Structural policies to promote sustainable long-term growth.
The economic performance of the United Kingdom was strong in the years before the financial crisis. GDP per capita increased at a strong pace, spurred by globalisation, and this improved the relative performance of the UK economy among OECD countries (OECD, 2007). Employment increased and labour productivity growth was strong, outpacing the euro area average and close to the US rate. However, performance was weaker in the years since the turn of the century (OECD, 2009). Despite the strong economic performance before the housing market began to weaken and the financial crisis hit, employment and labour productivity growth eased compared with the previous years, so the gap with the United States stopped closing and there remains a substantial gap with the best performing OECD countries in terms of both GDP per capita and labour productivity. That said, productivity growth tends to be procyclical, so an easing of its rate in the latter part of the economic cycle is to be expected. Although employment and participation have been relatively high overall, there have remained areas where labour market performance can be improved such as the outcomes for low-skilled workers and the re-engagement of disabled workers. Furthermore, some of the apparent progress in economic performance over recent years may have been unsustainable. Once the financial crisis is resolved, it will be important to set the economy on a sustainable and strong medium-term growth path to ensure that living standards are raised in the medium term.
Going for Growth (2009) identified a number of structural reform challenges that need to be tackled if the country is to resume its catch up with the leading OECD countries once the current downturn has ended. The priority areas include reforms to the disability benefit schemes, the school system, infrastructure, especially for transport, public sector services and land use planning:
* While the government has made a number of reforms to reduce numbers on disability benefits schemes, levels still remain high by OECD standards. The Pathways to Work programme was successfully trailed and is now being rolled out across the country. The reforms include a Work Capability Assessment, which focuses on the claimant's capacity to participate in the workforce and from 2010 will begin to be applied to existing disability benefits claimants, not just new claimants.
* Improving the educational attainment of young people is another important challenge if the United Kingdom is to improve living standards in the longer term, particularly in a globalised world with rapid technical change requiring an adaptable and well-educated workforce. Moreover, a more even performance across the student population will assist in addressing the trend of increasing inequality. International standardised tests show that the United Kingdom lags the better performing countries significantly, suggesting that considerably more needs to be done both in terms of overall performance and assisting the poorer performers. This issue is discussed in further detail below.
* The adequate provision of public infrastructure should be a priority, particularly in transport where road and airport congestion, and problems in the rail system impede business and constrain productivity. The government has already announced the bringing forward of planned public investment projects and has gone some way in adopting the recommendations of the Eddington Report on transport infrastructure. However, while the fiscal arrangements have lifted public investment, more will need to be done to meet the government's 2000 Ten Year Plan targets. The financial crisis poses a problem with the ongoing viability of Private Finance Initiative (PFI) funding of infrastructure projects. In March 2009 the government took steps to forestall these problems by offering to lend to PFI projects that were having difficulties accessing sufficient debt finance on acceptable terms.
* Like many OECD countries, the United Kingdom also faces the challenge of coping with an ageing population. Given the large role played by the government in the provision of health and other social services, ageing is a medium to long-term fiscal challenge. Part of the answer lies in improving the efficiency of the public sector, particularly the efficiency of the public provision of health services (Chapter 3).
Shortages of land for residential and commercial development have been one reason for the large price fluctuations seen in the house and commercial property market in the United Kingdom over the past few decades. The government has embarked on an ambitious programme of planning reform following publication of the planning White Paper in 2007 in response to the recommendations of the Barker Review of Land Use Planning (2006). The government has since passed the Planning Act 2008 which will set up a new Infrastructure Planning Commission, to be in place later this year, which will put in place a faster, more certain and transparent process for planning for major national infrastructure projects--the aim is to cut the time taken from application to decision to less than one year. In addition, the Planning Act will continue to introduce further reforms of the town and country planning system with the aim of making it more responsive and efficient. The government is also consulting on a new planning policy statement for economic development, with a view to making the planning system more responsive to market signals and demands in allocating land for development. The government also commissioned the Killian Pretty Review of Planning (2008) to investigate the opportunities for improving the planning application process for the benefit of all involved. The government's response to the review was published in March 2009. A responsive and effective planning system is essential to supporting the government's wider long-term goals of increasing housing supply and providing the infrastructure that supports it. The Barker Review also made numerous recommendations aimed at freeing up land for development. To this end the government has made some changes to the tax treatment of vacant and unused land, including the passage of the Rating (Empty Properties) Act 2007 which changes the relief from business rates in respect of empty property, but more radical measures could be considered including the introduction of a broader land-use tax and the freeing up of green belt land, much of which is of little ecological or recreational value, for housing and commercial development.(1)
Work prospects for the least skilled need to be enhanced
Coming into the current downturn, the unemployment rate in the United Kingdom was below the OECD average, and participation rates have continued to rise, particularly among older people and women. For the young, however, some more worrying indicators have begun to emerge. Whereas labour market improvements over the 1990s had brought the youth unemployment rate to below the OECD average by the start of the millennium, in recent years this trend has reversed and recent increases pushed the youth unemployment rate up to 14.4% in 2007, significantly above the OECD average and close to the euro area average (Figure 5.1, left panel). Relative to adult unemployment rates, youth unemployment rates have been trending up significantly, much more so than in other countries (right panel).
[FIGURE 5.1 OMITTED]
More positively, the incidence of long-term unemployment among youth has decreased by over 7 percentage points over the past decade. This decline has been assisted by the introduction of the New Deal for Young People (NDYP) scheme in 1998. It is a compulsory active labour market programme for youth, which allocates youth to employment or training options after 6 months into the unemployment spell. New Deal has limited the duration of unemployment for young people, which has considerable benefits. The total youth unemployment rate has, however, risen over the last few years, as has the number of young people who are neither in employment nor in education or training (NEET). In 2004 the government set a target of reducing the share of 16 to 18-year old youth who are NEET by 2 percentage points by 2010. There has been recent good progress against this target, with rates dropping from a peak of 10.6% in 2005 to 10.4% in 2006 and 9.4% in 2007. To meet the target rates need to hit 7.6% by end 2010. Clearly, the economic downturn poses challenges, but the government has articulated a NEET action plan and has funded additional places for 16-19-year olds in education and training. The government has also recently announced a new guarantee of 6 months of work or training for all 18-24-year olds unemployed for 12 months.
Within the youth cohort, it is low-skilled youth who have experienced the greatest labour market deterioration. A recent OECD study on Jobs for Youth in the United Kingdom (OECD, 2008a) used data from the British Household Panel Survey to obtain a measure of persistence of non-employment for youth aged 16-24 who have left education. This shows that the percentage of all 16 to 24-year olds not in education who were continuously non-employed has been roughly unchanged at around 6% since the first half of the 1990s. However, this stability masks divergent trends between skilled and low-skilled youth. Whereas youth with qualifications have experienced improved employment outcomes, low-skilled youth not in education have become even more likely to experience persistence in their non-employment status (Figure 5.2). Low-skilled youth are now more than five times more likely to be unemployed than their more skilled counterparts, a situation that has worsened over the past decade. The low-to-high-skilled youth unemployment ratio is now one of the highest in the OECD (OECD, 2008a).
[FIGURE 5.2 OMITTED]
Two potential explanations for the worsening labour market outcomes for low-skilled youth are the opening up of the labour market to migration from most of the new EU member countries and the introduction of the minimum wage.
Since 2004 there has been a considerable increase in inflows of work-related migrants, with free access to the UK labour market being granted to EU citizens from the A8 countries--most notably from Poland, Lithuania, the Slovak Republic, the Czech Republic and Hungary (in decreasing order of numbers). With the accession of Romania and Bulgaria (A2) to the European Union in January 2007, restrictions were placed on worker inflows from those countries which, as a result, have remained modest to date. Part of the motivation for putting these restrictions in place was a concern about possible negative impacts on the labour market. Indeed, while work-related immigration to the United Kingdom has undoubtedly brought benefits with foreign workers filling skill gaps, allowing closer matching of job vacancies and skills, and bringing in skills that complement those of native-born workers, there have been concerns that they have displaced native workers and may have reduced wages, particularly of young and low-skilled native workers. However research to date finds little evidence of any negative impact on the work prospects of young and low-skilled native workers (Blanchflower et al., 2007) despite A8 and A2 workers generally being young but on average better educated than natives of a similar age.
A minimum wage was reintroduced in 1999 and currently there are three rates: an adult rate, a development rate (for workers aged 18-21), and a rate for 16-17-year olds (introduced in 2004; younger than 18-year olds were exempt prior to 2004). The minimum wage is set annually on the recommendation of the Low Pay Commission (LPC). Currently the development and 16-17-year old rates are around 80% and 60% of the adult rate respectively, and the rates have increased at an average of around 5.1% per annum since being introduced. This is significantly higher than the rate of increase of average economy-wide earnings. Young inexperienced workers' chances in the labour market are particularly sensitive to wages, as implicitly acknowledged in providing a lower rate for younger workers. Setting the rate too high could damage work prospects (Neumark and Wascher, 2003; Neumark and Wascher, 2006). While some of the decline in income inequality and poverty in the United Kingdom in recent years may be attributable to the introduction of the minimum wage, a trade-off exists, particularly in terms of employment prospects for young and low-skilled workers. The minimum wage should be increased at or below the rate of increase in the median wage.
Better education achievement would help to narrow socio-economic gaps
Globalisation, together with skill-biased technical change, is changing the composition of jobs in advanced economies and raising the level of skills required to do them. Moreover, the current downturn is likely to accelerate the rate of structural change. This has increased the importance of educating a large proportion of the population to much higher standards than in the past. The government has acknowledged the importance of education for facilitating individual success in the labour market and has responded to this challenge by raising education spending, expanding the capacity of the education system in pre-primary education, encouraging young people to stay at school for longer, and developing new qualifications for 14 to 19-year olds.
Some successes have been achieved, such as an increase in the percentage of 16 and 17-year olds in full-time education. Nonetheless, the focus on raising the school leaving age and meeting performance targets in education may still be distracting attention from the more important goal of raising core literacy and numeracy achievement. Although education performance has been recorded as increasing on the basis of national examination results, there is some concern that these measures may have been biased by the presence of targets (Brook, 2008). Indeed, national examination results contrast with the results of international tests such as PISA and PIRLS, which suggest that the performance of young people in the United Kingdom remains close to the OECD average. For example, the PISA 2006 study suggested that 15-year olds in the United Kingdom perform significantly below the level of the best-performing countries, although they do perform above the OECD average in science (Figure 5.3, top panel). According to this study, almost 20% of young people performed at the lowest level of competence, versus only around 5% in Finland, the top performer (middle panel). Moreover, when compared with the PISA results from previous years, there may have been some deterioration over time.2 Dispersion in performance is also more marked than in all other OECD countries except the United States (bottom panel).
The performance of the UK's top students is good. Table 5.1, which compares the distribution of the UK's PISA scores with those of the top 7 countries, shows that UK pupils at the very top do relatively well (a gap relative to the top 7 countries of 1S to 18 points at the 95th and 90th percentiles), whereas the gap is wider further down the distribution (peaking at 35 points at the 10th percentile). The results illustrate that the UK education system is poor at ensuring good performance of pupils in the middle to bottom half of the education performance distribution. In order to achieve a higher overall performance students in the middle and bottom half of the distribution need to perform better.
[FIGURE 5.3 OMITTED]
Similar conclusions emerge from results of the PIRLS International 2006 survey of achievement in reading among children aged about 10-year olds. This study showed that England's performance had deteriorated relative to its performance in 2001. (3) Moreover, data on the distribution of the PIRLS results suggest that children in the middle and bottom half of the distribution are already falling behind those in the top performing countries even before they complete primary school. Consistent with the PISA results (shown in Table 5.1), Table 5.2 shows that reading performance among the most advanced English children was not much below that of the most advanced children in the top 7 countries (a gap of only 2 percentage points). Some positive reflection of policies to assist the poorest performers is evident in the fact that the biggest gap was not among the lowest performers. However, a much wider gap is evident among children in the middle and lower part of the distribution.
As long as the United Kingdom struggles to improve education achievement among the poorest performers, intergenerational social mobility is likely to remain lower than in many other OECD countries. A common measure of intergenerational income mobility is the fraction of relative income differences between fathers that are transmitted to their sons: the higher this elasticity, the lower is intergenerational income mobility. While this elasticity measure suggests relatively high social mobility in the Nordic countries, Australia and Canada, it shows the lowest degree of mobility for the United Kingdom (Figure 5.4).
In recognition of these issues, the government has introduced a number of policies to lessen poverty, and improve equality of opportunity. These policies have included the introduction of a minimum wage, the working and child tax credits, and pension credit. Some progress is reflected in the fact that compared with the year 2000, there is now a smaller proportion of households that are very poor, and poverty rates have fallen for vulnerable groups including children and pensioners. But at the same time, there has been a further shift in the spatial segregation of the population, with increasing geographical income polarisation in recent years (Dorling et al., 2007). An important channel for improving intergenerational social mobility will be raising the proportion of students from low socio-economic backgrounds who obtain a sufficiently high-quality compulsory education to continue to university study. (4) Given the large variance in educational outcomes in United Kingdom, continuing to improve access to pre-primary education, which has been shown to increase future education attainments particular for children from disadvantage backgrounds, would be helpful (d'Addio, 2007).
[FIGURE 5.4 OMITTED]
A number of recommendations for raising education achievement and breaking the cycle of inequality were outlined in the previous Survey. In particular, it was concluded that policy makers should consider reducing the current focus on tests and targets and introduce changes to the way funds are allocated to schools, in order to raise the relative performance of pupils in the middle and lower half of the distribution. Progress in implementing these, as well as other reforms suggested in the previous Survey, is summarised in Table 5.A1.
Box 5.1. Recommendations to address longer-term structural issues * Progress toward reducing numbers on disability benefits should continue, including the extension the Pathways to Work programme to the stock of recipients. * Improvements in public infrastructure are required to boost productivity, particularly in transport. More will need to be done, particularly to meet the government's 2000 Ten Year Plan target. * The improvement in the land use planning procedures should be continued to ensure that future demand for land is met, especially for housing purposes. * Raising training and education levels remains a priority to lift productivity, assist the low-skilled, help to narrow socio-economic gaps and promote social mobility. Given the large variance in educational outcomes, continuing to improve access to pre-primary education, which has been shown to increase future education attainments particularly for children from disadvantage backgrounds, would be helpful. ANNEX 5.A1 Progress in structural reform This annex reviews actions taken on recommendations from previous Surveys. Recommendations that are new in this Survey are listed in the relevant chapter. Recommendations Action taken since the previous Survey (September 2007) Education Continue to promote a focus on Basic functional skill the acquisition of core skills requirements to be imposed for pupils at all age levels and from 2010. ensure that this focus is not compromised by the goal of expanding the average number of years of schooling. Design all education targets in Through the achievement and a way that limits the potential attainment tables and Ofsted for gaming, by ensuring an reports, many aspects of schools' interactive performance performance are already made management system that captures public. The government is the complexity of the education consulting on proposals for a process. new school report card that will strengthen accountability to parents and local communities by making broader information about schools' performance and achievements more readily available to parents in a simpler, easily understood format. Encourage the highest quality All eligible schools can offer teachers to move to the most benefits to teachers taking up disadvantaged schools. posts from September 2009: A golden handcuff of 10 000 [pounds sterling]in return for staying in the school far three years for newly recruited teachers; Access to a government-funded network of teachers which will offer experience sharing, discussion groups and subject specific activities Promote the transition to a The Department for Children, better allocation of funds by Schools and Families (DCSF) is taking deprivation-targeted conducting a review of the funding out of the formula used formula for distributing the to determine the Minimum Funding main school grant-the Dedicated Guarantee. Permit smoothed Schools Grant (DSG). It will transitions to the improved consult on options for changing formulas. the formula in the summer of 2009 with the intention of bringing in changes from the next Spending Review period. Transition arrangements form an important work stream in the review. Evaluate the pros and cons of The government is reviewing the formula for distributing the DSG. The aim is to develop a single, transparent formula that will be available for use in distributing the DSG to local introducing a differentiated authorities. The Review will voucher system of funding consider additional educational needs: which pupils are affected; what indicators are best used to (as in Chile) where pupils from distribute money for these poorer families receive vouchers pupils; whether in the context of that are valued more highly than the personalisation agenda it is those for the general population. possible to attach money more directly to deprived pupils, for example, as they move round the system. Consider modifications to the The Working Tax Credit (WTC) tax and benefit system that would tax credit, over the longer term. reduce the marginal effective 1 200[pounds sterling] in April tax rate faced by lone parents 2008, balanced by a small decrease in the tax credits and one-earner couples when withdrawal rate from 37 to 29%, further enhancing participation extending their hours or when incentives for low income families. The number of families progressing in work. facing the highest effective tax rates (above 70%)remains less than half its level in 1998. Since November 2008 lone parents claiming benefit, whose youngest child is aged 12 and over, can no longer receive Income Support solely on the basis of being a lone parent. They can claim Jobseeker's Allowance or another benefit if appropriate which require being actively preparing for or searching for work. This is being rolled out to stock claimants from March 2009. Improve incentives for labour Implicit taxes on work for force participation by second second earners are significantly earners by reducing the high reduced, particularly for low implicit taxes on returning to earners, through the childcare work caused by high child-care element of the Working Tax cost. Credit. It provides support for up to 80% of childcare costs up to limits of 175-300 [pounds sterling] per week for families with one/two or more children. The percentage of eligible childcare costs covered rose to 80% in April 2006. Improve incentives to up-skill The new Free Childcare for by making the child-care element Training and Learning for Work of the Working Tax Credit scheme offers free childcare to available to low-skilled people potential second earners undertaking approved courses of potential second earners study, as well as those who are entering training. The Sixth working. Form College Childcare Scheme will pay up to 175 [pounds childcare support for parents on approved training courses. The Childcare Grant can pay up to 85% of a higher education student's childcare costs. Extend the Pathways to Work The government has rolled out scheme on a mandatory basis to student's childcare costs. the stock of existing claimants. remaining 60% of the country. The Welfare Reform Green Paper (2008) set out plans to widen mandatory participation in Pathways, so that all those under 50 who fall in the "Work Focussed Group" of claimants of Employment Support Allowance (ESA) will have to participate in Pathways. The most severely disabled, the Support Group, will be able to participate in Pathways on a voluntary basis. Improve the monitoring of the Incapacity Benefit has been of their entitlement to sickness replaced by ESA for new pay and benefits and make the claimants (from October 2008). medical assessment of benefit In parallel with the claims earlier. introduction of ESA, a new eligibility test conducted at the start of a claim will be introduced (the Work Capability Assessment (WCA)). A 10% reduction in those claiming ESA as a result of the WCA is expected. The WCA will be applied to the stock of claimants over the next five years. Pay more attention to the early The new WCA focuses on what an sickness stage of the large individual can do. This number of people claiming information is available for incapacity benefit from a advisors to work with claimants non-employment status. at their Work Focussed Interviews, where the advisor and claimant can discuss and agree what kind of steps could be taken to help the claimant back into work. Consider rolling out the City The fifteen pathfinder pilots Strategy "pathfinders" have been extended for a further programmes on a wider basis. two years, to end in 2011. With Also since programmes tend to the introduction of the Flexible become less effective over a New Deal in October 2009, period of successful increased flexibility at the period of successful local and sub-regional levels implementation, new approaches will be explored: from should be developed and consulting local partners on how evaluated. programmes are commissioned (level one); integrating innovative services to local proposals or a sub-regional approach (level two); potentially extending devolution to give local areas a role in letting contracts (level three). Improve statistical monitoring The Office for National of the stock of migrant labour Statistics is currently engaged by "cross-checking" registered in a substantial programme that workers on the Worker includes taking forward the Registration Scheme against recommendations of the 2006 other databases (e.g. taxpayers). Interdepartmental Task Force on Migration Statistics and the more recent Treasury Select Committee report "Counting the Population". The programme is expected to lead to significant improvements in both quality and timeliness of data on migration and the population more generally. Productivity Facilitate the entry of new The government is considering businesses by reforming planning proposals to maintain the "town regulations, especially in the centre first" approach, while area of retail trade, and improving its effectiveness by abolish the "needs test" for removing the current need test market demand. Put more weight and replacing the existing on economic issues in the impact assessment with a new planning process. test, a key feature of which is a broader focus with emphasis on economic, social, environmental and strategic planning impacts and their impact on car use, traffic and congestion. Free-up land for development by Planning authorities review reconsidering the boundaries of green belt boundaries when the "green belts" in implementing planning policy. fast-growing areas. The government is currently reviewing Regional Spatial Strategies (RSSs) forthe South East, South West and East Midlands all of which contain green belt review recommendations. Consider further incentives for The Planning Act 2008 provides land development particularly powers to establish a new local those with the potential to charge (the Community contribute to the funding of Infrastructure Levy) which local local infrastructure. authorities will be able to apply to new development. Receipts from the new charge must be applied to the provision of infrastructure needed to support growth. Ensure that infrastructure The government will implement investment does not fall short five year transport plans to of that envisaged in the provide greater certainty. This government's Ten Year Plan for follows the example of the Transport. Consider ways to "control periods" for rail. improve the predictability of Targeted spending in key areas transport funding. Follow was announced in January 2009: through with targeted spending for example detailing a National in key strategic growth areas. Roads Programme of up to 6 billion [pounds sterling] to increase capacity and reduce congestion in the worst affected areas. Continue to examine the options A demonstration project to trial for addressing road congestion the technology and processes and environmental impacts that could underpin more including the implementation of sophisticated road charging a road-pricing system on a systems will be underway by national scale. spring 2009. In addition, the government is bringing forward schemes where capacity can be increased at peak times through the opening of the hard shoulder. Raise the skill level of the Subsidy rates for publicly workforce by focusing adult funded training--basic skills training on the most and first level 2 qualifications disadvantaged groups. When are fully funded and level 3 is evaluating progress, focus more part funded (50% by 2011). on broader measures. This Information is collected encompasses improving the regarding attainment, volumes quality and volume of and quality of the various qualifications, as well as the skills programs. The method for employment outcomes from measuring overall progress is acquiring skills and the agreed PSAs indicators for qualifications, and international 2011 and the Leitch 2020 vision. measures of adult cognitive In terms of employment outcome skills. measurements considerable work is underway to enable this to occur in the Integrating Employment and Skills trails and once data sharing legislation is approved (July 2009) measures of employment outcomes from acquiring skills and qualifications and progression measures will be able to be put in place. Assess the efficiency of fiscal An independent study in 2006, support to R&D, such as the R&D commissioned by the UK tax credit, over the longer term. government, concluded that a sufficiently long time series of data was not yet available to support robust estimates of the effect of R&D tax credits. The government remains committed to undertake a full evaluation of the schemes as soon as sufficient data becomes available. Tax competition Continue to cut the statutory Reforms to corporation tax corporate tax rate and broaden announced in March 2007 included the base. a two percentage point reduction in the main rate to 28%,along with a reduction in the rate of capital allowances to 20%, the phasing out of some other capital allowances and the introduction of an Annual Investment Allowance of 50 000 [pounds sterling]. Look into the merit of moving The Finance Bill 2009 proposes to a dividend exemption system. an exemption from tax for most foreign dividends received and a Targeted Anti-Avoidance Rule will apply to protect against avoidance activity. Reduce the complexity of the Since 2007, four reviews to tax code. simplify specific areas of tax policy were conducted and more than 50 measures to simplify the tax system for business brought forward. The government is reducing the administrative burden of the tax system. Miscellaneous Monitor closely the speed and The Planning Act 2008 will set efficiency of the planning up a new Infrastructure Planning system and progress towards the Commission. It will plan major government's regional housing national infrastructure projects targets. and aims to cut the time taken from application to decision to less than one year. In addition, a new planning policy for housing has been adopted aimed at ensuring more land is brought forward to respond to housing demand. Consider imposition of some In 2008 the UK enacted a form of mandatory pension programme of pension reform, savings in the medium term. following recommendations made by the Pension Commission. These comprise: a statutory duty on employers to automatically enrol eligible workers into workplace pension schemes which must meet minimum qualifying requirements; and the public provision of a trust based multi-employer pension scheme for those otherwise without access to a qualifying scheme. The introduction of the employer duty to auto-enrol eligible workers is planned for 2012.
Blanchflower, D.G., J. Saleheen and C. Shadforth (2007), "The Impact of the Recent Migration from Eastern Europe on the UK Economy", Discussion Paper, No. 17, Bank of England, London.
Blanden, J., P. Gregg and L. MacMillan (2007), "Accounting for Intergenerational Income Persistence: Noncognitive Skills, Ability and Education", The Economic Journal, Vol. 117, No. 519, Blackwell Publishing.
Blanden, J. and S. Machin (2004), "Educational Inequality and the Expansion of UK Higher Education", Scottish Journal of Political Economy, Vol. 51, No. 2, Blackwell Publishing.
Brook, A. (2008), "Raising Education Achievement and Breaking the Cycle of Inequality in the United Kingdom", OECD Economics Department Working Paper, No. 633.
Department for Communities and Local Government (DCLG), (2008), Facing the Housing Challenge: Action Today, Innovation for Tomorrow, July 2008, London.
d'Addio, A. (2007), "Intergenerational Transmission of Disadvantage: Mobility or Immobility Across Generations? A Review of the Evidence for OECD countries", OECD Social, Employment and Migration Working Paper, No. 52.
Dorling, D., J. Rigby, B. Wheeler, D. Ballas, B. Thomas, E. Fahmy, D. Gordon and R. Lupton (2007), "Poverty, Wealth and Place in Britain, 1968 to 2005", Joseph Rowntree Foundation.
IEA (International Association for the Evaluation of Educational Achievement) (2003), "PIRLS 2001 International Report: IEA's Study of Reading Literacy Achievement in Primary Schools", Mullis, I.V.S., et al. (eds.), International Association for the Evaluation of Educational Achievement and International Study Center, Lynch School of Education, Boston College.
IMF, (2008b), World Economic Outlook, October 2008.
Institute of Fiscal Studies (2009), The IFS Green Budget, January 2009, London.
Micklewright, J. and S.V. Schnepf (2006), "Response Bias in England in PISA in 2000 and 2003", Research Report, No. 771, Department for Education and Skills, DfEs Publications, Nottingham.
Neumark, D. and W. Wascher (2003), "Minimum Wages, Labor Market Institutions, and Youth Employment: A Cross-National Analysis", Mimeo, March 2003.
Neumark, D. and W. Wascher (2006), "Minimum Wages and Employment: A Review of Evidence from the New Minimum Wage Research", National Bureau of Economic Research Working Paper, No.12663.
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OECD (2008a), lobs for Youth: United Kingdom, OECD, Paris.
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(1.) The recent "Facing the housing challenge" (DCLG, 2008) report announced a number of measures aimed at increasing the supply of housing including assisting first-home buyers, funding for local councils that are facilitating the supply of housing, and funding to purchase unsold stock from house builders for affordable homes.
(2.) Average scores in the 2006 PISA study were below those in the 2000 and 2003 studies. However, because of a low response rate in the previous years (see Micklewright and Schnepf  for details), the 2000 and 2003 results are generally excluded from international and across-time comparisons. Thus, it is only possible to say with confidence that the UK's sample results in the 2006 study reliably reflect those for the national population with the level of accuracy required by the PISA study.
(3.) In the 2001 study England ranked 3rd and Scotland 14th out of a total sample of 35 participants. In the 2006 study England ranked 19th and Scotland 26th out of a total sample of 45 participants. Similarly, in the 2003 TIMSS study of mathematics skills among 9-10-year olds, England ranked tenth and Scotland 18th out of a total sample of 25 participants. Note that in both the PIRLS and the TIMSS studies the participant samples included developing as well as more advanced countries.
(4.) Between 1981 and the late 1990s, young people from the poorest 20% of families increased their university graduation rate by just 3 percentage points, compared with a rise in graduation rates of 26 percentage points for those born to the richest 20% of parents (Blanden and Machin, 2004). To date, the academic A-level track at secondary school has been the main conduit to university, but students from low socio-economic backgrounds are less likely to have the grades to enter this track. With the introduction of the new Diplomas, care should be taken to ensure that socioeconomic segregation does not increase between A-level and less academic tracks.
Table 5.1. Average PISA scores by percentile ranking: Top seven performers versus the United Kingdom (1) 5th 10th 25th Mean Average PISA score top 7 countries 370 407 468 530 United Kingdom 335 372 435 502 Gap: Top 7--United Kingdom 34 35 32 28 75th 90th 95th Average PISA score top 7 countries 595 646 675 United Kingdom 571 628 660 Gap: Top 7--United Kingdom 24 18 15 (1.) Measured by the unweighted average of the various percentile scores for mathematics, reading and science. The top seven performers are Finland, Korea, Canada, New Zealand, Netherlands, Australia and Japan. Source: DECD (2007), PISA 2006: Science Competencies for Tomorrow's World, OECD Publishing. Table 5.2. Percentages of students reaching the PIRLS 2006 reading benchmark Top seven performers versus the United Kingdom International Benchmark Advanced High Average percentage reaching England 17 57 in top 7 countries (1) Percentage reaching benchmark in 15 48 England Gap: Top 7--United Kingdom 2 9 Intermediate Low Average percentage reaching England 88 98 in top 7 countries (1) Percentage reaching benchmark in 78 93 England Gap: Top 7--United Kingdom 10 5 (1.) Measured by the unweighted average of the percentage of pupils reaching each international benchmark. The top seven performers were Singapore; the Russian Federation; Canada, Alberta; Bulgaria; Canada, British Columbia; Canada, Ontario; Luxembourg and Hong Kong SAR. Source: International Association for the Evaluation of Educational Achievement (2007), PIRLS 2006 International Report.
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|Title Annotation:||Chapter 5|
|Publication:||OECD Economic Surveys - United Kingdom|
|Date:||Jun 1, 2009|
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