Winning the crap trains Olympics Top of the Charts 13 December 2024 Mike Brewer Morning all, The year certainly appears to be hurrying to its close, with the sun setting – by my reckoning – at about 10.30am through most of this week. We’ve got a couple of treats in store for you, dear readers, in our upcoming editions. I hope you are sharpening your quiz pencils. Until then, we’ve got some cracking papers that range from British railways, to Portuguese (ahem) ‘creative accounting’ to American elections (no, not that one). Have a grey-t weekend, Mike Interim Chief Executive Resolution Foundation Participation patterns. 40.5 per cent of MPs elected in July 2024 were women (all 263 of them). That’s a big step up from 1919 when Nancy Astor was elected, and means our parliament is starting to look more like our country – which is undoubtedly a good thing. This paper demonstrates just how much of a difference it might make to the way we’re governed. The research finds that the more women are present in a legislative body, the more likely each woman is to actively participate. They base these conclusions on digitised information from over 40,000 meetings of US city councils (with the important caveat that this is largely based on much smaller legislatures than the House of Commons). Within these councils, it turns out that replacing a male councillor with a female councillor has an outsized impact on the share of motions proposed by women. This trend is particularly noticeable when it leads to a ‘critical mass’ of women, as opposed to a few ‘token’ members, as this makes it easier for the women to overcome the social norms which inhibit their participation. Railways, ranked. Anyone who has the joy of commuting into work by train will have asked themselves the question “Is my useless [other adjectives are available] local rail operator the worst in the world?”. Well, here is your chance to find out, via the clever chaps over at Transport & Environment who have ranked 27 European rail operators. Spoiler alert! Team GB have secured Gold and Bronze in the crap trains Olympics… GWR win bottom place, with fares two-and-a-half times the average price of train tickets across Europe. Next is Eurostar, which we are counting as French even if it uses our train tracks, then Avanti, whose tickets are one-and-a-half times the average. And it gets better! The only leaderboard Avanti and GWR find themselves at the top of is in compensating passengers for delays and cancellations (credit goes to the DfT’s Delay Repay scheme for that one). The research shows it is possible to offer a better experience at a lower cost – but will our soon-to-be-nationalised operators deliver? Reorienting research. We have often commented on the range of subjects studied by economists, and so it’s great to have some actual facts from this paper which maps the evolving emphasis of nearly 30,000 articles across economic journals published between 1900 and 2014. So, what’s changed? Economics shifted from a focus on state intervention and trade institutions to paying much more attention to market-oriented topics around the 1970s. The focus has shifted again since then, with more papers looking at the behavioural foundations of economics and civil society. What might have driven this change? Larger data sets have helped, as has the growing recognition of the influence of non-market interactions on the economy. What I’m taking from this is that economics can move with the times, and there’s plenty more work to do. Tactical tax. Lots of economists study tax, but few of them generate such eye-popping findings as this banger of a paper. It uses Portuguese admin data to show that when people switch from being employees to business owners their personal consumption ostensibly drops by a third. Is this sudden burst of abstemiousness driven by the spend-thrift concerns of a responsible business owner? Er, no. First point to note is that these drops in spending are concentrated in grocery purchases, clothes, fuel and hospitality – all categories relatively easy to pass off as business expenses. Coincidence? Well, the authors also cannily investigated how business hospitality spending behaves around the owner’s and their spouse’s birthdays – it turns out that it spikes exactly then. Hmmmmmm. Amazingly, the tax revenue lost through this mis-categorisation of what is (surely in reality) personal spending is worth a jaw-dropping 1 per cent of Portuguese GDP and means the estimated Gini coefficient of income inequality comes out at about 1 percentage point lower than it should be. There’s no such thing as a free lunch – even when you’re writing it off as a business expense. Austerity’s aftermath. 15 years since the start of austerity, we’re still learning about its (often dire) knock-on effects. Alice Evans takes a parallel look at two studies on the wide-ranging impacts that closing police stations (deterrent) and youth clubs (prevention) had on crime in London, especially among young British men. Under austerity, 70 per cent of London’s police stations closed, and there was an 11 per cent rise in violent crime in the areas that lost their police presence. At the same time, one-in-three of London’s youth clubs permanently closed, and in those areas youth crime rose by 14 per cent, with first-time criminals seeing the biggest rise on record. But what about the value for money gains from cutting services? Well, every £1 saved by closing youth clubs incurred a subsequent loss exceeding £2.85 thanks either to increased criminal justice costs or reduced career earnings. And every £1 saved by closing police stations cost as much as £7 from the knock-on effects of higher crime. Something to consider as the Government fires the starting gun on the Spending Review next year. Chart of the Week Politicians love to talk about “hard-working families”. Today’s Chart of the Week – taken from our latest Unsung Britain report (& see event here) – tells us what these hard-working families actually think about their work, and whether this is different for those at the top and bottom of the pile. Turns out that actually liking the job you do is everyone’s top priority. And despite the constant froth about people ‘skiving’ at work, “an easy workload” isn’t a priority in any workers’ minds. “Good pay” also ranks relatively low. Does this prove that work brings wider fulfilment than just your pay cheque? Or does it mean that after almost two decades of stagnation, Britain has basically given up on decent pay? There are also some subtle but important differences between rich and poor. Workers from high-income families particularly value having ownership of the work they do (i.e. using their abilities or initiative). Those from lower-income families put an even higher priority on something more fundamental: security. The Employment Rights Bill currently going through Parliament should help to deliver on the security front, by offering enhanced protection against unfair dismissal and a right to guaranteed hours. These measures are loudly opposed by some employers, but this evidence suggests they’ll be better received by hard-working families across lower-income Britain.