlier age-5 outcomes. The estimated effect of financial problems is almost always larger in size than that of income. Around one-quarter to one-half of the effect of financial problems on the non-cognitive outcomes seems to transit through mother’s mental health.


Willing to Pay for Security: A Discrete Choice Experiment to Analyse Labour Supply Preferences, by Nikhil Datta

… The results are indicative that the majority of the population prefer characteristics associated with traditional employee-employer relationships, and this preference holds even when analysing just the sub-sample of those in atypical work arrangements. Additionally, preferences across the UK and US are very similar, despite differences in labour market regulations. Rather than suggesting that labour supply preferences have contributed to the increase in atypical work arrangements, I find that the changing nature of work is likely to have significant negative welfare implications for many workers.


Individual Consequences of Occupational Decline, by Per-Anders Edin, Tiernan Evans, Georg Graetz, Sofia Hernnäs, and Guy Michaels

… We find that, compared to similar workers, those facing occupational decline lost about 2-5 percent of mean cumulative earnings from 1986-2013. But workers at the bottom of their occupations’ initial earnings distributions suffered considerably larger losses. These earnings losses are partly accounted for by reduced employment, and increased unemployment and retraining.


Between Communism and Capitalism: Long-Term Inequality in Poland, 1892-2015, by Pawel Bukowski and Filip Novokmet

The rise of inequality after the return to capitalism in the early 1990s was induced both by the rise of top labour and capital incomes. We attribute this to labour market liberalisation and privatisation. However, the strong rise in inequality in the 2000s was driven solely by the increase in top capital incomes, which is likely related to current globalization forces. Yet overall, the unique Polish inequality history speaks about the central role of policies and institutions in shaping inequality in the long run.