The impact on incentives of five years of social security reform in the UK

The UK's Labour Government has expanded means-testing of social security but attempted to do so while minimising the disincentive effects typically associated with such an approach. We test whether it has succeeded by reviewing the effect of 5 years of reforms on a range of incentives across the British population, undertaking micro-simulations on survey data. The incentive to enter work increases for the first earner in families, but for second- earners in couples the incentive to work has generally been dulled. Effective marginal tax rates have generally increased for workers, in spite of reductions in benefit withdrawal rates, owing to the increasing numbers facing means-tested benefit withdrawal. Reforms have reduced the number of pensioners facing very high effective marginal rates, but increased the number on moderately high rates. Incentives regarding family life have been affected: partnering has become less financially attractive for low-income individuals; having children has become more financially attractive.

Five years of social security reforms in the UK

The current Labour Government was elected in 1997 with few specific social security proposals. This paper argues that after five years, consistent trends in social security policy have emerged: there is a willingness to increase benefits; a “work-first” focus; increasing centrality for benefits that relate to ‘need’, which has involved expanded means-testing; a downgrading of contributory benefits; and, a desire to reduce poverty by redistributing to particular demographic groups. Many of these characteristics of Labour policy, such as the size of caseloads or aggregate expenditure, are yet to show up in various aggregate data, and we argue that this is probably due to various counter-balancing socio-economic changes since 1997. Looking forward, we discuss what the introduction of new forms of means-test might achieve. We also suggest that it might be considered odd that Labour has left Housing Benefit and Council Tax Benefit unreformed, especially since a good chance to reform them without significant cost or low-income losers, has been missed.

A method for decomposing the impact of reforms on the long-run income distribution, with an application to universal credit

Income inequality, as well as the impact of tax and benefit reforms on it, has typically been evaluated with respect to ‘snapshot’ incomes, measured over short periods such as one week or year. But longitudinal data allows long-run measures of income to be used, which will be of interest to policymakers interested in persistent, rather than only temporary, poverty. We show that the long-run distributional impact of a reform is the combination of three effects: a ‘static’ effect, which would be observed if individuals’ circumstances were consistent throughout their life; an ‘income dynamics’ effect, resulting from individuals moving around the income distribution over time; and a ‘tagging’ effect, resulting from the reform affecting individuals differently according to whether they have a characteristic predictive of long-run income conditional on current income. We propose a simple method to decompose these three effects for any inequality, poverty, or distributional statistic. We use the method to examine the distributional impact of the introduction of ‘Universal Credit’, the most important reform to the UK benefit system in decades. We show that Universal Credit is less regressive on a long-run basis than a snapshot one, partly because of income dynamics but also because it reduces entitlements for (or ‘negatively tags’) those who are more likely to find a period of low income to be temporary, rather than persistent

How and when to end the COVID-19 lockdown: an optimization approach

Countries around the world are in a state of lockdown to help limit the spread of SARS-CoV-2. However, as the number of new daily confirmed cases begins to decrease, governments must decide how to release their populations from quarantine as efficiently as possible without overwhelming their health services. We applied an optimal control framework to an adapted Susceptible-Exposure-Infection-Recovery (SEIR) model framework to investigate the efficacy of two potential lockdown release strategies, focusing on the UK population as a test case. To limit recurrent spread, we find that ending quarantine for the entire population simultaneously is a high-risk strategy, and that a gradual re-integration approach would be more reliable. Furthermore, to increase the number of people that can be first released, lockdown should not be ended until the number of new daily confirmed cases reaches a sufficiently low threshold. We model a gradual release strategy by allowing different fractions of those in lockdown to re-enter the working non-quarantined population. Mathematical optimization methods, combined with our adapted SEIR model, determine how to maximize those working while preventing the health service from being overwhelmed. The optimal strategy is broadly found to be to release approximately half the population 2–4 weeks from the end of an initial infection peak, then wait another 3–4 months to allow for a second peak before releasing everyone else. We also modeled an “on-off” strategy, of releasing everyone, but re-establishing lockdown if infections become too high. We conclude that the worst-case scenario of a gradual release is more manageable than the worst-case scenario of an on-off strategy, and caution against lockdown-release strategies based on a threshold-dependent on-off mechanism. The two quantities most critical in determining the optimal solution are transmission rate and the recovery rate, where the latter is defined as the fraction of infected people in any given day that then become classed as recovered. We suggest that the accurate identification of these values is of particular importance to the ongoing monitoring of the pandemic

Identifying tensions in the development of northern Australia: implications for governance

Northern Australia has a population of 1.2 million people across nearly half the continental landmass. It is home to many diverse communities of people, including Aboriginal nations, descendants of European, Melanesian and Asian settlers and more recent arrivals. It is an area of globally significant natural beauty with unique ecologies. It also has strategic and economic importance to Australia. A contentious debate over the future of the region can be observed within three themes: Big development, big conservation and policies seeking Indigenous wellbeing. We argue that if the agendas associated with each of these themes and their associated agents are driven forward in isolation, the tensions between the three will compromise the health, wellbeing and economic coherence and vitality of the North. This paper presents an overview of the present governance landscape with a critique of the role of neoliberalism and neoliberal governmentality. It identifies some of the ways in which 'other' social values and ways of knowing are either marginalised or rendered invisible in these narratives of governance and development. In highlighting the tensions that result from these exclusions, we argue there is a need to both understand these dynamics, and move towards an explicit commitment to open, genuine dialogue, inclusive of the communities that reside in northern Australia

Inquiring Decision Systems: A Churchmanian Approach to Ethical Decision Making

Many business organizations seem to be doing everything but making ethical organizational decisions these days. In stark contrast, social enterprises are organizations that operate as businesses but are altruistic, humanitarian, and seek the goal of creating social value in effective, efficient and ethical ways. This paper applies principles of social enterprises to develop a multi-perspective framework for ethical business decision-making within a philosophical context provided by C. West Churchman’s inquiring systems in organizations

Governing community-based natural resource management in Australia: international implications

Community-based natural resource management (CBNRM) has grown in stature as a key component of many national natural resource and rural development governance systems. Despite their growth, the integrity of CBNRM governance systems has rarely been analysed in a national context. To enhance dialogue about how best to design and deploy such systems nationally, this paper analyses the Australian system in detail. The Australian system was selected because the nation has a globally recognised and strong history of CBNRM approaches. We first contextualise the international emergence of national CBRM governance systems before analysing the Australian system. We find that a theoretically informed approach recognising regions as the anchors in brokering multi-scale CBNRM was applied between 2000 and 2007. Subsequent policy, while strengthening indigenous roles, has tended to weaken regional brokering, Commonwealth–state cooperation and research collaboration. Our findings and consequent emerging lessons can inform Australian policy makers and other nations looking to establish (or to reform existing) CBNRM governance systems. Equally, the research approach taken represents the application of an emerging new theoretical framework for analysing complex governance systems

Income distribution and inequality among fishers and fish traders in two small-scale Kenyan coral reef fisheries

Since the mid-1960s fish production has become increasingly market-driven with actors downstream in the commodity chain increasingly determining the price of fish. Previously, it has been shown that fishers' incomes tend to be low in both developed and developing countries and that linking fisheries to global markets causes income inequalities. Research has also shown that although many factors affect the sustainability of any individual fishery, income inequality and the struggle for food security are significant contributors, particularly in developing countries. Despite awareness of the link between poverty and resource exploitation, the distribution of benefits derived from fish trade remains poorly understood. This study, carried out in five small-scale coral reef fishing communities along the Kenyan coast, sought to explore this link and in so doing found that both fishers and traders engaged in a more globally integrated fishery received higher incomes. There was no evidence that greater global market integration causes higher income inequalities within a fishery, an indication that linking local fisheries to global markets has potential positive income effects. We recommend disaggregated analyses in future studies of fishery income distribution in order to properly inform interventions within the context of specific fishery resource and respective market characteristics.Keywords: Markets and Trade, Fisheries Economics, Globalisation and Trad