Observing, understanding and improving society – for everyone

Top of the Charts

Afternoon all,

One of the surprising outcomes of two months of lockdown is how tiring its physical and emotional impact has been. And along with the responses of anger and activism, it’s hard not to feel drained too in the face of truly awful scenes from the United States – scenes that leave many waking up to daily reminders of how far short the 21st Century is falling below the hopes and dreams they rightly held. We may all be born equal but racism, discrimination and entrenched disadvantage mean we are unable to live equally.

While this debate centres on the US, the UK has its own share of issues. On the policing side of things we are no experts, but do read the Runneymede Trust’s work. David Lammy’s 2017 government review also highlighted that Black people make up 3 per cent of the general population, but 12 per cent of adults in prison. In our own area of focus, living standards, Chart of the Week sets out that we have much more progress to make as a society.

I’m also very conscious that organisations like our own have much further to go. Black people are hugely under-represented at all levels of the economic profession – which is why we have put in place a BAME Trainee Programme. Please do encourage anyone who might benefit from it to apply.

Have a good weekend,

Chief Executive
Resolution Foundation

Opportunity not knocking. When it came to opportunity for upward mobility the US used to be a country of two halves for African Americans – with much more progress seen for those in Northern and Western states. But that gap has now closed. Why? An interesting recent paper from Ellora Derenoncourt of Princeton (who is worth a follow on twitter) argues that it in part reflects the response that took place to the Great Migration of four million African Americans from the south to the north between 1940 and 1970. That response saw persistent segregation and higher police spending. These changes hugely reduced the benefits of growing up in Northern and Western states for those whose parents moved there in part to gain opportunities for their children that were absent in the South.

Better policing. What would actually work to improve policing, and specifically reduce some of the disparities in experience of policing and the criminal justice system? That’s the question asked by Jennifer Doleac in this Twitter thread which offers those of us not working on the economics of policing an incredibly useful summary of what we do (and don’t) know. One interesting example is this 2019 paper that finds court-ordered measures to increase diversity within police departments helped reduce the racial disparities in who are victims of crime. Crucially, this was not because more diverse police forces led to more reporting of crime, but because it increased police responsiveness to that reporting.

Acting local. Amid the focus on the US, the danger is we conclude there are no lessons for our own policing in the UK. As Rick Muir notes in a reflective blog, the fact that 2016 saw 1,011 people killed in police shootings in the US, compared to four in England and Wales, does mean the situations are different. However, the reality that this April 9.3 black people were stopped and searched per 1,000, compared to 2.3 white people, means complacency is a dangerous place to start…

Observing economics. This week marks the launch of the Economic Observatory – a valuable new initiative to bring together the economic research community to answer questions from policy-makers and the public about the economics of the Covid-19 crisis and the recovery. There is a LOT of material up there so if you’ve got a question, check it out. They might even have the answer.

Understanding society… is a good life goal for all of us. But it’s also the name of a very valuable dataset that allows us to track the lives of thousands of individuals over time. We use it a huge amount at Resolution, so are very glad that the people behind it have been busy collecting more data in the middle of this coronavirus crisis. This is crucial given the speed of what’s happening. You can get a flavour of how useful this will be with this speedily produced paper, bringing together some key lessons from that data. Key takeaways: there is big variation in both the impact of the economic shock (those with less education and precarious employment are hit hardest) and in different groups’ abilities to mitigate those impacts. While social security helps many poorer households manage those shocks, most mitigation comes in the form of self-insurance via savings and borrowing. The biggest challenges to date have been groups hard hit but less able to mitigate those impacts, in particular single parents and ethnic minorities. We’ll have a new report digging into these issues this coming Tuesday.

Chart of the Week

On living standards, how has the UK done in closing racial disparities? First, the good news: income gaps have been closing for most ethnic groups (albeit with very large gaps still remaining especially for Pakistani and Bangladeshi households). This reflects progress on educational outcomes, employment and pay. But, and it’s a big but, this week’s chart shows that the income gap between the Black African and white population in the UK has barely moved since 2002. The gap between the Black Caribbean and white populations has actually grown. Part of the explanation lies in the labour market where we know black people were much more likely to suffer job losses in the financial crisis: black men saw the deepest employment fall of around 7 percentage points. We also know that once we take into account personal- and job-related factors like region, qualifications and occupation, Black male graduates face the biggest pay penalty of 15-19 per cent compared to white men with the same jobs/qualifications. On housing we’re all well aware that BAME households face more overcrowding, something that matters a great deal amid this pandemic. But while this has fallen among most ethnic groups over the past decade, it has grown for black families. Taken together, this paints a picture of the lasting impacts of racism, discrimination and disadvantage. Donald Trump has the responsibility for reducing rather than inciting tensions in the US. But we’ve all got a role to play in addressing these stark challenges on this side of the Atlantic.