July 2019 newsletter: One participant’s view of the Conference

This is an edited version of a blog posted by Rain Newton Smith, Chief Economist at the CBI, to her CBI colleagues shortly after the Conference. It’s interesting that Rain notes a change in presentations over the years. ‘These were people passionate about their work, modest in their assumptions but clear about how their findings could help to change the world.’ Might this have anything to do with the increasing emphasis on ‘impact’ in the Research Evaluation Framework? Readers’ views (as always) would be welcome.

After a draining few weeks staring into the precipice of a no deal Brexit, I feel refreshed, renewed and rejuvenated. And it’s all down to the Royal Economic Society’s Annual conference. The economics profession has come under a lot of criticism lately. We failed to spot the global financial crisis, and the UK’s productivity puzzle continues to confound economists with no real answer as to why the UK has faced a lost decade of rising living standards. Our forecasts are ‘wrong’ and we’ve failed to get our voice on the economic damage of Brexit heard. There isn’t enough diversity of thought in the profession, and it is failing to attract young women to study economics creating concerns about the pipeline and robustness of policy decision-making.

Yet a few days on the campus of the University of Warwick for the Royal Economic Society’s Annual Conference, shows how wrong this impression is. When I last attended this conference at Warwick, I was a young graduate, fresh-faced at the Bank of England and working on how new technologies (back in the ‘00s’, it was all about the internet and the falling price of computer processing power) were changing business investment. But the lectures I attended back then did not seem to reflect the real world. There were too many over-simplified mathematical models which did not reflect human behaviour and apart from the world of central banking, there were precious few reflections on what these models or results meant for policy decisions.

But twenty years later, I was amazed at the range of papers on offer. I have to confess, (and this is a bit sad!), I felt like a kid in a sweet shop, spoiled for choice. Did I attend the session on how funding for Sure Start centres in the UK had affected social mobility? Or how programmes targeted at women in developing countries could affect teenage behaviour? What impact does free school meals have on childhood obesity? What about universal free childcare on long-run health outcomes? That many of these sessions ran in parallel made my choices even tougher.

Gone are the days of clever PhD students who couldn’t explain their results to an audience, hiding behind equations. These were people passionate about their work, modest in their assumptions but clear about how their findings could help to change the world. Newer techniques were also in evidence. Researchers at NESTA, the innovation foundation, were using big data analytics to compute a new index of skills in real time, using artificial intelligence to search job adverts, to see what skills businesses are asking for right now when they are looking to recruit.

I attended a great session by Anna Vignoles (University of Cambridge), Jack Britton (IFS) and others on the returns to higher education funded by the Institute for Fiscal Studies. The new LEO (Longitudinal Education Outcomes) data allows researchers to trace individuals from their results at school, through to which university and subject they choose (if that’s their path), through to how much they earn later in life from HMRC data. So, you can calculate the return an individual gets from a degree and control for their results at school. It shows that for most people, university pays for itself, but you do have to be selective on what you choose to study and where. It was very encouraging to see that women studying economics was second only to medicine in terms of the boost to earnings five years after graduation.

Another fascinating session looked at the rise of hate crime in the UK after the EU referendum and also whether President Trump’s use of social media has had an impact on hate crimes in the USA.  Recorded hate crime in the UK rose significantly after the referendum, and often more in areas that voted remain. The referendum result may have provided information on ‘social norms’ which meant some individuals felt more license to commit crimes where they would have held back previously. Across the pond, to the USA and a paper looking at Trump and his impact on reported hate crimes. While hate crime under Trump overall wasn’t necessarily higher than under previous  presidents, anti-Muslim hate crimes have risen, and this work showed a link to the rise in social media and Trump’s tweets. As with previous developments in mass media, from the printed press or other, the media can be used for good or for ill, but it certainly has an impact.

And if people feel there aren’t enough women leading the dismal science, the session on women in economics should change that. With female chief economists at the OECD, the EBRD, the IMF, the World Bank, it’s hard to say that's genuinely the case. And the profession is waking up to the fact it needs to talk about how to make it more attractive for young women to study economics in the first place, choose it as a profession and use it to make a difference to the world around them. For anyone thinking that economics could be for them, or anyone curious about the world around them and how data and analysis can be used to make better decisions, have a look at the papers from the conference.  We probably still need more papers that look at the economics of climate change but one thing is clear to me — we need more time for experts in our lives, not less.