Martin Ellison's picture
Affiliation: 
University of Oxford
Credentials: 
Professor of economics

Voting history

The Economic Cost of School Closures

Question 3: To what extent will school closures increase gender inequality due to unequal gender distribution of the burden of school closures?

Answer:
To a small degree but persistently
Confidence level:
Confident
Comment:
The labour market outcomes of new mothers are heavily influenced by what happens in the years that immediate follow childbirth. If mothers retain a connection with the workplace, for example by working at least part-time, then it is possible to return to their previous career trajectory. However, if they spend time out of the labour force then they typically do not return to their previous position. In part this may be a conscious choice, but to the extent that it is forced upon mothers (e.g. by the lack of affordable childcare or other factors) it is likely to engender unwanted gender inequality. The danger with school closures is that it will lead to more of the latter compulsion. Gender norms are still deeply embedded in society, and the burden of childcare will often fall on the mother to the detriment of her career relative to men.

Question 2: To what extent will school closures increase inequality in human capital development?

Answer:
To a small degree but persistently
Confidence level:
Confident
Comment:
The UK already has significant within cohort inequality, with pupils having widely different educational experiences depending on socio-economic class, location, parental resources and engagement, and so on. School closures exacerbate these differences and add inequality across cohorts to the mix. A pupil from a disadvantaged background loses out two-fold, both relative to their peers is less-disadvantaged areas and relative even to other generations of disadvantaged pupils. Much will depend on the response of government policy, which unfortunately does not bode well for inequality (not providing laptops for disadvantaged pupils etc.). If the government was sufficiently committed to its “levelling up” agenda then the increase in inequality could conceivably be offset.

Question 1:What damage will school closures have on economic growth over a 10-15 year horizon?

Answer:
Minor
Confidence level:
Very confident
Comment:
There are not enough children in school for the damage to be large. Sianesi and Van Reenen (2003, Journal of Economic Surveys) estimate that an extra year of average education of the labour force raises output/capita by 3-6% and growth by 1%. The current UK workforce is about 30 million and just short of 9 million children are in UK schools, so even if all pupils lost a whole year of education the effect on GDP and growth would be limited. In 10 years’ time almost all of those affected by the school closures will be in the labour force, but there will be 20 million still in the labour force who are unaffected, so a generous upper bound on the size of the effect is 1/3 of what Sianese and Van Reenen estimate, i.e. GDP some 2% lower and growth reduced by 1/3%.

COVID-19 and UK Public Finances

Question 1: How urgently should the UK government address the rise in public debt?

Answer:
There is no need to take or announce any budgetary actions to reduce the deficit or the public debt until the end of the pandemic
Confidence level:
Very confident
Comment:
Now is not the time to worry about repaying the debt. HM Treasury has more important things to worry about.

Question 2: What is the best way to (eventually) reduce public deficits and debt?

Answer:
None of the above, other, or no opinion
Confidence level:
Very confident
Comment:
None of the options is anywhere near a silver bullet. Tax increases and public spending cuts are likely to damage the economy, at least in the recovery phase. The call for inflation coupled with fiscal repression is superficially attractive but my research on managing the UK National Debt (with Andrew Scott, forthcoming in American Economic Journal: Macroeconomics) suggests this is unlikely to be successful. Whilst it is true that inflation reduced the debt to GDP ratio by 137.3 percentage points after WWII, that was almost exactly offset by nominal interest payments pushing up the debt to GDP ratio by 139.2 over the same period. The real interest rate on the national debt was therefore almost zero (thanks to financial repression, otherwise maybe it would have been +2%) but it was far from being negative. To put it simply, with inflation and financial repression we can more or less stand still on the debt to GDP ratio, but we will not reduce the debt by much. The problem is that nominal rates rise with inflation, so any refinancing of debt becomes more expensive and gains are reduced. Consols are similarly unlikely to work, since if they are issued with the express aim of inflating them away in the future then investors will demand hefty inflation risk premia. This leaves GDP growth as the best and probably only medicine for substantially reducing deficits and debts. BTW, we no longer have consols in the UK so I don't know what the current yields are in the text.

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