Results

CEP discussion paper

Universities, new tasks, and the rise of services

Structural transformation from manufacturing to services varies sharply across US regions. We document that regions with universities, especially highly ranked research institutions, experience faster growth in high-skil...Read more...

CEP discussion paper

Input uncertainty and firm performance: evidence from critical minerals

We study the effect of input uncertainty about critical minerals on firm performance, separating the second-moment risk channel from first-moment mineral sentiment and from general firm-level uncertainty. Using earnings-...Read more...

Blog

VoxEU:

China's accession to the WTO increased pollution via coal powerplants, not exporters or their suppliers and consumers

As countries consider trade deals to foster development, the question of how trade impacts pollution keeps resurfacing. This column examines how China's rapid entry into world markets in the early 2000s affected pollutio...Read more...

CentrePiece article

Informing industrial strategy for clean technologies

Spillovers from innovation can boost regional growth...Read more...

Blog

Unibo Magazine :

Declining forests and rising greenhouse gases: the impact of multinationals in Africa

The expansion of multinationals in Africa is making a significant contribution to the loss of forest cover, the reduction of crop diversity and, in part, the rise in greenhouse gas emissions. These are the findings of a ...Read more...

CEP discussion paper

Returns to green tasks in Europe: evidence from online job vacancies

There is growing evidence that green jobs have higher skill requirements, but whether they offer sufficient wage incentives to encourage workers to acquire those skills remains unclear. We study the green wage premium an...Read more...

CEP discussion paper

Gender equality and innovation: evidence from UK companies

We investigate the effect of intra-firm gender disparities on innovation using a unique longitudinal dataset of UK companies from 1996 to 2019. Utilising within-industry and within-firm variation, as well as an instrumen...Read more...

CEP report

Catalysing climate resilience

The UK is experiencing increasing impacts from climate change, including more frequent and severe floods, heatwaves and storms. It needs to prepare more for these impacts. It also needs to honour its pledge to support cl...Read more...

Journal article

Journal of Health Economics:

The value of a park in crises: quantifying the health and wellbeing benefits of green spaces using exogenous variations in use values

Most people consider parks important for their quality of life, yet systematic causal evidence is missing. We exploit exogenous variations in their use values to estimate causal effects. Using a representative household ...Read more...

Blog

OECD blog:

While governments brace for another energy crisis, firms are leaving major energy savings on the table

New OECD research finds that some firms use 20 times more energy than their peers producing the same output. Reducing the gap could cut industrial energy use by more than half using technologies that already exist. This ...Read more...

Blog

VoxEU:

Ray of hope? The rise of solar energy in China

China's solar industry is a poster child for the countrya??s economic rise over the last four decades. The output of Chinese solar grew by 76% annually between 2004 and 2013, and by 2019 Chinese firms accounted for 63% o...Read more...

Journal article

Journal of Urban Regeneration and Renewal:

Green belts and the inefficient allocation of land

Land is an economic resource, so the efficiency with which it is used is essentially an economic problem. This paper, therefore, approaches the issue from an economic perspective. Having surveyed the economic definitions...Read more...

CentrePiece article

Cleaner energy, higher risk?

Why critical materials are central to global strategic partnerships...Read more...

CEP report

Pathways to a productive and inclusive net zero

The transition to net zero can bring economic benefits - improving productivity and living standards while tackling climate change and this collection of briefing papers shows how. Pathways to productive and inclusive ne...Read more...

Journal article

Journal of Human Resources:

Workplace presenteeism, job substitutability, and gender inequality

This paper explores how the parenthood wage penalty is partially explained by an increased within-couple gap in job uniqueness (i.e., the within-establishment substitutability of workers). Uniqueness is rewarded with hig...Read more...

CEP discussion paper

When do employers share? Rent sharing, monopsony and minimum wages

When firm productivity or product demand rises, workers typically share in the gains through higher wages or expanded employment. We show that for firms under monopsony with a binding minimum wage, this link from firm ga...Read more...

CEP discussion paper

Cleaner energy, higher risk? Firm-level exposure to critical minerals

To what extent has the rise of clean energy technologies created new vulnerabilities in global supply chains? In this paper, I study the role of a new type of 'input uncertainty' associated with critical minerals that un...Read more...

Blog

LSE USAPP:

The US-China rare earths deal shows the importance of critical materials in a new era of strategic interdependence

The accelerating shift to clean energy and advanced technologies is redrawing the map of global economic power. As nations and firms race to secure critical minerals, rare earths - small in trade value but high in strate...Read more...

CentrePiece article

The value of green spaces

Using wellbeing data to assess benefits for residents....Read more...

CentrePiece article

Putting a value on safety

What the pandemic reveals about the risks that people are willing to take at work....Read more...

Journal article

The Economic Journal:

Non-compete agreements, wages and efficiency: theory and evidence from Brazilian football

The Pele Act banned non-compete agreements in Brazilian football in 1998. We explore this policy change to study how non-competes affect the labour market. The Act changed the wage profile heterogeneously, reducing young...Read more...

Journal article

American Economic Review:

Monopsony and employer misoptimization explain why wages bunch at round numbers

We show that administrative hourly wage data exhibit considerable bunching at round numbers. We run two experiments randomizing wages around $0.10 and $1.00 to experimentally measure left-digit bias for identical tasks o...Read more...

External report

Innovation in Green Technologies

Demand for cleaner, more efficient technologies is transforming global markets and with it, the geography of innovation. Over the last 15 years, markets for new energy technologies and climate resilience have outpaced gr...Read more...

Blog

LSE Business Review:

People value workplace safety more than traditionally believed

Some workplaces are inherently more dangerous than others, but during the pandemic almost all workplaces became risky. Massimo Anelli and Felix Koenig investigated whether workers during COVID chose to forgo earnings to ...Read more...

CEP report

The innovation race on geological carbon removal: who is best placed to lead?

This report analyses innovation activity represented by patenting data for two carbon dioxide removal (CDR) technologies - bioenergy with carbon capture and storage (BECCS) and direct air carbon capture and storage (DACC...Read more...

Journal article

The Economic Journal:

Monopsony and the wage effects of migration

If labour markets are competitive, migration can only affect native wages via marginal products. But under imperfect competition, migration may also increase wage mark-downs ? if firms have greater monopsony power over m...Read more...

Blog

Centre for Cities:

A review of the Green Book review

While correctly rejecting criticisms that existing guidance is biased, the latest Green Book review suggests changes that should improve appraisal and decision making....Read more...

CEP discussion paper

The value of a park in crises: quantifying the health and wellbeing benefits of green spaces using exogenous variations in use values

Most people consider parks important for their quality of life, yet systematic causal evidence is missing. We exploit exogenous variations in their use values to estimate causal effects. Using a representative household ...Read more...

CEP discussion paper

Willingness to pay for workplace amenities

We develop a revealed preference approach to measure the value of workplace amenities by analyzing how variation in non-wage job attributes affects excess mass in the earnings distribution at budget discontinuities. The ...Read more...

Blog

Vox EU:

How an oil price crash sparked clean innovation: Insights from Norway

The transition to clean energy will require a significant reallocation of technological investments away from fossil energy sources towards cleaner alternatives. This column investigates whether leveraging the technologi...Read more...

CEP discussion paper

Minimum wages and low wage workers: compliance as non-employment margin

This paper examines the impact of a substantial minimum wage increase in Uruguay - a middle-income developing economy - on wages and employment. Using administrative data and a difference-in-differences approach, we anal...Read more...

Blog

Vox EU:

Living wages and government contracts

Living wages are an increasingly common policy tool for reducing poverty and improving the living standards of low-income workers. But until recently, there has been little evidence on how living wage clauses effect the ...Read more...

CEP discussion paper

Trade with nominal rigidities: understanding the unemployment and welfare effects of the China shock

We present a dynamic quantitative trade and migration model that incorporates downward nominal wage rigidities and show how this framework can generate changes in unemployment and labor participation that match those unc...Read more...

Journal article

German Economic Review:

The immobile incumbent problem in a model of short-term wage-posting

This paper takes the canonical Burdett-Mortensen model of wage-posting and relaxes the assumption that wages are set once-for-all, instead assuming they can only be committed one period at a time. It derives a closed-for...Read more...

CEP discussion paper

Labor market effects of global supply chain disruptions

We examine the labor market consequences of global supply chain disruptions. Specifically, we consider a temporary increase in international trade costs similar to the one observed during the COVID-19 pandemic and analyz...Read more...

CEP discussion paper

Firm climate investment: a glass half-full

We analyse the importance of climate-related investment using a large economy-wide survey of UK firms. Over half of firms expect climate change to have a positive impact on their investment in the medium term, with aroun...Read more...

CentrePiece article

How China?s rise has shaped innovation and exit among European solar firms

Should policymakers protect European firms by restricting imports of solar technology from China? Pia Andres finds that Chinese competition has resulted in many European firms going out of business, but it has also promp...Read more...

Blog

LSE Politics and Policy:

How to make Labour's National Wealth Fund work

Labour's plans for growth include the creation of a National Wealth Fund. A closer look at the proposals reveals that this is not like other Sovereign Wealth Funds, but is in fact more like a Green Investment Bank, meant...Read more...

Blog

Vox EU:

The evolution of gender in the labour market

Despite significant progress in closing the gender gap in earnings, work remains highly gendered, with women continuing to participate less in the workforce, work fewer hours, and face persistent wage disparities. This c...Read more...

Journal article

Journal of Monetary Economics:

Labor market effects of global supply chain disruptions

We examine the labor market consequences of global supply chain disruptions. Specifically, we consider a temporary increase in international trade costs similar to the one observed during the COVID-19 pandemic and analyz...Read more...

Chapter

The green transition: understanding and managing impacts for workers

in Handbook on Labour Markets in Transition: Promoting Resilience in a World in Flux.

The transition to net zero will have far-reaching and unequal effects on labour markets, as some jobs disappear, existing jobs change, and new jobs aligned with or supportive of the net-zero objective are created. The ev...Read more...

Government consultation

Invest 2035: the UK's modern industrial strategy

This document presents the submission made in response to the consultation on "Invest 2035: the UK's modern industrial strategy." The consultation was conducted by the Department for Business and Trade from 14 October 20...Read more...

CEP report

The green industrial policy matrix: Informing an industrial strategy for clean energy technologies

This paper presents new evidence to inform industrial strategy prioritisation of clean energy technologies in the UK. It focuses on seven technology categories relevant for reducing emissions across power, heat and indus...Read more...

Journal article

Oxford Review of Economic Policy:

Ethnic minority and migrant pay gaps over the life-cycle

It is well-known that ethnic minority and migrant workers have lower average pay than the White UK-born workforce. However, we know much less about how these gaps vary over the life-cycle because of data limitations. We ...Read more...

Blog

LSE Business Review:

Achieving net zero by 2050 requires changes to the UK skills landscape

As COP29 brings climate action into focus, it's clear that policy must go beyond carbon trading and finance. To make net zero a reality, the workforce must be equipped with the right skills. Aadya Bahl examines what this...Read more...

Journal article

The Review of Economics and Statistics:

Reservation wages and the wage flexibility puzzle

Using micro data for the UK and Germany, we provide novel evidence on the cyclical properties of reservation wages and estimate that wages and reservation wages are characterised by moderate and very similar degrees of c...Read more...

CentrePiece article

in brief... Designing carbon markets that deliver change

Ever since the European Union created its market-based carbon policy, governments and businesses have been keen to assess its impact. Jonathan Colmer, Ralf Martin, Mirabelle Muuls and Ulrich Wagner explain why analysing ...Read more...

CEP discussion paper

Capital-skill complementarity in firms and in the aggregate economy

We study capital-skill complementarity in a multi-sector framework featuring firm-specific, multi-factor production functions. We characterize the elasticity of the skill premium to the price of capital equipment in term...Read more...

Blog

Vox EU:

Global environmental cooperation and innovation

In the ongoing debate on climate change, one of the most pressing challenges is fostering effective international cooperation. This column examines the success of the 1987 'Montreal Protocol' in phasing out harmful chlor...Read more...

Journal article

Journal of Economic Literature:

Temporary employment in markets with frictions

Temporary employment has spiked in OECD countries over the last 40 years and is now a common feature of their labor market landscape. A large body of empirical literature examines the spread of temporary employment, but ...Read more...

Blog

LSE Politics and Policy:

Labour's planning reforms - building on grey belts and missed opportunities

Perhaps the proposal that people are most aware of when it comes to Labour's planning reform plans, the one that hit the headlines, is the idea of potentially re-defining small areas of green belts as "grey belt land". T...Read more...

Blog

Grantham Research Institute on Climate Change and the Environment:

Harnessing the UK's strengths for green growth

Esin Serin and Pia Andres set out evidence on the UK's sectoral and technological strengths to assist policymakers as they consider how to allocate support across the economy in a way that maximises green growth opportun...Read more...

Blog

Jam Tomorrow (Podcast):

The Green Belt: Fields forever? (podcast)

Ros Taylor talks to LSE professor Paul Cheshire and journalist Jonn Elledge about the problems facing Labour as it tries to persuade Britons of the need for more housing and infrastructure. And Paul Cheshire sets out a p...Read more...

CEP discussion paper

Transition to green technology along the supply chain

We analyze a model of green technological transition along a supply chain. In each layer, a good is produced with a dirty technology, or, if the required "electrification" innovation has occurred, with a clean technology...Read more...

Blog

Vox EU:

The effect of productivity growth on within-firm inequality

Wage inequality has increased dramatically in the US since the 1970s, largely driven by within-firm earnings inequality. This column uses combined data from three large micro datasets to study the drivers and implication...Read more...

Blog

LSE Business Review:

What an LSE-CBI survey reveals about net-zero action in UK firms

Sustainability is the focus of this second blog post about the survey of UK businesses carried out by LSE's Centre for Economic Performance and the Confederation of British Industry. Juliana Oliveira-Cunha, Bruno Serra-L...Read more...

CEP election analysis

Energy and climate change

The scale of change and investment required for net zero is challenging, but early action is the most cost-effective way to achieve the 2050 target and could bring opportunities....Read more...

CEP discussion paper

The wage of temporary agency workers

Using French administrative data, we estimate the wage gap distribution between in-house and temporary agency workers working in the same establishment and the same occupation. The average wage gap is about 3%, but the g...Read more...

Journal article

Management Science :

Managerial and financial barriers to the green transition

Using data on 10,776 firms across 22 emerging markets, we show that both credit constraints and weak green management hold back corporate investment in green technologies embodied in new machinery, equipment, and vehicle...Read more...

CEP election analysis

Work, wages and inactivity

The recent aggregate performance of the UK labour market looks good. But aggregate performance often obscures important changes around averages. Inequality along several dimensions remains a persistent feature of the UK ...Read more...

CentrePiece article

The national minimum wage: 25 years on

It is now just over a quarter of a century since a national minimum wage was introduced in the UK. Once a source of controversy due to fears that it would lead to fewer jobs, the policy has instead proved to be highly su...Read more...

CEP election analysis

Growth and productivity

The collapse in productivity growth underlies many of the problems of the UK economy ? from squeezed public services to stagnant living standards. Productivity growth in the UK has been weak relative to its own past and...Read more...

Blog

Imperial College Business School:

Do carbon markets work?

Ever since the EU created its market-based carbon policy, governments and businesses have been keen to see an impact. But analysing how effective policies can be on a noisy economic and global stage is complex - and hard...Read more...

Blog

IFS Zooms In (podcast):

Election 2024: How to grow the economy (podcast)

After years of sluggish growth and flatlining productivity, a rare political consensus has emerged that growing the economy is one of the key priorities of the next government. With an election on the way, we're bound to...Read more...

Journal article

Town Planning Review:

Pushing water uphill: containment policies doomed to fail

London has had a green belt for seventy years making it the `canary in the coal mine? for `zero land take?. Because of strong demand for housing space, rising prosperity underlies rising urban land demand so rigid physic...Read more...

Blog

INSEAD Knowledge:

Consumers' green conscience fosters clean innovation

Alexandra Roulet and Philippe Aghion explain how consumers' green conscience can foster clean innovation and provide tips for how companies can reach green goals in a highly competitive market....Read more...

Blog

Vox EU:

Cool cities: The value of urban trees

Cities are warming faster than their rural surroundings. But the ecosystem support provided by urban forestry is often omitted from climate policies due to the difficulty in assigning to it a credible monetary sum. Lu Ha...Read more...

External report

Labour Economics: Thinking through Labour's economic agenda

With the Labour Party having vowed to achieve the fastest growth in the G7, the Social Market Foundation has brought together leading economic experts to provide independent analysis of the party's proposed approach - an...Read more...

Blog

The Conversation:

How the national living wage helps the UK's poorest households: new research

The UK's national living wage has just been raised by 10% to #11.44 per hour. It is now payable for all workers aged 21 and over, where previously it was for those aged 23 and over. Introduced in 2016 as the flagship pol...Read more...

Blog

LSE British Politics and Policy:

The national minimum wage - 25 years on

This month marks 25 years since a national minimum wage was introduced in the UK. Once a controversial policy, due to fears that it would lead to fewer jobs, it has instead proven to be highly successful. The minimum wag...Read more...

Journal article

American Economic Journal: Applied Economics:

Measuring absolute income mobility: lessons from North America and Europe

We use linked parent-child administrative data for five countries in North America and Europe, as well as detailed survey data for two more, to investigate methodological challenges in the estimation of absolute income m...Read more...

Blog

LSE British Politics and Policy:

Mais lecture - a serious approach for sustainable and inclusive growth

In her Mais lecture, the Shadow Chancellor diagnosed the UK's problems of economic stagnation, persistent inequality and the instability that geopolitical shocks and climate change bring. Anna Valero outlines what a solu...Read more...

Journal article

Journal of Industry Competition and Trade:

A new approach for better industrial strategies

Industrial policy is back. After having been considered a taboo since the 1970s, ?new industrial policies? are at the core of governments? strategies to support countries during crises and enable the green and digital tr...Read more...

Blog

Grantham Research Institute on Climate Change and the Environment:

The UK's Spring Budget 2024: more of the same on growth and net zero?

The Spring Budget 2024 prioritised short-run tax cuts, with Chancellor Jeremy Hunt taking an extra 2% off national insurance contributions. This was anticipated, given we are in an election year - but it marks another mi...Read more...

Journal article

LSE Public Policy Review:

Net zero and the labour market: evidence from the UK

The urgent need for tackling climate change brings with it the need to understand the impacts of net zero policies on the labour market. Various approaches have been taken in attempts to measure and describe green jobs, ...Read more...

CentrePiece article

Ending stagnation

What can be done to address Britain?s relative economic decline over the past decade and a half? The final report of the Economy 2030 Inquiry presents an ambitious strategy for reversing decades of under-investment, by t...Read more...

Blog

Grantham Research Institute commentary:

Sustainable investment is good macroeconomics and fiscally prudent for the UK

In the global race for supremacy in 21st century markets, the UK must create expertise in building and deploying new energy technologies, and access the opportunities for stronger and more resilient growth that will brin...Read more...

CEP Insights

Insights: condensed

The Insights series is an introduction to the work of the Centre for Economic Performance (CEP). Each Insight highlights the contribution of CEP researchers to both academic understanding and policymaking in one area of ...Read more...

Blog

LSE British Politics and Policy:

A novel way to estimate car longevity shows that electric vehicles' life mileage is increasing fast

A car's longevity is important for consumers' budgets as well as for the environment. But reliable evidence on the longevity of electric vehicles is hard to come by. Viet Nguyen-Tien and Robert Elliot, with fellow author...Read more...

External report

The state of the UK economy 2024

The state of the UK economy is always an important matter, but it is all the more so in what looks likely to be an election year. This UK in a Changing Europe report takes stock of the UK economy in order to assess how i...Read more...

CEP discussion paper

Global managers, local workers: wage setting inside a multinational firm

How are wages set within a multinational firm? Combining cross-country data on wages and labor regulations with personnel records of a large multinational firm, I find that wage setting depends on the rank of the employe...Read more...

CEP report

Boosting growth and productivity in the United Kingdom through investments in the sustainable economy

It is now widely accepted that the UK has a major productivity growth problem, with chronic underinvestment across both the public and private sectors being a key cause. Continued low public investment, as laid out in th...Read more...

External report

Ending stagnation

The UK has great strengths, but is a decade and a half into a period of stagnation. The toxic combination of slow growth and high inequality was straining the living standards of low- and middle-income Britain well befor...Read more...

Journal article

The Review of Economics and Statistics :

Induced innovation and international environmental agreements: evidence from the ozone regime

This paper revisits one of the rare success stories in global environmental cooperation: the Montreal Protocol and the phase-out of ozone-depleting substances. I show that the protocol increased science and innovation on...Read more...

Blog

LSE British Politics and Policy:

Autumn Statement: Is the UK gearing up on policies for sustainable growth?

Growth will be a key focus of the forthcoming Autumn Statement, which the Chancellor of the Exchequer will deliver this Wednesday. Anna Valero, Esin Serin and Brendan Curran argue that effective measures to promote green...Read more...

Blog

LSE British Politics and Policy:

More steps in the wrong direction on net zero, at precisely the wrong time

This week's King's Speech has paved the way for a further weakening of climate policy in the UK by introducing a bill to support future oil and gas drilling in the North Sea. Esin Serin and Anna Valero explain how this a...Read more...

External report

Finance for the future

The UK Government has an opportunity to mobilise far greater amounts of private investment for public policy priorities than is the case now. Blended finance, deployed well, offers a tried and tested pathway for public a...Read more...

Blog

LSE Business Review:

Britain can promote private investment and economic growth. Here's how

The UK investment ecosystem needs rewiring across the board to increase firms' desire to invest in productive and sustainable assets, and to enhance their ability to do so. Paul Brandily, Mimosa Distefano, Krishan Shah, ...Read more...

CEP discussion paper

Individual welfare analysis: a tale of consumption, time use and preference heterogeneity

How accurately does household income reflect the well-being of the individuals living within the household? Looking at household income does not take unequal consumption sharing within families, the value of time use (le...Read more...

CentrePiece article

Geopolitics and the electric vehicle revolution

Rising demand for electric vehicles (EVs) is changing the geopolitical landscape, as the world pivots away from fossil fuels towards the green minerals critical to the EV supply chain. Benjamin Jones, Viet Nguyen-Tien, R...Read more...

Journal article

Journal of Economic Perspectives:

The evolution of work from home

Full days worked at home account for 28 percent of paid workdays among Americans 20?64 years old, as of mid-2023. That's about four times the 2019 rate and ten times the rate in the mid-1990s. We first explain why the bi...Read more...

Blog

LSE Review of Books:

Creative destruction for growth and change

John Van Reenen introduces his new book, The Economics of Creative Destruction, co-edited with Ufuk Akcigit, which explores how technological innovation can be used to drive growth and tackle problems from inequality to ...Read more...

Blog

LSE Business Review:

What can house prices tell us about the environmental costs of overhead power lines?

The transition to green energy requires many new electrical power lines to be constructed. In the UK, this construction is a contentious planning and political issue. Steve Gibbons and Cheng Keat Tang show the local cost...Read more...

CEP discussion paper

Induced innovation and international environmental agreements: evidence from the ozone regime

This paper revisits one of the rare success stories in global environmental cooperation: the Montreal Protocol and the phase-out of ozone-depleting substances. I show that the protocol increased science and innovation on...Read more...

Blog

The News Agents:

Is this Sunak's 'moment of shame'? (podcast)

Rishi Sunak was propelled into explaining his new position in a hastily arranged press conference after details of plans to adjust (water down) his commitment to green policies were leaked to the BBC. Anna Valero and Lor...Read more...

Blog

LSE British Politics and Policy:

The UK should lead on a green industrial strategy not roll back

The UK government appears to be watering down its commitments to net zero, breaking the cross-party consensus on the need for Britain to lead in the global battle against climate change. Yet now is the time to double dow...Read more...

Journal article

Annual Review of Economics:

Labor market insurance policies in the Twenty-First Century

The COVID-19 crisis was a stress test for unemployment insurance schemes as it involved a sudden and unexpected shutdown of a very large set of activities. This forced countries to introduce, often from scratch, income s...Read more...

Blog

LSE Business Review:

Brazil's comparative advantage in soybean production triggered deforestation

Tropical ecosystems house an immense biomass, which makes it imperative to understand how they are affected by technology and trade. Igor Carreira, Francisco Costa and Joao Paulo Pessoa examine the Brazilian rainforest's...Read more...

Book

The Economics of Creative Destruction
New Research on Themes from Aghion and Howitt

A stellar cast of economists examines the roles of creative destruction in addressing today’s most important political and social questions. Inequality is rising, growth is stagnant while rents accumulate, the env...Read more...

CEP discussion paper

Spatial wage inequality in North America and Western Europe: changes between and within local labour markets 1975-2019

The rise of economic inequalities in advanced economies has been often linked with the growth of spatial inequalities within countries, yet there is limited comparative research that studies the relationship between nati...Read more...