Latest CASE Papers

Efficiency in Repeated Two-Action GameswithLocal Monitoring

Francesco Nava, Michele Piccione

TE/2012/560. September 2011.
The paper discusses community enforcement in infinitely repeated two-action games withlocal monitoring. Each player interacts with and observes only a fixed set of partners, ofwhom he is privately informed. The main result shows that for generic beliefs efficiencycan be sustained in a sequential equilibrium in which strategies are independent of theplayers’ beliefs about the monitoring structure. Stronger results are obtained whenplayers are arbitrarily patient and payoffs are evaluated according to Banach-Mazurlimits, and when players are impatient and only acyclic monitoring structures areallowed.Íƒ

Full article: http://sticerd.lse.ac.uk/dps/te/te560.pdf

The Impact of School Context: What headteachers say

Ruth Lupton, Martin Thrupp

CASE/158. December 2011.
This paper reports the accounts of fifteen headteachers of primary schools in one local authority in the South East of England, including headteachers of schools that are amongst the most advantaged five per cent of schools in England and those amongst the most disadvantaged twenty per cent. The headteachers reflect on the nature of the intakes and other local contextual factors, and their impact on day to day school processes and on decisions made about organization, curriculum and pedagogy. The findings give an insight into the extent of variation between schools and their capacity to respond to differing needs given budgetary constraints, performative pressures and the limits of professional knowledge.

Full article: http://sticerd.lse.ac.uk/dps/case/cp/CASEpaper158.pdf

Pathways and penalties: Mothers’ employment trajectories and wage growth in the Families and Children Study

Francesca Bastagli, Kitty Stewart

CASE/157. December 2011.
This paper uses panel data from the British Families and Children Study to analyse the employment patterns of women with children and the ways in which part-time work and interruptions in paid employment influence the wages of working mothers. It pays particular attention to how the relationship between employment trajectory and wage progression compares for higher-skilled and lower-skilled mothers and for mothers of younger and older children. We find that mothers follow a wide variety of employment pathways, the majority working part-time, moving between full-time and part-time employment or moving in and out of work as they combine motherhood with paid employment. In support of results from existing research on the “part-time” wage penalty and the “motherhood gap”, we find that there are wage penalties associated with unstable work trajectories. Our analysis also shows that such wage penalties are significantly smaller for lower-skilled than higher-skilled women and are experienced by mothers of children of all ages, although the impact appears larger for mothers of younger children. In the final sections, the paper discusses the policy implications that arise from these findings with reference to recent debates on maternal employment, wage progression and poverty reduction.

Full article: http://sticerd.lse.ac.uk/dps/case/cp/CASEpaper157.pdf

Right to the city and critical reflections on property rights activism in China’s urban renewal contexts

Hyun Bang Shin

CASE/156. December 2011.
The rapid transformation of urban socio-spatial landscape in China has resulted in an increasing degree of frustration and discontent among local residents who face threats of demolition and eviction. This has given rise to sporadic protests by local residents who are often known as ‘nail households’, that is, persistent protesters who are fixed to the land and hold onto their dwellings in protest against unwilling eviction and demolition of their dwellings. The presence of these protesters provides an effective example of local residents’ out cry in China. This paper is an attempt to critically re-visit the existing debates on local residents’ property rights activism in urban redevelopment processes, and to discuss the extent to which it can be an effective strategy. The paper refers to the right-to-the-city debate to examine whose right counts in China’s urban renewal contexts. It also makes use of empirical findings, both quantitative and qualitative, to examine how nail houses are received among local residents and migrants, and discusses the extent to which migrants can fit into local residents’ struggle against the top-down imposition of neighbourhood transformation. The paper ultimately calls for the need to form a place-based alliance that enables urbanites including migrants to come together to launch an effective claim on their right to the city.

Full article: http://sticerd.lse.ac.uk/dps/case/cp/CASEpaper156.pdf

The Shifting Balance of Private and Public Welfare Activity in the United Kingdom, 1979 to 2007

Daniel Edmiston

CASE/155. December 2011.
The balance between private and public sectors in welfare activity in the UK has been documented by Burchardt (1997) and Smithies (2005) for three time periods; 1979/1980, 1995/1996 and 1999/2000. The existing evidence suggested that a welfare mix has previously been in existence but that the balance had been shifting. This paper explores this phenomenon by updating the existing evidence with a snapshot of the welfare mix in 2007/2008 across five different welfare sectors: Education, Health, Housing, Income Maintenance and Social Security and Personal Social Services. The paper systematically explores who finances, controls and delivers services in each of these five welfare sectors. Over the 29 year period, there has been a gradual increase in the proportion of welfare activity that is privately financed, controlled and delivered, and a gradual decrease in the proportion of welfare activity that is publicly financed, controlled and delivered. The most significant change is the proportion of services that are contracted-out, and the majority of this change generally occurred prior to 1995/96; since then changes have been much more slight and nuanced. Interestingly, the most significant growth in total welfare activity as a proportion of GDP occurred between 1979 and 1996, and Pure Private activity only accounted for part of this.

Full article: http://sticerd.lse.ac.uk/dps/case/cp/CASEpaper155.pdf

Towards the ‘Big Society’: What role for neighbourhood working? Evidence from a comparative European study

Catherine Durose, Jonathan France, Ruth Lupton, Liz Richardson

CASE/154. October 2011.
Under the New Labour government, the neighbourhood emerged prominently as a site for policy interventions and as a space for civic activity, resulting in the widespread establishment of neighbourhood-level structures for decision-making and service delivery. The future existence and utility of these arrangements is now unclear under the Coalition government’s Big Society proposals and fiscal austerity measures. On the one hand, sub-local governance structures might be seen as promoting central-to-local and local-to-community devolution of decision-making. On the other, they might be seen as layers of expensive bureaucracy standing in the way of bottom-up community action. Arguably the current value and future role of these structures in facilitating the Big Society will depend on how they are constituted and with what purpose. There are many local variations. In this paper we look at three case studies, in England, France and the Netherlands, to learn how different approaches to neighbourhood working have facilitated and constrained civic participation and action. Drawing on the work of Lowndes and Sullivan (2008) we show how the achievement of civic objectives can be hampered in structures set up primarily to achieve social, economic and political goals, partly because of (remediable) flaws in civic engagement but partly because of the inherent tensions between these objectives in relation to issues of spatial scale and the constitution and function of neighbourhood structures. The purpose of neighbourhood structures needs to be clearly thought through. We also note a distinction between ‘invited’ and ‘popular’ spaces for citizen involvement, the latter being created by citizens themselves. ‘Invited’ spaces have tended to dominate to date, and the Coalition’s agenda suggests a fundamental shift to ‘popular’ spaces. However we conclude that the Big Society will require neighbourhood working to be both invited and popular. Citizen participation cannot always replace local government – sometimes it requires its support and stimulation. The challenge for local authorities is to reconstitute ‘invited’ spaces (not to abolish them) and at the same time to facilitate ‘popular’ spaces for neighbourhood working.

Full article: http://sticerd.lse.ac.uk/dps/case/cp/CASEpaper154.pdf

Social Housing and Social Exclusion 2000-2011

Rebecca Tunstall

CASE/153. July 2011.
By some definitions, social housing, social housing tenants are necessarily socially excluded. In other terms, in 2000, social housing tenants were at greater risk of being socially excluded than owner occupiers and private renters on measures of income, employment, education, health, and housing and neighbourhood quality. However, by 2011, basic housing quality in social housing had overtaken that in home ownership, and slight reductions in social exclusion of social tenants in terms of income, employment, and neighbourhood quality at least disproved arguments of inevitable tenurial polarisation. There is evidence that housing and regeneration policies contributed to these changes, but the economy was also important, and population turnover is likely to have played a role. Finally, the gains of 2000-2011 may not be sustained.

Full article: http://sticerd.lse.ac.uk/dps/case/cp/CASEpaper153.pdf

The distribution of total greenhouse gas emissions by households in the UK, and some implications for social policy

Saamah Abdallah, Ian Gough, Victoria Johnson, Josh Ryan-Collins, Cindy Smith

CASE/152. July 2011.
This paper maps the distribution of total direct and embodied emissions of greenhouse gases by households in the UK and goes on to analyse their main drivers. Previous research has studied the distribution of direct emissions by households, notably from domestic fuel and electricity, but this is the first to cover the indirect emissions embodied in the consumption of food, consumer goods and services, including imports. To study total emissions by British households we link an input-output model of the UK economy to the UK Expenditure and Food Survey. Results are presented as descriptive statistics followed by regression analysis. All categories of per capita emission rise with income which is the main driver. Two other variables are always significant: household composition, partly reflecting economies of scale in consumption and emissions in larger households, and employment status. This ‘standard’ model explains 35% of variation in total emissions, reflecting further variation within income groups and household types. We also compute the distribution of emissions derived from the consumption of welfare state services: here, lower income and pensioner households ‘emit’ more due to their greater use of these services. To take further account of the social implications of these findings, we first estimate emissions per £ of income. This shows a reverse slope with emissions per £ rising as one descends the income scale. The decline with income is especially acute for domestic energy, housing and food emissions, ‘necessary’ expenditures with a lower income elasticity of demand. Next, we move away from per capita emissions by assuming children under 14 emit half that of adults, which reduces disparities between household types. To implement personal carbon allowances, further research will be needed into the carbon allowances of children and single person households. Current government policies to raise carbon prices mainly in domestic energy are found to be especially regressive, but tracking total carbon consumption within a country would require radical changes in monitoring carbon flows at national borders. In the meantime, poorly targeted policies to compensate ‘fuel poor’ families should give way to more radical ‘eco-social’ policies, such as house retrofitting, coupled with ‘social’ tariffs for domestic energy.

Full article: http://sticerd.lse.ac.uk/dps/case/cp/CASEpaper152.pdf

The Magnitude and Correlates of Inter-vivos Transfers in the UK

Eleni Karagiannaki

CASE/151. June 2011.
This paper uses data from the British Household Panel Survey and the Attitudes to Inheritances Survey to estimate the magnitude of and the factors that are correlated with private inter-household transfers from parents to their adult children in the UK. Our evidence suggests that inter vivos transfers in the UK are fairly common although regular financial transfers may be less so. AIS suggests an aggregate value of all gifts received so far in people’s lifetimes of around £83 billion in 2004. This is about one tenth of the aggregate value of inheritances reported to the same survey, or about 2.3 per cent of total wealth at the time. One section of BHPS implies an annual flow of parental transfers of only around £1.1 billion, or 4 per cent of the flow of inheritances, but other parts of the same survey imply a much greater prevalence of transfers. It appears that none of the available datasets captures the whole picture. Consistently, however, the surveys suggest that financial transfers are negatively associated with age and the income of the recipient indicating that parental transfers are reach children when help is most needed, and most for those with greater needs. However, it is the parents with greater resources who are able to do this, meaning that the process tends to reinforce intergenerational links.

Full article: http://sticerd.lse.ac.uk/dps/case/cp/CASEpaper151.pdf

Inequality among the Wealthy

Frank A Cowell

CASE/150. June 2011.
Using the evidence from the Luxembourg Wealth Study it appears that the distribution of wealth in the UK is considerably less than in Canada, the US or Sweden. But does this result come from an underestimate of inequality among the wealthy and of the wealth differential between the rich and the rest? Using a Pareto model for the upper tail of the distribution we can see that the inequality of comparisons of the UK with the other countries is indeed robust.

Full article: http://sticerd.lse.ac.uk/dps/case/cp/CASEpaper150.pdf

Estimates of the asset-effect: The search for a causal effect of assets on adult health and employment outcomes

Abigail McKnight

CASE/149. June 2011.
In this paper we seek to determine the effect of assets held in early adult life on later outcomes. We specifically look at wages, employment prospects, general health and Malaise. The identification of an asset-effect throws up a number of statistical challenges as asset holding is not random. We employ a number of statistical techniques in our search for the causal effect of assets on adult health and employment outcomes. We find that simple Ordinary Least Squares and probit estimates of the asset effect are indeed biased in many cases. However, after applying a battery of techniques to remove such biases, the conclusion is that within the cohort examined (born in 1958), early asset holding does have positive effects on later wages, employment prospects, excellent general health and in reducing malaise.

Full article: http://sticerd.lse.ac.uk/dps/case/cp/CASEpaper149.pdf

The impact of inheritance on the distribution of wealth: Evidence from the UK

Eleni Karagiannaki

CASE/148. June 2011.
In this paper we examine how the distribution of wealth has been changing in UK over the period 1995 to 2005 and how the sum of inheritance received between 1996-2004 contributed to the observed trends in wealth accumulation and wealth inequality. Using data from the British Household Panel Survey we find that the period 1995-2005 was a period of substantial growth in net worth and of a substantial decrease in wealth inequality recorded in the survey. The main driver behind both trends was the rise in house prices and the resulting increase in the housing equity of middle wealth-holders. Inheritances received between 1996 and 2004 contributed about 10 to 15 per cent (depending on the capitalisation assumption) of the average household wealth accumulation that occurred during 1995-2005 and somewhere between 26 and 30 per cent of the wealth accumulation of inheriting households (and possibly more if we could account for the rate of returns on early inheritance used by some to finance house purchase). Inheritances were highly unequal and had a positive (but rather small) correlation with pre-inherited wealth. This meant that inherited wealth accounted for part of the observed inequality of net worth in 2005. However, some significant inheritors started with low initial wealth (and this was true within each age group). Inheritance in the period therefore weakened the relationship between non-inherited wealth and the final total. The net effect was therefore that inheritances in the previous decade had a mild equalizing impact on 2005 net worth inequality. However given the small magnitude of these effects and the uncertainty about the behavioural responses to inheritances, inheritance can probably best be seen as maintaining wealth inequalities rather than either narrowing or widening them.

Full article: http://sticerd.lse.ac.uk/dps/case/cp/CASEpaper148.pdf

A Wealth Tax Abandoned: The role of the UK Treasury 1974-6

Howard Glennerster

CASE/147. June 2011.
The distribution of wealth is widening in many countries and with it the importance of inherited wealth. In 1974 a Labour Government came to power in the United Kingdom committed to introducing an annual wealth tax. It left office without doing so. Using the official archives of the time and those of a key advisor this paper traces both the origins of the policy and its fate in Whitehall. It explores two related questions. What does this experience tell us about the role of the civil service in the policy process in the UK and what lessons might be learned by those wishing to tackle the issue of widening wealth disparities today?

Full article: http://sticerd.lse.ac.uk/dps/case/cp/CASEpaper147.pdf

Rrecent trends in the size and the distribution of inherited wealth in the UK

Eleni Karagiannaki

CASE/146. June 2011.
In this paper we document the evolution of the annual flow of inheritances in the UK during the period 1984-2005 and provide estimates for the overall magnitude and the distribution of inherited wealth. Our results indicate that the period under examination the annual flow of inheritance increased markedly, from £22 billion in 1984 to £56 billion in 2005. The main drivers behind this increase were the rise in house prices and to a lesser extent the increase in the proportion of inheritances which included housing assets. Our results, based on analysis of survey data, show that the distribution of inheritances is characterized by a very high degree of inequality (comparable by and large to that observed in personal wealth) and that this has increased over time. However, the inequality increasing effect from the greater inequality in the distribution of inheritance was counterbalanced by the increase in the percentage of the population who received an inheritance. Our results also show that inheritance is positively associated with socio-economic status and that the disparities between groups became slightly more pronounced over time (mainly across educational groups). However, our evidence also shows that inheritance for the majority of recipients is fairly small and that large inheritances are limited to a very small minority of the population.

Full article: http://sticerd.lse.ac.uk/dps/case/cp/CASEpaper146.pdf

Fiscal costs of climate mitigation programmes in the UK: A challenge for social policy?

Ian Gough, Sam Marden

CASE/145. June 2011.
This paper asks whether the policies and programmes enacted to reduce greenhouse gas emissions in the UK will compete with other goals of public policy, in particular social policy goals. The Climate Change Act 2008 has set the UK some of the most demanding targets in the world: to reduce GHG emissions (compared with 1990) by at least 80% by 2050 and by at least 34% by 2020 – just nine years away. A wide array of climate change mitigation policies (CCMPs) have been put in place to bring this about. Will these compete fiscally with the large public expenditures on the welfare state? We address this question by surveying and costing all UK government policies that have a climate change mitigation objective and which are expressed through taxation, government expenditures and government-mandated expenditures by energy suppliers and other businesses and which are directed toward the household sector. Our conclusion is that expenditures on CCMPs are tiny – around one quarter of one per cent of GDP - and will not rise significantly. Within this the share of direct spending by government will fall and that obligated on utility companies will rise. Green taxes are also planned to fall as a share of GDP. There is no evidence here of fiscal competition between the welfare state and the environmental state. However, the use of mandated electricity and gas markets will impose rising costs on the household sector, which will bear more heavily on lower income households and will increase ‘fuel poverty’. Thus demands on traditional social policies are likely to rise. More radical policy reforms will be needed to integrate climate change and social policy goals.

Full article: http://sticerd.lse.ac.uk/dps/case/cp/CASEpaper145.pdf

Employment trajectories and later employment outcomes for mothers in the British Household Panel Survey: An analysis by skill level

Kitty Stewart

CASE/144. May 2011.
Maternal employment formed a central plank in the former Labour Government’s strategy to reduce child poverty. Even where potential jobs were low-skilled and low-paid, policy was explicitly work (rather than training) first, and lone parents in particular were given direct and indirect financial subsidies to enter employment of any kind. The explicit assumption was that a low-paid job would be a stepping-stone to better things. From 2008 a little more stick was introduced to what had been a largely carrot-based approach to encouraging employment, a shift that has continued under the Conservative-Liberal Democrat Coalition Government in power from May 2010. However, there is little evidence in practice that a low-paid job when one’s child is young is a reliable route to improved future prospects. This paper uses the British Household Panel Survey to explore this issue further. It examines the employment trajectories of 929 women for the ten years after the birth of their youngest child, asking two main questions. Do mothers tend to remain in employment once they have taken a job? And do wages and other employment outcomes further down the line (when their youngest child is ten) reflect the employment pathway taken? In both cases the paper focuses in particular on differences between women with higher and lower levels of qualifications. The paper finds mothers following a variety of employment pathways, with instability much more common than steady work trajectories. One in three mothers moves in and out of work over the decade after the birth of their youngest child, and this is true for both lower-skilled and higher-skilled mothers. Stable work histories do appear to carry benefits in terms of wages when the youngest reaches ten, but the benefits are substantially higher for women with higher levels of qualifications, as might be predicted by human capital theory. More highly qualified women who moved in and out of work over the decade had an hourly wage at ten which was 33% lower than similar women with a stable work history; for women with few or no qualifications the corresponding figure was 14%. Levels of occupational progression as measured by change in NS-SEC status over the decade were encouraging, but for both higher and lower skilled women job satisfaction when the youngest is ten appears unrelated to the pathway taken.

Full article: http://sticerd.lse.ac.uk/dps/case/cp/CASEpaper144.pdf

Growing Up in Social Housing in the New Millennium: Housing, Neighbourhoods, and Early Outcomes for Children Born in 2000

Andrew Jenkins, Dylan Kneale, Ruth Lupton, Rebecca Tunstall

CASE/143. February 2011.
This study draws on the Millennium Cohort Study to explore the housing and neighbourhood circumstances of children born in England in 2000 at the age of 5 in 2006. The majority of children experienced good housing conditions. Those in social rented homes, and to a lesser extent in private rented homes too, were markedly disadvantaged in terms of family circumstances and neighbourhood deprivation, while housing conditions and other neighbourhood characteristics also varied somewhat between tenures. Links were found between children’s housing tenure and test scores. These were largely explained by a combination of family characteristics and neighbourhood deprivation.

Full article: http://sticerd.lse.ac.uk/dps/case/cp/CASEpaper143Tunstall.pdf