The consequences of ignoring the evidence [updated]

[this post was updated at 9pm on 29/6/2012 to respond to Sam Freedman (DFE)]


In justifying the decision to abolish the Educational Maintenance Allowance (EMA), the government argued repeatedly that the decision was justified by the evidence; in particular, that  EMA was ineffective in increasing educational participation among young people. For example, the Minister for Further Education, in November 2010, said: 

"we have focused on the evaluation evidence and other research which indicates that EMA does not effectively target those young people who need financial support to enable them to participate in learning.  It will be replaced by a scheme that does."

A manifesto for economic sense

The Manifesto for Economic Sense, authored by Paul Krugman and Richard Layard, has now been signed by a number of distinguished economists, including (but not limited to) the following:  


Alan Manning - London School of Economics
Andrew Graham - Oxford University
Charles Wyplosz - The Graduate Institute, Geneva
Chris Pissarides - London School of Economics and Political Science
Christopher Allsopp - Director, Oxford Insitute for Energy Studies, Oxford
Colin Thain - University of Birmingham, UK
David Blanchflower - Dartmouth College
David Soskice - University of Oxford
Eric van Wincoop - University of Virginia
Gary Mongiovi - St Johns University, New York
Geoffrey M. Hodgson - Professor, University of Hertfordshire, UKJ. 
Bradford DeLong - U.C. Berkeley
Jeffrey Frankel - Harvard University
Jeremy Hardie - LSE Centre for Philosophy of Natural and Social Science
John Van Reenen - Centre for Economic Performance, LSE
Justin Wolfers - Princeton University
Olaf Storbeck - Handelsblatt - Germanys Business and Financial Daily
Oriana Bandiera - London School of Economics
P.E.Hart - Emeritus Professor of Economics,University of Reading
Paul Anand - Open University/ HERC Oxford University
Paul Gregg - Professor, Dept of Social and Policy Sciences, University of Bath
Paul Krugman - Princeton University
Peter E. Earl - University of Queensland
Peter J. Hammond - University of Warwick
Philip Arestis - University of Cambridge
Philippe Martin - sciences po (paris)
Raquel Fernandez - NYU
Richard Jackman - London School of Economics
Richard Layard - LSE Centre for Economic Performance
Rick van der Ploeg - University of Oxford
Robert A. Feldman - IMF and Adjunct Professor Georgetown U. (retired)
Robert Skidelsky - Wawick University
Simon Wren-Lewis - Oxford University
Wendy Carlin - UCL
William Brown - University of Cambridge

Macroeconomics: what is it good for? [a response to Diane Coyle]

Diane Coyle is not just one of the UK's most eminent "public intellectuals", but also simply one of the most impressive people I know; how she manages to run her own economic consultancy, serve as Vice-Chair of the BBC Trust and as a member of the Migration Advisory Committee, write a book every year or two and tweet constantly is completely beyond me.  So I take it very seriously indeed when she disagrees with me, as she did (semi-) publicly in this blog last week.  I promised a response, and here it is. [Warning: longish,  and occasionally nerdy.]

Why Ed Miliband shouldn't apologise for making the right decision on Eastern European migration

[This is slightly updated version of an article that appeared first last September in the Independent here. For a discussion of some other immigration related issues, see here (on immigration and labour markets more broadly), here (immigrants and schools) and here (immigrants, public services and benefits)]

It appears to have become conventional wisdom in the Westminster village that the previous Labour government was wrong to give immediate access to the UK labour market to citizens of the new Member States of East and Central Europe that joined in 2004. The argument is that the decision was based on flawed analysis, in particular misleading forecasts of the numbers who were likely to come; and that influx of new workers from those countries damaged the employment prospects of British workers, especially the young and low-skilled.

After two wasted years, the G20 pivots back towards fiscal sanity

The G-20 has come (almost)  full circle.  In April 2009 in London, the communique set out leaders' commitment to a massive coordinated fiscal stimulus:

We are undertaking an unprecedented and concerted fiscal expansion, which will save or create millions of jobs which would otherwise have been destroyed, and that will, by the end of next year, amount to $5 trillion, raise output by 4 per cent, and accelerate the transition to a green economy. We are committed to deliver the scale of sustained fiscal effort necessary to restore growth.

While the degree of coordination was somewhat exaggerated,  there was a genuine collective determination to do what was necessary to ensure the financial crisis did not become a prolonged depression.

The Chancellor accepts the logic of more government-financed investment

My thoughts on the bank lending measures announced by the Chancellor and Governor yesterday are well reflected here.   But I wanted to focus on one particular part of the Chancellor's Mansion House speech that has got less attention.  The Chancellor argued:

"Credit is not the only area where we can use the global confidence in our balance sheet to boost private sector growth.  We are already taking action to support new house-building and infrastructure investment through government guarantees.  In the next month we will set out how we can do much more."

DWP analysis shows mandatory work activity is largely ineffective. Government is therefore extending it..

The Department for Work and Pensions today published an impact assessment of the Mandatory Work Activity (MWA) programme.  The analysis compares participants on the programme with "comparable" (as determined by sophisticated statistical techniques) non-participants.  Briefly, what the analysis shows is that the programme as currently structured is not working. It has no impact on employment; it leads to a small and transitory reduction in benefit receipt; and worst of all, it may even lead to those on the programme moving from Jobseekers' Allowance to Employment and Support Allowance.