The Impact of Minimum Wage Legislation
, World Economics, March 2017
Minimum wage policies are powerful political tools, but the economic effects are unlikely to be in the interests of society as a whole. Wages should be left to the free operation of market forces. Minimum wage rate policies are only effective in low-wage industries: the hotel sector labour market is used to develop the theory of minimum wages under different competitive conditions. The theoretical impact of a government-imposed minimum wage on the firms in an industry depends upon different competitive conditions in product and labour markets, but in most cases the number of firms falls as does the long-term demand for labour. In the UK, the Office of Budget Responsibility estimates that the National Living Wage will cut the total demand for labour hours by 0.4%, a reduction of 4 million hours of work a week causing 60,000 redundancies as a result of increased wage costs.
Asset Poverty in India
, World Economics, September 2013
In order to formulate policy to target the correctly identified rural poor in India, focus on an income poverty measure alone is insufficient. The purpose of this research is to study a new area of poverty measurement based on data that detail a household’s access to basic assets. The study has used the secondary data source provided by the Demographic and Health Survey (DHS) for the time period of 1992, 1998 and 2005. In order to construct the asset index the technique of multiple correspondence analysis is used. A discussion of trends in asset poverty in various states in India follows, together with the policies they need to adopt depending on their state of poverty.
Measuring Nations’ Economic Performance: The Report of the Commission on Economic Performance and Social Progress
F. Gerard Adams
, World Economics, December 2009
The Report of the Commission on Economic Performance and Social Progress considers the issues of establishing a broader measure of human well-being than the per capita GDP currently used. The report evaluates the possibilities for expanding the GDP concept and other measures of well-being, and for evaluating sustainability. The Commission recognises that it will not be possible to rely on one measure, recommending the use of a dashboard of various measures, including adjusted net saving.
The Economics of Happiness: Insights on globalization from a novel approach
, World Economics, September 2005
The economics of happiness is an approach to assessing welfare that combines economists’ techniques with those of psychologists, and relies on more expansive notions of utility than does conventional economics. Research based on this approach highlights the factors—in addition to income—that affect well-being. It is well suited to informing questions in areas where revealed preferences provide limited information, such as the welfare effects of inequality and of macroeconomic policies such as inflation and unemployment. One such question is the gap between economists’ assessments of the aggregate benefits of the globalization process and the more pessimistic assessments that are typical of the general public. The paper summarizes research on some of these questions, and in particular on those relevant to globalization, poverty, and inequality.
Measures of Progress and Other Tall Stories: From income to anthropometrics
& Brian Snowdon
, World Economics, June 2005
How should progress be measured? Today, economists and economic historians have available a rich array of data for a large number of countries on which to base their response to this important question. The need for alternative measures of the standard of living is particularly important for economic historians exploring the distant past where conventional estimates cannot be calculated. In this paper John Komlos and Brian Snowdon review several alternative measures of ‘progress’, both orthodox and unorthodox, including recent findings from ‘anthropometric’ history. The field of Anthropometrics blends history, economics, biology, medical science and physical anthropology and is now well established having helped to clarify ‘several questions important to economic historians’ including those related to slavery, mortality, inequality, and living standards during industrialisation. While malnutrition is the scourge of poor countries, obesity has become a major problem in many developed countries, particularly during the last quarter century. Research into the economics of obesity is now a burgeoning research area and the authors briefly review some of the major findings. Finally, Komlos and Snowdon comment on the recent literature on ‘happiness’. The achievement of a higher GDP per capita is, after all, not an end in itself, but a means to an end, that is, human happiness.
Is Economic Growth Good For Us?
, World Economics, September 2003
This article reviews Britain’s experience of economic growth in the twentieth
century. It argues that average living standards have risen much more rapidly than
is generally appreciated. The main reasons for this include increased life
expectancy which is highly valued by the public and downward bias in
conventional estimates introduced by traditional price deflators which do not
measure the true cost of living. The main policy implication of this analysis is the
need to think about the value of outcomes if appropriate public expenditure
policies are to be implemented.
A Multi-coloured GDP -or No New GDP at All?
, World Economics, September 2000
This is a reply to Giles Atkinson’s article ‘Re-thinking Economic Progress’ that appeared in the first issue of World Economics (Vol. 1, No. 1, January – March 2000). Atkinson discussed proposals for the construction of ‘green’ alternatives to Gross Domestic Product (GDP). In the same issue, Amanda Rowlatt in her article ‘Extending the UK National Accounts’, discussed the role of ‘satellite accounts’, including measures of effects on the environment. Professor Zimmermann’s contention is that the concept of a ‘green GDP’ would lead to a one-sided measure which cannot be used for the many purposes for which normal GDP as a comprehensive measure can be used. A GDP corrected for depletion of environmental stocks would have to be supplemented by one corrected for changes in human capital, another one dealing with health capital, etc. Completing the set leads to the older concept of Net Economic Welfare or something similar. Only this would again be a comprehensive measure and could replace GDP.
Extending the UK National Accounts: What can be done?
, World Economics, March 2000
The national accounts measure economic activity. The UK is developing "satellite accounts" which use the framework of the national accounts but aim to quantify other aspects of living standards. This article starts by comparing satellite accounts with the use of indicators to measure the quality of life. It then reports on progress with the UK environmental accounts, and with the household accounts, which measure the productive unpaid work done in the home. It concludes with a discussion of the scope for developing a wider range of satellite accounts for the UK.