Blog

Witness at International Trade Committee

I recently gave evidence as a witness in the inquiry into Inward Foreign Direct Investment organised by the International Trade Committee. Other witnesses included Diego López, Managing Director, Global SWF; Duncan Bonfield, Chief Executive Officer, International Forum of Sovereign Wealth Funds; Nicolai Tangen, Chief Executive Officer, Norges Bank Investment Management; Trond Grande, Deputy Chief Executive Officer, Norges Bank Investment Management; Lord Grimstone, Investment Minister, Department for International Trade / Department for Business, Energy and Industrial Strategy; and Lord Callanan, Minister for Business, Energy and Corporate Responsibility, Department for Business, Energy and Industrial Strategy.

New working paper on Weather and Lockdown Compliance

The effectiveness of containment measures depends on both epidemiological and sociological mechanisms, most notably compliance with national lockdown rules. Yet, there is growing discontent with social distancing rules in many countries, which is expected to intensify further during summer. Using a highly granular dataset on compliance of over 105,000 individuals in the United Kingdom (UK), we find that compliance with lockdown policies tends to be high in the overall population, but that specific segments of society are substantially less compliant. Our findings show that warmer temperatures decrease non-compliance with governmental guidelines of individuals who are male, divorced, part-time employed, and/or parent of more than two children. Thus, as long as heard immunity through vaccination is not achieved and new strains demand containment measures to remain in place, understanding the individual determinants of non-compliance behaviour in different seasons of the year will remain important for policymakers to design effective policies in the future.

Full paper can be accessed at: https://www.researchgate.net/publication/352355506_Weather_and_Lockdown_Compliance

My piece on Pandemic misery index in top 5 most read in LSE EUROPP blog in 2020

To mark the end of 2020, the LSE EUROPP blog compiled a list of top 5 EUROPP articles with the highest readership in 2020 and my recent post introducing a pandemic misery index was ranked 3rd:

1. The implications of Brexit for the UK economy

2. The economic consequences of Covid-19

3. A pandemic ‘misery index’: Ranking countries’ economic and health performance during Covid-19

4. Beating Covid-19: The problem with national lockdowns

5. Thomas Piketty on inequality

Pandemic Misery Index

Ranking countries economic and health performance during Covid19

Tim Vlandas, University of Oxford. This post first appeared on LSE Europe blog

What has been the economic and health performance of different countries since the covid19 crisis began? I propose to rank countries on the basis of how they have fared since the ongoing pandemic began by combining data on two dimensions: a health dimension capturing mortality data; and an economic dimension capturing increases in unemployment.

While the two indicators I select cannot provide an exhaustive picture, they are nevertheless useful in giving us some sense of how countries have fared across two of the dimensions that the covid19 crisis has affected most.

A measure of health costs

The health dimension is based on the so-called p-score. This data is available from the ourworldindata website (data extracted on 14th November 2020) and captures the weekly deviation of current mortality from the 5 years average for that week.

Excess mortality have two advantages over more direct measures of covid19 deaths. First, they do not depend on the testing capacity of the country under consideration, nor are they dependent on definitions of what it means to have died from covid19.

Second, they include the total ‘health cost’ of the pandemic in terms of mortality, i.e. the excess deaths that are the product of both the pandemic and the policy responses to the pandemic.

A measure of economic costs

However, as is well recognised and widely discussed, the pandemic and our policy responses entail significant economic costs. Many economic indicators could be relevant to capture the economic costs. For my purpose, I focus on monthly unemployment rate data, which is extracted from the OECD website.

Partly, this choice is based on data availability constraints, since the alternative to use instead GDP growth data would be hindered by more limited, less recent and less frequent data at the time of writing.

But partly this choice finds inspiration in the so-called misery index which was created following the stagflation in the 1970s. At the time, governments were attempting – and more or less able – to jointly minimise inflation and unemployment.

Adverse unemployment performance can be captured in two distinct ways. The first is simply to look at the average monthly unemployment rate. However, this does not account for the fact that when the pandemic hit, countries started from different relative position. Since the p-score is calculated as a percentage increase from a previous average, I calculate an ‘unemployment score’ as the percentage increase in unemployment from one month to the next.

Country coverage and time period

The following countries are included in my analysis: Austria, Belgium, Canada, Chile, Czech Republic, Denmark, England & Wales, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Israel, Italy, Latvia, Lithuania, Luxembourg, Netherlands, Norway, Poland, Portugal, Slovakia, Slovenia, South Korea, Spain, Sweden, and the United States.

Because ourworldindata.org does not report excess deaths by age groups for the UK as a whole but instead for England&Wales, this is the data I use throughout. For most countries. I have data from January to September 2020 (inclusive). More recent data was not available for all countries at the time of writing so what follows does not capture what has happened since the ‘second wave’.

Excess mortality by age group

I start by showing the weekly evolution of excess mortality by four age groups (Figure 1): 15-64; 65-74; 75-84 and 85+.

The figure reveals the (by now) familiar worse performers, most notably Belgium and England. Note further that English experience is not atypical in the UK given the similar picture for Scotland and to a lesser extent Northern Ireland.  

Other countries that did not fare well include Chile, Spain, Netherlands, Italy; although we can observe differences in the timing of the peak. In all cases, excess mortality is strongly a function of age, as has been well documented elsewhere.

Figure 1: Weekly excess mortality by age group

Economic and health costs over time

If we abstract from the cross-national variation, we can see February was actually below the excess mortality average of the last five years for that time of the year and in March the average for our countries only experienced a mild increase. By contrast, in April most countries experienced very significant rises in their excess mortality (Figure 2).

Figure 2: Monthly excess mortality and unemployment score

Bringing in the labour market deterioration into the picture, the increase in unemployment associated with the lockdown measures many countries introduced is also apparent. From May onwards and well into September, both unemployment and mortality stopped to increase in any substantial way across this sample of countries.

The correlation between the unemployment score and different measures of excess mortality is statistically significant and positive but modest (between 0.13 and 0.15), which suggests that countries’ performance in one dimension does not relate strongly for its performance on the other dimension.

This contrasts with claims about the automatic inevitable adverse effects of addressing pandemic for the economy, but also about the presumed positive effects of addressing the pandemic for the economy.

Finally, the heterogeneity is apparent when it comes to excess mortality by age group (figure 3): while some countries experienced the highest increases in mortality for the very old (85+), in others the figures were worst for the 65 to 84, and we can observe both below and above average excess mortality rates for the 16-64 age group.

Figure 3: Excess mortality by country and age group over whole period (from Febuary 2020 onwards)

Pandemic Misery Index (PMI)

Policy makers are therefore faced with a joint minimisation problem whereby they are trying to minimise both health and economic costs. It is in this respect worth keeping in mind that both are – at least in the medium to long term – intrinsically linked to each one another.

On the one hand, mass health issues end up undermining economic productivity and growth. On the other hand, economic decline, insecurity and deprivation generate health problems while also limiting our ability to fund health interventions.

If we combine our economic and health performance indicators into a single pandemic misery index (PMI), we can see that the peak in April hides significant cross-national variation as captured by the standard deviation, and that as the mean of the PMI falls, so does its standard deviation (Figure 4).

In Figure 5, we plot the cross-national variation in the PMI. In the top worst performers we find three liberal market economies (the UK and the US) and two southern European countries (Spain, Italy and Portugal). Although not in top five worst performers, two small open economies in continental Europe – Belgium and Netherlands – also fared poorly.

Figure 4: Pandemic misery index over time

Note: the standard deviation statistic with weights returns the bias-corrected standard deviation, which is based on the factor sqrt(N_i/(N_i-1)), where N_i is the number of observations.

Figure 5: Pandemic misery index across countries

To assess what’s driving poor performance we can disaggregate the PMI along its two dimensions (Figure 6): the PMI in Spain, Italy and the UK is driven by mortality rates with relatively mild increases in unemployment, compared to the US and to Canada, where the increases in unemployment was much more acute.

Among good performers, we find several central and eastern European countries, including Latvia, Hungary, and Slovakia; and also Nordic countries such as Norway, Denmark and Iceland.

Of course, different countries started with different labour market positions, so plotting average levels (instead of changes) in unemployment rates, reveals a slightly different picture (Figure 7). Greece and Spain now look worsts in terms of unemployment rate over the period, followed by Chile, Canada, US and Italy. Czech Republic, Poland, Netherlands, England and Wales, among others kept a low level of unemployment rate.

Finally, excess mortality among the very old (85+) reveals especially dire numbers for parts of Southern Europe (Figure 8), but contrast Spain and Italy, and to a lesser extent Portugal on one hand, and Greece on the other hand. The US, England and Wales, and Canada score high but are not in the top 6 worst performers, while Iceland, Norway, Hungary, Denmark and Slovakia do especially well.

Figure 6: Disaggregating the pandemic misery index across countries

Figure 7: Disaggregated PMI using levels in average monthly unemployment

Figure 8: Disaggregated PMI using mortality rates for over 85 rather than all ages

CNN article on recent interest in UBI and divisions within UBI coalition

Very good new CNN article by Julia Horowitz on “Job guarantees and free money: ‘Utopian’ ideas tested in Europe as the pandemic gives governments a new role”.

It discusses the recent interest in the Universal Basic Incomes (UBI) and what economic and political factors are driving it.

As this partly touches on research I have been doing on support for UBI across Europe, I had the pleasure of discussing the challenges of a pro-UBI coalition with Julia.

Indeed, as I show in my recent articles, the coalition supporting the idea of a UBI is very heterogenous and it has been shown elsewhere that support also depends on the framing of the question.

Question in the European Social Survey

The 2016 wave of the ESS (ESS,2016) includes a question about the university basic income (UBI). Respondents are asked whether they are “against or in favour of the UBI scheme” being introduced in their respective country, which “some countries are currently talking about”, with the following characteristics:

1. The government pays everyone a monthly income to cover essential living costs;

2. It replaces many other social benefits;

3. The purpose is to guarantee everyone a minimum standard of living;

4. Everyone receives the same amount regardless of whether or not they are working;

5. People also keep the money they earn from work or other sources;

6. This scheme is paid for by taxes.

Support for the Universal Basic Income across countries

I focus on 21 countries in my analysis: Austria, Belgium, Czech Republic, Estonia, Finland, France, Germany, Hungary, Iceland, Ireland, Italy, Lithuania, Netherlands, Norway, Poland, Portugal, Slovenia, Spain, Sweden, Switzerland, and the United Kingdom.

Adding those who are “in favour” or “strongly in favour” of the scheme indicates that a slight majority (51.2%) support a UBI.

The cross-national variation can be observed below (with the bars indicating the uncertainty around the estimated country average). Support tends to be higher in South and Central Eastern Europe, and lower in Scandinavian countries.

Who supports UBI?

My findings are partly consistent with what we know about the drivers of support for other social policies. Younger, low-income, left-leaning individuals and the unemployed are more likely to support a UBI.

Individuals with positive views of benefit recipients and/or high trust in political institutions are also more supportive, while anti-immigration attitudes are associated with lower support.

Trade union membership is not always relevant, perhaps because of contradictory effects: unions typically support new welfare state policies but they also have a key role in many existing welfare state schemes and may worry about individuals’ attachment to the labour market.

Cross-national variation

At the cross-national level, support tends to be higher where unemployment benefit activation is more pronounced and unemployment benefits less generous.

This suggests that countries where welfare state institutions are less developed might be better placed to introduce a UBI.

The paradox of high support

Overall these findings suggest one possible reason why countries with high support for a UBI have not introduced it: the mixed support among the left means a pro-UBI coalition has to draw on right-wing voters who may support it only with lower taxes and/or extensive replacement of welfare state benefits, which in turn may further alienate parts of the left.

In other words, the fact that a UBI can mean different things to different people may explain both the fairly high support for the scheme in some countries and the difficulty in finding a politically viable coalition to support its introduction when the financing of a UBI and its interaction with existing welfare state benefits have to be specified.

Thus, the wide political appeal of the UBI might also be its greatest weakness: because many people support a UBI for very different reasons, the basis of support are politically and ideologically fragmented and may therefore be irreconcilable.

Details about European Social Survey

Reference:

European Social Survey (2017). ESS Round 8 (2016/2017) Technical Report. London: ESS ERIC

Excerpt from ESS website:

“The European Social Survey (ESS) is an academically-driven multi-country survey, which has been administered in over 30 countries to date. Its three aims are, firstly – to monitor and interpret changing public attitudes and values within Europe and to investigate how they interact with Europe’s changing institutions, secondly – to advance and consolidate improved methods of cross-national survey measurement in Europe and beyond, and thirdly – to develop a series of European social indicators, including attitudinal indicators. In the eighth round, the survey covers 23 countries and employs the most rigorous methodologies. From Round 7 it is funded by the Members, Observers and Guests of ESS European Research Infrastructure Consortium (ESS ERIC) who represent national governments. Participating countries directly fund the central coordination costs of the ESS ERIC, as well the costs of fieldwork and national coordination in their own country. The survey involves strict random probability sampling, a minimum target response rate of 70% and rigorous translation protocols. The hour-long face-to-face interview includes questions on a variety of core topics repeated from previous rounds of the survey and also two modules developed for Round 8 covering Public Attitudes to Climate Change, Energy Security, and Energy Preferences and Welfare Attitudes in a Changing Europe (the latter is a partial repeat of a module from Round 4).”

References

Vlandas, T. (2020) “The Political Economy of individual level support for the basic income in Europe” Journal of European Social Policy [PDF]

Vlandas, T. (2019) “The Politics of the Basic Income Guarantee: Analysing individual support in Europe” Basic Income Studies [PDF]

Recent publications (2020 or forthcoming)

Explaining variation in support for Basic Income

Building on my previous research published in the Basic Income Studies Journal in 2019, I carried a more systematic investigation of the Political Economy of individual level support for the basic income in Europe which has is now out in online first in the Journal of European Social Policy. In the process of exploring why different individual characeristics correlated with support for a BI, I became interested in why different parts of the Left are more or less supportive of a BI. This led me to work with Prof Hanna Schwander on different strands of left wing thought and how they may be associated with BI support. This has been accepted at Journal of International and Comparative Social Policy.

“The Political Economy of individual level support for the basic income in Europe” Journal of European Social Policy. ABSTRACT: There is a long-standing debate in academic and policymaking circles about the normative merits and economic effects of a universal basic income (UBI). However, existing literature does not sufficiently address the question of which factors are associated with individual support for a UBI. While a large literature in political economy has focused on individual preferences for existing welfare state benefits, it has not analysed the case of a UBI. Using the eighth wave of the European Social Survey (ESS), this article seeks to remedy this gap by analysing individual support for a UBI in 21 European countries. The findings from logistic regression analyses with country fixed effects are partly consistent with the expectations of previous social policy and political economy literatures. Younger, low-income, left-leaning individuals and the unemployed are more likely to support a UBI. Individuals with positive views of benefit recipients and/or high trust in political institutions are also more supportive, while anti-immigration attitudes are associated with lower support. By contrast, the patterns across occupations are mixed and male respondents appear slightly more supportive. Trade union membership is not statistically significant, perhaps because of contradictory effects: unions typically support new welfare state policies but they also have a key role in many existing welfare state schemes and may worry about individuals’ attachment to the labour market. At the cross-national level, support tends to be higher where benefit activation is more pronounced and unemployment benefits less generous. These results suggest one possible reason why countries with high support for a UBI have not introduced it: the mixed support among the left means a pro-UBI coalition has to draw on right-wing voters who may support it only with lower taxes and/or extensive replacement of welfare state benefits, which in turn may further alienate parts of the left.

“The Left and Universal Basic Income: The role of ideology in individual support” (with Hanna Schwander), Journal of International and Comparative Social Policy. ABSTRACT: Few studies analyse individual support for Universal Basic Income (UBI). This article theorises and explores empirically the relationship between different strands of left ideology and support for UBI across European countries. We delineate three types of concerns about capitalism: ‘Labourist Left’ worry about exploitation; ‘Libertarian Left’ about repression; and ‘Social Investment Left’ about inefficiencies. Contrary to expectations, our results based on data from the European Social Survey suggest that having high concerns about exploitation is positively correlated with support for UBI, whereas repression concerns are negatively correlated with support. In line with our hypothesis, left-leaning individuals with efficiency concerns are more likely to support UBI. Our findings call for more detailed surveys and further research on the different ideologies within the Left and how these relate to variation in support for UBI which would shed further light on the resulting potential coalition dynamics for a larger-scale introduction of UBI.

Political Economy of labour market dualisation and liberalization

Two articles on the political economy of labour market dualization and liberalization have also just come out. The first deals with the different ways to test the role of labour market dualization in shaping social policy preferences and is part of a special issue on the wider importance of dualization for political science, with contributions from David Rueda, Achim Kermmerling, Hanna Schwander, Silja Hausermann, Philip Rehm and Marius Busemeyer (and more). The second article (joint with Marco Simoni) tries to understand the patterns of labour market liberalization reforms in Europe since the 1980s. It argues this is the outcome of complex interactions between governments, partisanship, trade unions and the state of the Economy.

“The political consequences of labour market dualization: Labour market status, occupational unemployment and policy preferences” Political Science Research and Methods. ABSTRACT: This article explores empirically how different types of labour market inequality affect policy preferences in post-industrial societies. I argue that the two main conceptualisations of labour market vulnerability identified in the insider-outsider literature are complementary: Labour market risks are shaped by both labour market status-whether an individual is unemployed, in a temporary or permanent contract-and occupational unemployment-whether an individual is in an occupation with high or low unemployment. As a result, both status and occupation are important determinants of individual labour market policy preferences. In what follows, I first briefly conceptualise the link between labour market divides, risks and policy preferences and then use cross-national survey data to investigate the determinants of preferences.

“Labour Market Liberalization and the Rise of Dualism in Europe as the Interplay between Government, Trade Unions and the Economy” (with Marco Simoni), Social Policy & Administration. ABSTRACT: Why have labour market reforms varied so much across European countries in the 30 years preceding the economic crisis? We argue that the degree of liberalization over time in each country depends on the interaction between governments’ partisan leaning, the strength of trade unions and the economic problem-load pushing governments to adopt distinct labour market reform strategies. Building on existing literature, we interpret ‘dualizing’ labour market reforms as weaker forms of liberalization and test our argument on the cross‐national variation in over 200 labour market reforms carried out in 14 western European countries between 1985 and 2007. Our empirical results show that governments are less likely to liberalize if they face a strong union movement and the economic problem-load is low. However, even in countries with strong unions, opposition may not always manage to block change. First, as unemployment becomes more severe, unions’ ability to reduce the likelihood of liberalization strongly decreases. Second, trade unions often do not manage to prevent liberalization advanced by social democratic governments. Third, governments can devise three (non-rival) strategies to deflect opposition: (1) they can re-regulate parts of the labour market to protect certain workers from liberalization; (2) generous unemployment benefits can cushion the costs of liberalization, thereby increasing its likelihood; and (3) they can carry out two‐tier reforms to insulate insider (unionized) workers employed in permanent contracts, which limits union opposition. By identifying the complex interactions between variables that explain variation in labour market liberalization across European countries, this article contributes to our understanding of the evolution of European political economy.

Economic insecurity, anti-immigration attitudes and far right party support in Europe

Finally, two papers on the rise of far right parties in Europe were also published. They both deal, from different angles, with whether and how exactly concerns about immigration shape far right party support.

“‘Birds of a feather’? Assessing the prevalence of anti-immigration attitudes among the far-right electorate”, (with Daphne Halikiopoulou and Daniel Stockemer) Journal of Ethnic and Migration Studies. ABSTRACT: This article focuses on the prevalence of anti-immigration attitudes among the far-right electorate. Drawing on the distinction between the predictive power of immigration concerns, and the question of how widespread these concerns are among the far-right voter pool, we proceed in two steps. First, we assess the extent to which anti-immigration attitudes are a necessary condition for voting far right; and second we examine whether far right voters with different levels of anti-immigration attitudes exhibit similar individual and attitudinal characteristics. Using data from the 8 th wave of the European Social Survey (ESS) we find that, surprisingly, anti-immigration attitudes are not a necessary condition for voting for the far right as approximately one third of far-right voters have no concerns over immigration. We further show that far-right voters with different levels of immigration concerns have different profiles when it comes to other predictors of the far right-vote including ideological affinity, attachment to the EU and government satisfaction. Our contribution is significant as we suggest that there are different routes to voting for the far right by groups with different grievances, including non-immigration related.

“When economic and cultural interests align: the anti-immigration voter coalitions driving far right party success in Europe” (with Daphne Halikiopoulou) European Political Science Review. ABSTRACT: This article contests the view that the strong positive correlation between anti-immigration attitudes and far right party success constitutes evidence in support of the cultural grievance thesis and against the economic grievance thesis. We argue that far right party success depends on the ability to mobilise a coalition of interests between their core supporters, i.e. voters with cultural grievances over immigration and the, often, larger group of voters with economic grievances over immigration. Using individual level data from 8 rounds of the European Social Survey (ESS), our empirical analysis shows that while cultural concerns over immigration are a stronger predictor of far right party support, those who dislike the impact of immigration on the economy are important to the far right in numerical terms. Taken together, our findings suggest that economic grievances over immigration remain pivotal within the context of the transnational cleavage.

Oxford Supertracker: Global Directory for COVID Policy Trackers & Surveys

Since the COVID-19 pandemic began, many universities and international organisations have sought to create new data monitoring policies introduced to tackle COVID-19 and its repercussions on our economies and societies.

Together with my colleagues Mary Daly, Bernhard Ebbinghaus, Lukas Lehner, and Marek Naczyk at the department of social policy and intervention (DSPI), we have created the Oxford Supertracker: a global directory for COVID policy trackers and surveys. This supertracker makes it possible to search and identify different datasets on a variety of topics.

For more information, please visit the website and feel free to suggest new sources!

Covid-19 resources

Universities and academics:

Blavatnik, University of Oxford

Imperial College

Melinda Mills at University of Oxford

Organisations:

World Bank

European Trade Union Confederation

IMF

OECD

European Commission

Surveys:

International Survey on Covid

YouGov

VoxEU

Policy specific:

Long term care

Bruegel

OECD policy responses to Covid

Covid and health care capacity

Media:

FT

NYT

Guardian

Le Monde

Thomson Reuters

Modelling and data:

Epidemic calculator

Our World in Data

Bing

Dashboards

statnews

The Political Consequences of Labor Market Dualization

It took a while but my contribution to the symposium on dualization in PSRM is finally out in first view!

My article explores empirically how different types of labor market inequality affect policy preferences in post-industrial societies.

I argue that the two main conceptualizations of labor market vulnerability identified in the insider–outsider literature are complementary: labor market risks are shaped by both labor market status—whether an individual is unemployed, in a temporary or permanent contract—and occupational unemployment—whether an individual is in an occupation with high or low unemployment.

As a result, both status and occupation are important determinants of individual labor market policy preferences.

In this paper, I first briefly conceptualize the link between labor market divides, risks and policy preferences, and then use cross-national survey data to investigate the determinants of preferences.

Check out other papers in this symposium by Achim Kemmerling, Marius Busemeyer, Silja Hausermann, Hanna Schwander, Philip Rehm, Georg Picot, Paul Marx and David Rueda!

New paper on individual support for basic income in Europe

There is a long-standing debate in academic and policy making circles about the normative merits and economic effects of a Universal Basic Income (UBI). However, existing literature does not sufficiently address the question of the factors associated with individual support for a UBI. While a large literature in political economy has focused on individual preferences for existing welfare state benefits, it has not analysed the case of a UBI.

I seek to remedy this gap in a new journal article entitled “The Political Economy of individual level support for the basic income in Europe” forthcoming at the Journal of European Social Policy.

Using the eighth wave of the European Social Survey (ESS), I analyse individual support for a UBI in 21 European countries. The findings from logistic regression analyses with country fixed effects are partly consistent with the expectations of previous social policy and political economy literatures. Younger, low-income, left-leaning individuals and the unemployed are more likely to support a UBI. Individuals with positive views of benefit recipients, and/or high trust in political institutions are also more supportive, while anti-immigration attitudes are associated with lower support.

However, the patterns across occupations is mixed and male respondents appear slightly more supportive. Trade union membership is not statistically significant, perhaps because of contradictory effects: unions typically support new welfare state policies but they also have a key role in many existing welfare state schemes and may worry about individuals’ attachment to the labour market. At the country level, support tends to be higher where activation is more pronounced and unemployment benefits less generous.

Taken together, these results suggest one possible reason why countries with large support for a UBI have not introduced it: the mixed support among the Left means a pro-UBI coalition has to draw on right-wing voters who may support it only with lower taxes and/or extensive replacement of welfare state benefits, which in turn may further alienate parts of the Left.

For more information  you can access the PDF of the article