Tackling structural inequality should sit at the heart of boosting living standards

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Tackling inequality is a long game, particularly when faced with deeply embedded structural inequalities. For instance, it’s welcome to see the gender pay gap almost disappearing for those aged under 40 – with shifting workplace attitudes likely heavily contributing to a reduction in gender-based pay inequality. But the gap re-emerges at older ages. The fact … Continued

Seeking public value

The case for balance sheet targeting in fiscal policy

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The traditional measures of government financial performance in the UK, public sector net borrowing and debt, do not fully capture the way in which people think about, talk about, and make fiscal policy today. With the government’s current fiscal rules set to expire next year, this paper makes the case for government’s next fiscal framework … Continued

Dealing with ‘no deal’

The economic policy response to a ‘no deal’ Brexit

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This report provides a framework for understanding what role macroeconomic policy can play in alleviating the economic impact of a ‘no deal’ Brexit. It provides an estimate of the impact on government finances, and includes an illustrative stimulus package designed to maximise the support from fiscal policy to the economy. A ‘no deal’ Brexit would … Continued

Wealth & assets
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Tax
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Political parties and elections

The huge Brexit Party tax cut for rich remain areas

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There are bad ideas, really bad ideas – and then there’s abolishing inheritance tax. This is the new top priority announced by the Brexit Party – one of only two policies beyond Brexit. The proposal would amount to an expensive giveaway to a tiny number of very wealthy households, largely living in the richest parts … Continued

Recession ready?

Assessing the UK’s macroeconomic framework

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This report is the launch paper for the Resolution Foundation’s Macroeconomic Policy Unit. It provides the most comprehensive assessment of the UK’s macroeconomic policy framework since the financial crisis, focusing on the ability of the framework to provide effective support to the economy in the face of the next recession. This work is important, given … Continued

Quantitative (displ)easing?

Does QE work and how should it be used next time?

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After the financial crisis, central banks purchased massive amounts of long-term bonds to stimulate economies. These purchases have come to be known as quantitative easing (QE) and have been hugely controversial – barely a third (37 per cent) of UK Members of Parliament, when polled, support its use in future. In theory, QE stimulates the … Continued

Rounding up

Putting the 2019 Spending Round into context

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In his September 2019 Spending Round the Chancellor rightly declared he was “turning the page” on austerity and “writing a new chapter in our public services”. But he has also ripped up his own fiscal rulebook, almost certainly breaking the fiscal ‘mandate’ in the near-term and casting significant doubt over his ability to keep debt falling as a share of GDP over the coming years.

Breaking the rules

Analysing the credibility of the Chancellor’s commitment to keep to his fiscal rules

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The Chancellor is shortly to deliver the first spending round (SR) of the post-austerity era. Although he is only setting departmental budgets for 2020-21, this event will mark a turning point  in our political and economic debates as it brings to an end almost 10 years of austerity. The politics of this SR are relatively … Continued

Follow the money

Exploring the link between UK growth and workers’ pay packets

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This briefing note unpicks the relationship between productivity and pay growth, looking at a variety of factors that influence pay growth for different groups of employees in the UK – from trends in the labour share to terms of trade movements, and from the role of employer pension contributions to the impact of changes in working patterns.

Mapping millennials’ living standards

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Intergenerational progress – the idea that each successive cohort should have higher living standards than predecessors at the same age – has slowed down markedly for today’s young adults. This puts their experience in stark contrast to the rapid cohort-on-cohort improvements in standards of living up until those born in the 1970s. Because many people … Continued

Trading up or trading off?

Understanding recent changes to England’s apprenticeships system

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In 2017 there was overhaul to the apprenticeships system in England: large firms were required to pay 0.5 per cent of their wage bill into an apprenticeship levy, while regulations on training and delivery were firmed up. Two years on, this briefing note takes stock of the system, looking at what’s changed, why and where … Continued

A problem shared?

What can we learn from past recessions about the impact of the next across the income distribution?

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While the received wisdom from the 1980s and 1990s recessions was that those at the bottom of the income distribution suffer most during severe downturns. But this was less obvious in the aftermath of the financial crisis. So this briefing note looks at what lessons we can learn from that episode about the distributional impact … Continued

Taking stock

Report for the Scottish Poverty and Inequality Commission

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There has been a growing appreciation in recent years that living standards are determined not just by income (the flow of money into a household) but also by wealth (the stock of assets a household owns). Wealth can take various forms: it can be held in financial instruments (for example, a savings account or as … Continued

Failing to plan = planning to fail

The risk of recessions and the importance of macroeconomic policy in limiting the damage they cause

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There is a relatively high risk that the UK will experience a recession in the next few years, bringing with it significant and lasting damage. Macroeconomic policy will once again need to play its part in mitigating this damage. But the legacy of the financial crisis looks likely to limit its power, making it all the more important to open up the debate about what is possible.

Mapping gaps

Geographic inequality in productivity and living standards

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Regional inequality is a hot topic, particularly since the EU referendum exposed huge voting divides between London, Scotland and Northern Ireland, and the rest of the UK. This report examines the relative economic performance of UK regions and nations since the 1960s, and the extent to which this has driven differences in household living standards.

Moving matters

Housing costs and labour market mobility

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Moving matters for living standards. Taking a new job in a different firm has a larger pay uplift
than simply being promoted , and moving to a more
productive area comes with an even bigger pay premium. In this note we look at why young people are moving jobs and homes less than in the past, and explore the extent to which diverging housing costs lies behind this trend.

Labour market
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Low pay
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Pay
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Minimum wage
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Living Wage

Low Pay Britain 2019

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This is our ninth annual report on low pay. This edition focuses on the minimum wage, which recently turned 20. It analyses the extent to which the minimum wage has reduced the proportion of the working-age population in low pay. It also looks to the future, asking how fast the minimum wage can boost wages for the lowest earners while managing the inevitable risks to employment.

Growing Pains: the impact of leaving education during a recession on earnings and employment

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This report looks at the fortunes of the “crisis cohort”: those who left education between 2008 and 2011. By analysing outcomes for those unfortunate enough to enter the labour market in the aftermath of the 2008-09 recession, this paper estimates how severe an impact the downturn had on people who left education in its midst, and how long-lasting these effects were.

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