Morten Ravn's picture
Affiliation: 
University College London
Credentials: 
Professor of economics
Head of Department

Voting history

Levelling Up Productivity Gaps in the UK

Question 2: Which policies could best help reduce regional productivity disparities?

Answer:
Investment in skill development and education
Confidence level:
Confident
Comment:
See answers to previous question. It is a mix of factors but I believe education is a key factor.

Question 1: What is the primary factor driving regional productivity disparities in the UK?

Answer:
Other or no opinion
Confidence level:
Confident
Comment:
I believe it is a mix of factors rather than a single one. Education and infrastructure differences are important elements and these interact with agglomeration effects (sorting). It takes a well educated workforce for companies to invest in high productivity activities, a well educated workforce is the outcome of education, employment opprtunities, and agglomeration, and without the right infrastructure, the returns on such investments may not be high. But, at the end of the day, without investing in education, I think that addressing other margins will have little effectiveness in addressing the disparity of productivity and living standards.

Prospects for UK Economic Growth

Question 2: What is the most important contribution economic policymakers can make growth in the UK over the next decade? 

Answer:
Other or don't know
Confidence level:
Confident
Comment:
I think a broad suite of policies are needed included some of those mentioned such as investment in human capital, foreign trade, and reforms to welfare systems providing both better social insurance and improved access and incentives to a good life for those coming from more challenging socio-economic backgrounds. There may also be a need for considering regulatory frameworks ensuring a better functioning market economy. On the positive side, the UK economy has some fundamental strengths which it can build upon and which possibly would increase the payoffs of undertaking these policies.

Towards a High-Wage, High-Productivity Economy

Question 2: What is your evaluation of the following statement: “A well-designed government-stipulated wage increase can lead to higher productivity”?

Answer:
Disagree
Confidence level:
Very confident
Comment:
I answered this in the previous question. Such policies need to be accompanied by other policies and this will take time.

Question 1: Which of the following statements most closely reflects your understanding of the relationship between productivity and wages.

Answer:
Wage increases can in some cases increase long-run productivity
Confidence level:
Very confident
Comment:
Wage increases - for example through high(er) minimum wages - may spur sustained productivitiy growth but only to the extent that they spur investment in skills and in technology which, in most cases, go hand in hand. Investment in skills requires government investment in education of the population from an early age throughout to apprentices, university graduates, and further adult education. This requires aboloshing the UKs dual education market which caters for those who can invest in private education mainly. It requires providing families with child care to prevent skill loss during times out of the labor market and social safety nets for those whose investments do not pay off. It requires a flexible labor market. These are all policies seen in Scandinavia which also rely on low levels of government debt, efficient pension systems, and this takes time. Just increasing real wages by themselves may not do much apart from exporting jobs and motivating firms to invest in labor saving technologies. A high wage economy without investment in skills will force individuals with lower skills out of the workforce. There might be shorter run motivating factors of higher wages but they cannot sustain longer run productivity enhancements, Britain's main problem.

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