Dr Phil Ball

Sovereign Wealth Funds (SWFs) are drivers of change in the international financial system. We make a compelling case for speaking up more about the market-shaping power they wield to create the right incentives to support longer-term societal goals like tackling climate change, through their capital allocation decisions, investment criteria and transparency requirements in using public money.

This is in addition to the roles they play in providing a buffer against volatility in markets… Show more

Sovereign Wealth Funds (SWFs) are drivers of change in the international financial system. We make a compelling case for speaking up more about the market-shaping power they wield to create the right incentives to support longer-term societal goals like tackling climate change, through their capital allocation decisions, investment criteria and transparency requirements in using public money.

This is in addition to the roles they play in providing a buffer against volatility in markets in which their country of domicile have a competitive advantage, but also in enabling these wealthy countries to spread their bets around the world.

We particularly emphasised the roles and responsibilities of funds, and the need for a greater degree of scrutiny and governance around environmental and social responsibility. Show less

Despite a strong recovery in employment relative to the US, the remarkable underperformance of UK productivity (measured by output per hour, see figure 1) in the wake of the recent Financial Crisis has provoked a debate about the underlying factors and the appropriate policy response.

This has prompted the government to respond with last Parliament’s UK Productivity Plan, a commitment to increase infrastructure spending at AS16 and a January 2017 industrial strategy green paper and… Show more

Despite a strong recovery in employment relative to the US, the remarkable underperformance of UK productivity (measured by output per hour, see figure 1) in the wake of the recent Financial Crisis has provoked a debate about the underlying factors and the appropriate policy response.

This has prompted the government to respond with last Parliament’s UK Productivity Plan, a commitment to increase infrastructure spending at AS16 and a January 2017 industrial strategy green paper and public consultation to promote key industries. The appropriate policy response depends on which are deemed the most plausible explanations of the UK’s productivity puzzle. Show less

Immigration is a complex issue, which does not lend itself to simple economic analysis. Conventional wisdom suggests that the main driver of migration is higher wages in the host than source country, however this does not accurately characterise reality. Other factors are likely to be of importance. These factors include labour market conditions, as well as laws and policies in both the source and host countries, financial constraints, transport and the costs of buying and selling a house… Show more

Immigration is a complex issue, which does not lend itself to simple economic analysis. Conventional wisdom suggests that the main driver of migration is higher wages in the host than source country, however this does not accurately characterise reality. Other factors are likely to be of importance. These factors include labour market conditions, as well as laws and policies in both the source and host countries, financial constraints, transport and the costs of buying and selling a house (Glover, et al, 2001). Thus immigration cannot be seen determined solely by formal immigration controls of the host country. Furthermore, immigrants are attracted to areas where there are other similar immigrants already, which makes a proper analysis of what motivates the immigration decision difficult.

This report focuses on legal immigration. What matters most for the economy is net immigration: the difference between those coming in and leaving the country. Reducing net immigration to manageable levels is a key initiative of the current administration. Whilst encouraging skilled immigration, this policy also targets skill shortages in key areas like public service provision whilst restricting unskilled immigration in general. The impact of immigration on the wages and employment prospects of natives is a key question from a political as well as public viewpoint as Government policy towards immigration has the potential to tip election outcomes. Immigrants are regularly accused in the popular press of taking people’s jobs, and of putting pressure on public services including the welfare system. However, not all immigrants are alike, and whether they make more tax contributions to public services than they take out is just as important for public welfare (after tax wages). Show less

Immigration is a complex issue, which does not lend itself to simple economic analysis. Assuming Perfect Competition, zero transaction costs, rational economic agents, and free movement of factors of production, individuals would maximise the present value of their future income stream by moving to where their marginal productivity is the highest (Glover, et al, 2001). This implies that the main drivers of migration are economic, however this does not accurately characterise reality. Other… Show more

Immigration is a complex issue, which does not lend itself to simple economic analysis. Assuming Perfect Competition, zero transaction costs, rational economic agents, and free movement of factors of production, individuals would maximise the present value of their future income stream by moving to where their marginal productivity is the highest (Glover, et al, 2001). This implies that the main drivers of migration are economic, however this does not accurately characterise reality. Other factors are likely to be of importance. These factors include labour market conditions, as well as laws and policies in both the source and host countries, capital constraints, transport and transaction costs (Glover, et al, 2001). Thus immigration cannot be seen determined solely by formal immigration controls of the host country. Moreover, the immigration decision is not a “one shot game.” It is the product of a dynamic decision making process, which may depend on previous migration decisions or the migration decisions of other economic agents, which makes a proper static analysis of this phenomenon difficult. The immigration decision is also linked to networks, immigrants are attracted to areas where there are other similar immigrants already.
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In this report I focus on the impact of legal immigration, with emphasis on the impact on wages and unemployment of the native population as well as on the tax and welfare system. The following section details theoretical considerations, whilst the next contrasts key available evidence and draws policy conclusions. Show less

I assess the Stepping Stone effect of low-skilled jobs for the Skill Mismatched. Does Skill Mismatch carry worse implications for workers in skilled or unskilled occupations? How does this vary with the composition of the local labour market, industry growth and over the business cycle? The ``hidden brain drain" refers to the negative economic efficiency implications of Skill Mismatch. This phenomenon is likely to arise if the existing skills base is not fully exploited and measures are not… Show more

I assess the Stepping Stone effect of low-skilled jobs for the Skill Mismatched. Does Skill Mismatch carry worse implications for workers in skilled or unskilled occupations? How does this vary with the composition of the local labour market, industry growth and over the business cycle? The ``hidden brain drain" refers to the negative economic efficiency implications of Skill Mismatch. This phenomenon is likely to arise if the existing skills base is not fully exploited and measures are not made to develop future skill potential. If the long-term economic prospects of the (un)employed are to be ensured, then moving them (out of unemployment and) into high quality employment is key not just for their well being, but also for the nation in terms of aggregate welfare gains. If the extend of skill mismatch increases during economic downturns, then this could profound implications for aggregate matching efficiency during recovery. If skill-mismatch is persistent, in that mismatched jobs do not act as Stepping Stones to better matches, then a situation where skilled vacancies are created that can't be filled with appropriately trained workers is likely to arise. Furthermore, if downturns are sector-specific, then sub-regional differences in industrial composition suggest a differential impact of economic downturns within a country. All in all, this phenomenon has the potential of profound negative implications for unemployment persistence, long-term economic policy as well as public opinion. Show less

Unemployment has a strong influence on the economic prospects of the UK economy as a whole. The effect of unemployment can be long-lasting, and as an experience can imply lasting effects on future employment outcomes. In order to avoid unemployment, individuals may decide take jobs they are overqualified for as a stepping stone to a better match when such positions become available. If over-qualification is a negative productivity signal, then this could reduce future career mobility. This… Show more

Unemployment has a strong influence on the economic prospects of the UK economy as a whole. The effect of unemployment can be long-lasting, and as an experience can imply lasting effects on future employment outcomes. In order to avoid unemployment, individuals may decide take jobs they are overqualified for as a stepping stone to a better match when such positions become available. If over-qualification is a negative productivity signal, then this could reduce future career mobility. This thesis aimed to gain some insights into the impact of where individuals live, within the UK, on their unemployment and employment experiences. With that in mind, detailed data sets were constructed in order to answer the questions of interest. Moreover, flexible econometric techniques were employed. Show less

I test the hypothesis that unemployment experienced in high unemployment regions is less likely to be viewed by employers as a negative productivity signal, and more as a characteristic of the region. This predicts that unemployment's short-run negative wage effects will be mitigated if experienced in high unemployment regions. If so, then what long-term implications does this have for future wage growth (Wage Scarring)? How important is regional heterogeneity in driving wage outcomes?… Show more

I test the hypothesis that unemployment experienced in high unemployment regions is less likely to be viewed by employers as a negative productivity signal, and more as a characteristic of the region. This predicts that unemployment's short-run negative wage effects will be mitigated if experienced in high unemployment regions. If so, then what long-term implications does this have for future wage growth (Wage Scarring)? How important is regional heterogeneity in driving wage outcomes? Continuous work-life histories are matched to the regional context in which individuals reside. This novel data set permits control for the timing of career disruptions, as well as regional location at the time of displacement, whilst searching and at re-employment. Persistent wage penalties are found, conditional on previous labour market status. Seminal UK research concludes that the first spell of non-employment carries the highest penalty. Considering unemployment and inactivity, no reduction in the penalty associated with incidence of inactivity is found. Strong regional differences are found in the impact of redundancy on wage growth. This is contingent on labour market tightness and urbanity of the region in which unemployment was experienced. Redundancy followed by unemployment in areas of high economic activity is equally damaging for future earnings potential, independent of age. Moreover, robust long-run evidence is found supporting the main hypothesis in the UK, on average and for over 45s made redundant in their previous jobs. Relative to job-to-job transitions, redundancy implies a 3.7% long-run wage loss if unemployment spells were experienced in high unemployment regions, independent of age. However, if experienced in low unemployment regions this implies a 3.9% wage gain for those under but an 11.8% wage loss for those over 45, four years later. Show less

Ball (2010) tests for regional variation in the impact of unemployment experience on future wage growth. In order to investigate this issue, continuous work-life histories were constructed using the British Household Panel Survey. In this document I refer to the sample selection used in Ball (2010). These steps can be generalized to any sample selection strategy. A rules-based approach was adopted to ensure consistency in data set construction. Individuals' labor market histories are prone to… Show more

Ball (2010) tests for regional variation in the impact of unemployment experience on future wage growth. In order to investigate this issue, continuous work-life histories were constructed using the British Household Panel Survey. In this document I refer to the sample selection used in Ball (2010). These steps can be generalized to any sample selection strategy. A rules-based approach was adopted to ensure consistency in data set construction. Individuals' labor market histories are prone to overlap due to the timing of interviews in the BHPS varying over the survey period. Given the complexity of this procedure and to aid replication, this paper details the data preparation steps followed. Show less

This co-authored paper investigates the extent to which differences in the composition of individuals and disparities in the regional labour market shape individuals’ unemployment durations. A novel approach to dataset construction is employed. Individual unemployment insurance records, available by postcode district, are linked to the regional context in order to address the research question. The link is established using the spatial information available in the National Statistics Postcode… Show more

This co-authored paper investigates the extent to which differences in the composition of individuals and disparities in the regional labour market shape individuals’ unemployment durations. A novel approach to dataset construction is employed. Individual unemployment insurance records, available by postcode district, are linked to the regional context in order to address the research question. The link is established using the spatial information available in the National Statistics Postcode Directory. This dataset allows for time-varying regional heterogeneity to be incorporated into the analysis. By employing flexible econometric techniques (censored quantile regression and quantile decomposition), we find the impact of regional labour market is mainly limited to claimant durations of up to 150 days. This suggests that regional policies may be ineffective for improving employment prospects of the long-term unemployed. Show less

A one-to-one link is developed between overlapping sub-regional entities using geographical tools newly available to the Economic Research Community. The aim of this project is to
create a database exploiting the geographical variation in publicly available data, in order to
better control for regional heterogeneity. The database covers the period 1995 to 2007, and
includes regional identifiers at the postcode district, Local Authority, NUTS3 and Travel-To-
Work Area levels of… Show more

A one-to-one link is developed between overlapping sub-regional entities using geographical tools newly available to the Economic Research Community. The aim of this project is to
create a database exploiting the geographical variation in publicly available data, in order to
better control for regional heterogeneity. The database covers the period 1995 to 2007, and
includes regional identifiers at the postcode district, Local Authority, NUTS3 and Travel-To-
Work Area levels of aggregation. Roughly 160 controls are available to the researcher. This
data could be used to provide new insights for Regional Policy Analysis. An example of an
application of this resource in the context of unemployment duration can be found in (Ball
and Wilke, 2011) for the UK. Show less

The World Trade Organisation’s (WTO) transition and establishment in the 1995 Uruguay Round promoted a surge in antidumping use amongst non-traditional users, mostly developing countries, whereas prior to this traditional users were the most frequent users of the mechanism. Identifying whether heterogeneity exists between traditional and new user motives for filing activity is thus of great interest, and a motivation for this study. This study’s results suggest that changing economic factors… Show more

The World Trade Organisation’s (WTO) transition and establishment in the 1995 Uruguay Round promoted a surge in antidumping use amongst non-traditional users, mostly developing countries, whereas prior to this traditional users were the most frequent users of the mechanism. Identifying whether heterogeneity exists between traditional and new user motives for filing activity is thus of great interest, and a motivation for this study. This study’s results suggest that changing economic factors are relatively more significant for new AD users, although it is hard to disentangle the political and economic influences on the mechanism. Political distortions are highly significant across the board, with domes-tic politics relatively more prominent amongst traditional users suggesting a general protectionist motive. Consistent with Messerlin (2004) both traditional and new users seem to target lower-income countries, although exclusion of China and many lower-income countries is likely to be a determining factor in this result. Given a better quality dataset, and more sophisticated techniques, one could extend the analysis to draw more valid inferences and policy implications. Show less

This study looks at the implications of the international trade-inequality relationship for the regional distribution of income across the UK. The Heckscher-Olin-Samuelson (HOS) framework predicts that countries’ trade specialisation will be determined by their relative factor endowments, and that international trade will result in a reallocation of income from the scarce to the abundant factor within a country. The theory predicts that income inequality will increase in skill-abundant… Show more

This study looks at the implications of the international trade-inequality relationship for the regional distribution of income across the UK. The Heckscher-Olin-Samuelson (HOS) framework predicts that countries’ trade specialisation will be determined by their relative factor endowments, and that international trade will result in a reallocation of income from the scarce to the abundant factor within a country. The theory predicts that income inequality will increase in skill-abundant (developed) countries, and decrease in less skill-abundant (developing) countries (LDCs). Given that relative skill-intensities vary across the UK, one would expect the relative increase in income inequality to be larger in more developed regions.
Data was collected to assess the significance of this hypothesis of the the uneven impact of trade across the UK regions. Given the observations, the robustness of the relationship was tested by using alternative specifications. The results and observations question the validity of mainstream international trade theory in explaining the regional impact of international trade across the UK, over the sample, period of observation, and within the confines of the study. The defined regions of the UK appear to be very distinct, and seem not to operate as a coherent group. The findings point to the further devolution of fiscal discretion to the regional level as a possible policy implication, although a better defined dataset, and longer observation period would be required if one were to strengthen this argument.

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