Departmental news

In July 2020, Chancellor Rishi Sunak requested a review of capital gains tax. The recommendations of the review were published on 11 November, and draw significantly on research by Arun Advani, CAGE Impact Director and Assistant Professor of Economics at the University of Warwick.

Advani’s research, co-authored with Andy Summers (International Inequalities Institute, London School of Economics and CAGE Research Associate) and Adam Corlett (Resolution Foundation), revealed that capital gains are a regular and substantial source of remuneration for many of the wealthiest individuals. As capital gains are taxed at a lower rate than income tax, many are choosing to receive income as capital gains and in many cases pay lower taxes than those on average incomes.

Advani’s research with Summers also revealed that capital gains have been masking rising inequality in the UK over the past decade. While the incomes of the wealthiest individuals have stagnated over the last ten years – in a similar way to those on lower incomes – remuneration from capital gains has increased, widening the gap between rich and poor.

The chancellor’s review was compiled and written by the Office of Tax Simplification. Arun Advani was a member of the consultative committee for the report, which draws directly on his research and recommendations. Most significantly, it calls for capital gains tax rates to be aligned more closely with income tax to prevent behavioural responses by the wealthiest to avoid income tax.

Dr Advani is also presenting findings from his recent research on capital gains and the taxation of wealth at the Treasury Committee’s Parliamentary Inquiry into Tax after coronavirus in November.

Read the Research

Advani, A. and Summers, A. (2020), How much tax do the rich really pay? New evidence from tax microdata in the UK, CAGE policy briefing, no.27

Advani, A., and Summers, A. (2020), Capital gains and UK inequality: new evidence from tax microdata, CAGE policy briefing, no.19

Advani, A. and Summers, A. (2020) Capital gains and UK inequality, CAGE working paper, no.465

Advani, A., Summers, A., and Corlett, A. (2020), Who gains? The importance of accounting for capital gains, Resolution Foundation report

Advani, A. and Summers, A. (2020), Capital gains and hidden inequality, Advantage Magazine, Austerity 10th Anniversary Special Issue

As the health and wellbeing of our students and colleagues remains our top priority, we continue to review all of our work at Warwick in relation to Covid 19. We wish to make current and prospective students aware of the following key advice and decisions we have made in addition to Public Health England (PHE) and Foreign and Commonwealth Office (FCO) advice as we ready ourselves for more significant impact.

University Advice for Current Students

• The University will remain open
• There will be no face to face teaching, assessments or exams for the rest of the year
• Students who cannot go home will be able to use campus accommodation if required
• The Library and study spaces remain open for the time being
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• Find out more about the University’s mitigating circumstances procedure
• Keep an eye on MyWarwick and the MyWarwick app for updates

Please continue to pay close attention to further updates that we will send to you by email, supported by the University regularly updated FAQs online.

Departmental Advice for Economics Students

Term 3 will commence on Monday 20 April 2020.

The Department is in the process of exploring options for online learning, teaching, assessment (including examinations) and academic and pastoral support from the rest of this academic year and will be advising you of arrangements as soon as we are able to do so and so would advise you to keep monitoring this webpage.

In the meantime, you should continue your usual preparation for your learning in all of your modules ahead of the examination period.

Other sources of information and support available to you are listed below:

• Pastoral and Wellbeing Support
• Mitigation and Covid-19
• All staff will continue with their Advice and Feedback hours through Term 3, although we are looking at how we can arrange this online and further details will follow.
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In this period, please do take care of yourselves, your families and your communities. Please ensure you continue to follow your national and local guidance in relation to the Covid-19 virus.

Advice for Prospective Students

We would like to re-assure you that we will be open for business as usual and that we are working hard to provide an excellent programme of study for all new students hoping to study with us in 2020/21.

The University of Warwick are monitoring the situation closely and will update their FAQs as more information becomes available. Our advice is that you check back with us regularly for the University’s latest advice and guidance.

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The International Journal of Economic Theory issued a Festschrift in honour of Warwick Professor Roger E.A. Farmer this year. The Festschrift reviews and pays tribute to Roger’s ideas, his career and his intellectual legacy up to the present time.

What research projects are you currently involved with?

I have three or four projects in play at the moment. Some of these projects are theoretical in nature. Some of them are empirical. All of them are related to a theme that I call the indeterminacy agenda in macroeconomics.

Economists have long argued that business cycles are driven by shocks to the productivity of labour and capital. The models they developed have no room for the independent views of market participants to influence outcomes. In contrast, the indeterminacy agenda uses multiple-equilibrium models to integrate economics with psychology and, according to this agenda, the self-fulfilling beliefs of financial market participants are additional fundamental factors that drive periods of prosperity and depression.

Some of my theoretical work in this vein studies inefficiencies that are apparent in asset markets. Some of my empirical work in this vein involves an explanation for the disappearance of the Phillips Curve, a relationship that is supposed to characterise the connection between inflation and unemployment.

Let me begin with my work on asset markets, (Farmer 2018). Financial economists ask if the asset markets are efficient. The answer is yes – and the answer is no. The reason it’s yes and no is because economists define efficiency in different ways.

The Nobel Prize in 2013 was won by three economists working on the theory of financial markets. Two of these economists, Gene Fama and Robert Shiller put forward conflicting theories of market efficiency. Gene Fama was awarded the Nobel Prize for saying that financial markets are efficient, and Robert Shiller was awarded the Nobel Prize for saying that financial markets are not efficient. Fama defined efficiency to mean that you can’t make money in the financial markets – he called that informational efficiency. Shiller meant that it’s not possible for there to be an intervention by government that would make everybody better off. That second concept is called Pareto efficiency after the Italian social scientist Vilfredo Pareto.

In my view, the financial markets are probably informationally efficient: they are not Pareto-efficient. And that means that there are government interventions that can improve the welfare of all of us. My research explains how that can be.

My explanation is that when you trade in the financial markets, you’re not just trading with other people who are alive today. Almost all of the people who will buy or sell the assets that you’re buying or selling now are not yet born. In my book Prosperity for All I call that idea the ‘absence of pre-natal financial contracts.’ The fact that we cannot trade with those who are not yet born opens the door for Pareto inefficiencies. I’ve just written a piece that’s related to this idea for Project Syndicate where I suggest that national treasuries could exploit Pareto inefficiencies to raise revenue. Importantly, these revenues could pay for social care programmes, such as the NHS and pensions, without raising taxes.

My empirical work related to indeterminacy is on the relationship between unemployment and inflation. Here, I have shown that the indeterminacy agenda provides an explanation for a puzzle that has been perplexing central bankers in developed economies for more than a decade. According to New-Keynesian economics (this is the theory that guides policy at the Bank of England and at other central banks around the world), the fact that unemployment is currently at all-time lows should be causing a resurgence of inflation. But inflation has stubbornly refused to appear. In a 2011 paper (Farmer 2011), I developed the Farmer Monetary Model, a theory of inflation based on the indeterminacy agenda. In a series of papers with co-authors and graduate students (Farmer and Plotnikov 2018, Farmer and Nicolò 2018, 2019) we show that the Farmer Monetary Model provides a better fit to the data and a better understanding of the relationship between inflation and GDP growth than the conventional New-Keynesian model currently in use at the Bank of England.

What interested you about this area of research?

For forty years, macroeconomics has been dominated by a battle between classical ideas emanating from the universities of Minnesota and Chicago, and New Keynesian ideas, emanating from MIT. In the past decade or so, MIT has been dominant, and MIT trained economists have promoted an agenda that evolved out of an interpretation of Keynes developed by the MIT economist Paul Samuelson. According to this interpretation, the economy is Keynesian in the short run, when prices are sticky, and classical in the long-run, when all prices have had time to adjust. The MIT machine steamrollered over all opposition and became the dominant interpretation of Keynesian economics.

A parallel, but very different, macroeconomic agenda developed in the 1980s at the University of Pennsylvania. This is where I began my career. According to this alternative agenda, the economy is typically characterised by multiple equilibria and, as a consequence, economic fundamentals alone cannot explain the macroeconomy. We must also introduce psychology. This is what I did in my book The Macroeconomics of Self-Fulfilling Prophecies, which is still used today by graduate students around the world. I have been working on the idea that psychology matters for economics ever since, and I have shown that the indeterminacy agenda can explain most of the anomalies that Keynes sought to understand in a much more parsimonious way than the MIT New-Keynesian approach pioneered by Samuelson.

What I learned from my days at Penn, was that models of multiple equilibria, when combined with relatively minor adaptations of standard microeconomic theory, have a great deal of explanatory power. I have used the tools I learned at Penn to understand why prices appear sticky and why monetary policy is so powerful in influencing unemployment and real economic activity. I have also pushed the Penn school beyond its original bounds by showing how the indeterminacy agenda can explain involuntary unemployment and the stagnation that characterises great depressions.

What interested you about this area of research?

The economy is a complex evolving set of interlocking institutions and anyone who attempts to understand those institutions should probably begin from a place of humility. I nevertheless believe that economics as a tool has had some notable successes in helping to improve people’s lives.

Consider the theory and practice of central banking as it evolved in the United States. The Federal Reserve System was created in 1913, and at the time, the idea that a central bank should intervene in the financial markets by setting a price was considered to be radical. The Fed has not always been perfect in the way that it has managed the economy, and it has made a number of mistakes. But the history of the Fed is one of learning how to implement policies that are an improvement, in my view, over the unmanaged monetary system that preceded its creation.

Since the Great Depression, beginning with the intervention in macroeconomics that followed Keynes’ General Theory, we’ve been a lot more successful at managing economic fluctuations and at keeping inflation under control, than we were in the 18th and 19th centuries. There have been fewer recessions and the ones that have occurred, with the exception of the Great Depression, have been smaller in magnitude. That is a consequence – in my view – of good policy.

It doesn’t mean we don’t make mistakes – we do – and sometimes they are big mistakes. But there’s a steady improvement as we learn more about the way the economy works. Consider, for example, the experience of inflation targeting, which was first formally adopted by the Reserve Bank of New Zealand in 1990. Informally, it began shortly after Paul Volcker’s accession as Chairman of the Fed in 1979. The period, from 1979 to 2007, was one of relative stability as countries throughout the developed world brought inflation down from double digits in the 1970s to the low single digits where it has been for a couple of decades. In 2007 we hit an unexpected road bump, as the policy that had been used to control recessions was ineffective as the interest rate hit zero and could be lowered no further. We have learnt from that bump that central banks need a second way of intervening to prevent recessions over and above the policy of moving around a short-term interest rate. My theoretical and empirical work explains what that second policy should be and why we need it.

In my book Prosperity for All I argued that financial instability is a major cause of the mass human misery that we experience during big recessions. Many voices are arguing for governments to spend more to get out of a recession. I disagree. Although fiscal expansion might work in the short-run, it is slow to act. In my recent books, academic papers and op eds, I argue that there is an alternative more effective policy. The Bank of England should actively intervene to stabilize the financial markets.

Under a regime of inflation targeting, central banks are charged with moving around interest rates. Some central banks, the ECB is an example, have a single target: to stabilise inflation. Other central banks, the Bank of England and the Fed are examples, are charged with hitting a secondary target: to maintain real economic stability and high employment. We have known for a long time that a policy maker who wishes to hit two targets needs two instruments. One is not enough. The momentum and time is right to adopt a new tool.

It has often been argued that the second instrument should be fiscal policy; that is, expanding government expenditure or changing tax rates when a recession hits. The problem with that advice is that fiscal policy is a slow and clumsy instrument. In my view, it would be more effective to use interest rate policy to target inflation and to use active management of the financial markets to control unemployment.

A lot of the arguments I’ve been making for the past thirty-five years have begun to find their way into the public consciousness and into the current economic narrative of journalists, politicians and economists alike. Will we actually move to the full extent of managing the equity markets in the sense of targeting a return to equity? My guess is that it will take another major recession before that idea becomes accepted. And make no mistake, there will be another major recession: the only uncertainty is when it will occur.

Why did you decide to become an economist?

I stumbled into economics through having good teachers - I started out studying econometrics at the University of Manchester. I moved to Canada following Michael Parkin and David Laidler, two of my teachers at Manchester who moved to the University of Western Ontario (UWO) in the late 1970s. They encouraged me to follow them and they offered me a fellowship to study with them in Canada. When I arrived, I found that UWO had a stronger group in macroeconomics than in econometrics and I switched fields. I have never looked back.

Why did you join the Economics department at Warwick?

Like many people before me, I left the UK for the excitement of a foreign country. But I always intended to return. My plans changed once I had a son who grew up in California and I discovered that, once you put down roots, it’s harder to leave.

Now my son is grown up and is an economist in his own right and I have fulfilled my dream of returning to the UK. I am actively contributing to the public debate with the goal of influencing economic policy for the better.

Warwick has always had a strong connection with the Bank of England and with policy-making in Westminster. It’s an extremely strong and vibrant department. And it’s a place where there is scope for interacting with very smart graduate students, sharing my perspective on macroeconomics, and influencing how students think about the world.

Further Reading:

• Roger Farmer and Platonov, Konstantin, Animal spirits in a monetary model. European Economic Review, 2019, 115. pp. 60-77.
• Roger Farmer and Giovanni Nicolò, Some International Evidence for Keynesian Economics Without the Phillips Curve, The Manchester School (In Press).

related:https://warwick.ac.uk/fac/soc/economics/news/staff-profiles

What research projects are you currently involved with?

Broadly speaking I’m doing research on behavioural and experimental economics, and public sector economics.

I recently focused my research on behavioural and environmental economics. I looked at the impact of different monetary incentives (i.e. a nudge and a shove) on individuals’ recycling behaviour and how this links with people’s ‘green identity’, measured in my research via an ‘environmental morale’ index. Results showed that the nudge was much more effective than the shove to increase individuals’ willingness to recycle, especially when focusing on people with high environmental morale. This suggests that the same incentive may not be effective for all individuals - i.e. one size does not fit all! I also looked at individuals’ time preferences over different goods (i.e. monetary, environmental and health gains and losses) and how this can be affected by intrinsic motivation to conserve the environment. Results suggest that environmental morale is likely to increase ‘impatience for action’ to conserve the environment. This dimension of time preference is relevant when it comes to explain differences between discount rates in different domains, which questions whether we should continue to rely on one discount rate for cost-benefit analysis.

I am currently involved in a research project on closing the gender competition gap. Modern societies are characterised by large differences between men and women with regards to income, status in society, and success in the labour force, which research has largely attributed to differences in competition. Specifically, women are generally less likely to be engaged in competitiveness. This asymmetry has not only raised significant questions about the fairness of the selection process but also the allocation of opportunities. With a laboratory experiment, we are trying to test whether a simple psychological trick - i.e. priming (or nudging) an individual prior to competition - will reduce this gap and mitigate the undesired effects of differences in competition preferences.

Another area of research on which I am particularly interested in is taxation and tax evasion. Together with other colleagues, I am working on a project aimed at analysing the discrepancy between the way people think about tax evasion and benefits fraud and their actual behaviour. They normally say that it’s wrong, but when it comes to actual behaviour they behave in a completely different way. Using the British Social Survey data (2016), we are looking at how moral beliefs are likely to influence the decision to evade taxes and commit benefits fraud. Most of the literature in this area of research has been focused e.g. on the role of social norms to predict individuals’ behaviour towards tax evasion and benefits fraud. By comparison, little attention has been paid to the relevance of morality and to the way in which moral beliefs are likely to influence the decision to engage in illegal actions such as tax evasion and benefit fraud. The project questions the relevance of moral beliefs and the different ways in which moral beliefs are likely to inform perceptions of the intrinsic value of honesty.

I guess, the reason why I decided to become an economist is because I was interested in getting a better understanding of the complex society in which we live, and economics helped me to make genuine progress on this!

What impact do you hope your research will have on society?

I like to look at things that may have an impact on public policy, especially this idea of nudging individuals to change attitudes or behaviour. For example, research suggests that a possible way to nudge individuals is by changing their default options. An application of this is the opt-out system introduced for organ donations, where citizens do not have to opt-in for organ donations (as it is currently done in England), but they are automatically registered as donors unless they choose to state otherwise. Following the example of Spain and many other European countries (e.g., Italy and Portugal) where the opt-out-system has been successfully implemented, from spring 2020 the UK will also introduce a similar system. This simple example shows how little things like changing a default option can really make a big difference in our lives.

I hope that my research will inform policy makers and provide evidence to design better policies.

One of the challenges we face as behavioural economists is the generalisation of the findings of our studies, which is commonly known as the external validity of a scientific study. A possible way to overcome this problem is to replicate the study in different contexts with different individuals. However, even by doing so, it might be the case that you end up with completely different results. Having said this, behavioural economics has widened scholars’ conceptual toolkit, encouraged research that is concerned with actual behaviour, and fostered a ‘test and learn’ culture among governments.

What interested you about this area of research?

I became interested in public sector economics because of the implications of Government policies on our daily life, especially in terms of efficiency and equity. I initially focused my attention on tax evasion as, along with the obvious problem of the underfunding of the government, tax evasion raises fundamental questions about the fairness of the tax system. I found it fascinating to try and understand why people (do not) pay taxes and how they trade-off their honest behaviour with the risks they incur when they decide not to be compliant with their ‘social responsibilities’.

This is what motivated me to focus on behavioural economics to analyse what motives drive individuals’ behaviour, especially when this departs from theoretical models and ‘rational’ behaviour advocated by neoclassical economics. Behavioural economics has changed the way we look at the public sector. Public sector economics has made great strides in understanding ‘market failures’ (in the case of traditional public sector economics) and ‘government failure’ (in what is known as the public choice approach) focusing on a rational representative individual -i.e. homo economicus. However, experiments after experiments in behavioural economics have shown that people are likely to depart from predicted rational behaviour in many ways, which lead to a number of anomalies that characterise a more realistic economic actor -i.e. homo realitus. This has introduced a new dimension into the problem as Governments now are facing the challenge of designing policies able to correct both ‘market failure’ and ‘individual failure’ (i.e., failure here refers to the idea that people behaviour departs from rational behaviour).

The Thaler and Sunstein’s (2008) idea of ‘nudging’ individuals to make better decisions has also opened a debate on how to use nudging as an effective policy tool. There is a lot of work still to be done here and this is what makes this area of research particularly attractive to me.

Why did you decide to become an economist?

When I left high school, I knew I wanted to continue to study, but I did not know what degree to choose. I finally chose a broad social science degree where we had the chance to study different subjects, including economics, which I did not study in high school. What I really enjoyed in high school was mathematics, which is somehow related to economics. After the first two years of the degree, we could specialise in one of our favourite disciplines, and I chose economics as I loved studying microeconomics – and I still love it!

Economics offers practical tools to help people with real problems they face in the world every day. It offers an opportunity to understand simple concepts such as unemployment or public debt in the news. It helps us to make decisions in our daily life such as engaging in a particular financial activity or not. Economics is also about understanding political debates which affects how people votes and ultimately public policies. I guess, the reason why I decided to become an economist is because I was interested in getting a better understanding of the complex society in which we live, and economics helped me to make genuine progress on this!

Why did you join the Economics Department at Warwick?

The quality of the department makes it a very stimulating place where to do research. Economics at Warwick is very strong in applied microeconomic, public policy analysis and there is also an increasing number of colleagues working on behavioural and experimental economics. A strong group in all these areas was a big factor.

Even the teaching side is strongly correlated with research. This is a big plus not only for our undergraduate and postgraduate students, but also for us as academics as research-led teaching brings into classes our enthusiasm and expertise in the field and allows us to talk about the recent developments of our research.

Recent Publications

• Lory Barile (with J. Cullis and P. Jones), Time Preference for Investment in the Environment: The Impact of Intrinsic Motivation. Economic Issues, Vol. 23(2), 2018.
• Lory Barile (with J. Cullis and P. Jones), Individual Failure and a Behavioural Public Sector Economics. The Cambridge Handbook of Psychology and Economic Behaviour (2nd ed.). Cambridge: Cambridge University Press
• Lory Barile (with J. Cullis and P. Jones), Will One Size Fit All? Incentives Designed to Nurture Pro-social Behaviour. Journal of Behavioral and Experimental Economics, 57, 9-16, 2015.

We were delighted to welcome Professor James Alan Robinson back to Warwick last Friday as he was here to deliver the final Keynote Lecture at the CAGE conference - Evidence from 10 Years of Research which was also announced by Professor Sascha Becker (Deputy Head of Department and Research Director of CAGE) as the Inaugural Nick Crafts Lecture set up in honour of CAGE and its outgoing Director - Professor Nick Crafts.

Jim completed his Master's degree at Warwick Economics in 1986 and is one of our most notable alumni. He is a prominent political scientist and economist who has conducted influential research in the field of political and economic development and the factors that are the root causes of conflict. His research interests are also in comparative economics with a particular interest in Latin America and Sub-Saharan Africa. Jim is Director of the Pearson Institute for the Study and Resolution of Global Conflicts based at the University of Chicago and previously, he was the Wilbur A. Cowett Professor of Government at Harvard University and a faculty associated at Harvard's Institute for Quantitative Social Science and the Weatherhead Center for International Affairs.

Professor Sharun Mukand commented on Jim’s lecture:

"It was a privilege to have Jim provide us with an early preview of his forthcoming book in the Crafts lecture. Jim was especially excited that with the lecture he was able to honour Nick's work and legacy at Warwick''.

Jim delivered a lecture entitled "The Narrow Corridor: States, Societies and the Fate of Liberty" based on the forthcoming book he co-authors with Daron Acemoglu (MIT), to be published by Penguin Random House in September, in which they explore the question why liberty flourishes in some states but fails in others and how it can overcome new threats.

Their first book ‘Why Nations Fail: The Origins of Power, Prosperity and Poverty’ became an international bestseller and won numerous prizes.

The seventh edition of Warwick Economics PhD Conference was held during 3-4 June 2019. The event was organised by PhD students with the help of the Marketing team and with financial support from the department.

In addition to the generous financial support from the department, CAGE provided funding for a newly-launched research grant for perspective applied projects by PhD Students.

The conference is organised by PhD students of the Economics department at Warwick annually and this year, received about 200 applications from graduate students of leading research institutions across the world. A multi-stage selection process, involving a scientific committee consisting of Warwick faculty members and PhD students, helped in process of whittling down these high-quality applications to just twenty – 12 seminar presentations and 8 poster presentations.

Prof. Debraj Ray set the ball rolling with his engaging keynote address. The talk focused on the logical next step of research for the PhD students in the audience: how to publish, and publish well. This was followed by top-notch presentations by students from UCLA, MIT, KU Leuven, Columbia, University of Pennsylvania, Toulouse School of Economics, Queen Mary University, LSE, UPF, Paris School of Economics, and University of Toronto.

The papers presented covered a broad range of topics and fields in the subject – Political and Public Economics, Industrial Organization, Development, Economics Theory, Econometrics, Behavioural, and Applied Economics. Each 20-minutes presentation was followed by a discussion and comments from students and faculty members in the audience, providing the authors constructive feedback on their work. Interesting poster presentations contributed another aspect to the event and were also well received.

This year, the Conference – thanks to generous CAGE funding – was able to provide, for the first time in its history, financial support to applied research projects deemed promising by an evaluation committee of faculty members. The three winners of the grant presented their projects on the second day of the Conference.

Alongside the academic discussions, the conference also catered towards opportunities for informal discussions and networking during the lunch events and the Conference Dinner.

Overall, the event was a success and achieved its target of providing a platform to graduate students from different institutions to showcase their work, as well as giving an opportunity to Warwick students to discuss their research and promote the department’s program to their peers across the globe.

Learn more about who the participants were and their projects.

Earlier this year, two final year Economics students presented their papers at the Carroll Round International Conference, which took place at Georgetown University, Washington D.C. on 11-14 April 2019, with one of them being awarded the 'Best Participant' prize.

The Carroll Round is an international economics conference which takes place annually at Georgetown University, Washington D.C and provides a unique forum for research and discussion among the world’s top undergraduates and encourages and supports scholarly innovation in the field of Economics.

Jonas Knecht and Diveena Nanthakumaran presented their paper as part of the Research in Applied Economics (RAE) module which undergraduate Economic students study during their final year of their degree course. Jonas presented his paper " " and Diveena's paper " ".

Winning the award, Jonas said:

"It was an incredible honor to win this award, I had a great time and would really encourage all students interested in economics research to get involved with the Carroll Round when they can."

Each year, RAE module leader, Dr. Gianna Boero, invites RAE tutors to nominate students with promising dissertation projects for consideration for departmental endorsement of their submission to the Carroll Round. Those students whose submissions are successful are then given financial support by the department to attend the conference and present the results of their research. The annual conference attracts students from top undergraduate programmes, including the universities of Chicago, Columbia, Duke, Harvard, MIT, LSE, Oxford, Pennsylvania, Princeton, Stanford, and Yale.

What research projects are you currently involved with?

I’m looking into questions of how work-life balance policies, particularly maternity and parental leave policies, affect the career paths of women. In the UK statutory maternity provisions are very low compared to the EU standard, but because this is the case, we find a big variation in occupational and contractual maternity benefits. I can exploit this variation to do my research.

My main project is looking at the higher education sector in the UK where we have a large variation in maternity benefits across universities. We undertook a large-scale survey of all female academics in the country so we have very rich individual level data and can do a whole lot of analysis.

We have done the analysis at the aggregate level to understand why maternity leave differs across universities. It’s not the case that richer universities have more generous leave policies – it really depends on how research-intensive these universities are, their size, the staff costs, the staff-student ratio, but also the bargaining processes that are going on between the staff and the leadership.

At the aggregate level we have found that more generous maternity leave leads to a much larger proportion of female professors with higher salaries, and a lower share of women on non-permanent contracts.

Now we have cleaned up and matched the individual level data and we are starting to look at productivity and individual career outcomes. We are looking at career paths among female academics, salaries, and productivity - whether a generous maternity leave leads to female academics staying more connected to their research and therefore being more productive when they return from leave.

It’s a very large project – it includes five research assistants from this department, people at Strathclyde and the University of Liverpool and it will go on for quite a while.

I feel like there has to be a cultural change when it comes to promoting women in the workplace, and my research, because it is rigorous and rooted in actual data, could help to inform evidence-based policy change

What impact do you hope this research will have on society?

In general I want to do research that has relevance for public policy-making. I’ve already been contacted by many Athena SWAN representatives from other universities who want to use these findings to lobby their own universities to increase the generosity of maternity provisions and in general to look into work-life balance policies.

In my own career I have observed a gender imbalance on the academic side. As soon as women have children, they slow down. They don’t have to – they are still equally bright and have good ideas, they just have a little bit less time. I feel like there has to be a cultural change, and my research, because it is rigorous and rooted in actual data, could help to inform evidence-based policy change.

I was in the Cabinet Office a couple of weeks ago talking about this project – they are very interested in the productivity effect, because the UK has a productivity gap compared to other advanced economies. This would be one way of – not completely closing the productivity gap, but keeping female talent in the labour market and increasing productivity to some extent. I was asked to extend the research from the HE sector to industry and the civil service, and that will be the next step.

Why did you decide to become an economist?

I’m very interested in the political decision making mechanisms behind economic policies. I consider myself an applied political economist - my background is in both economics and political science.

Why did you join the Economics Department at Warwick?

I came here because of CAGE, the Centre for Competitive Advantage in the Global Economy. It was set up as a centre in Economics but with a very applied, policy-oriented and interdisciplinary focus. That seemed like the perfect home for me, because I had this economics background but was very much interested in policy-making. It was absolutely perfect.

The combination of people working in CAGE – economic historians, applied economists, and people who work on the development side – fits very well with my interests. I enjoy working with people who are interested in a rigorous approach, but also in policy-relevant outcomes.

And it’s close enough to London to reach policy makers – that’s important for the kind of research that I am doing. We are involved in policy making, where it’s clear that the Warwick brand stands for quality and good advice and good consultancy.

There are many good universities in this country but clearly Warwick is one that is at the top – Economics is a top five department, it has many people that are internationally renowned, especially in the US, where they are kicking the frontier in Economics. Several Nobel prize-winners visited this department and I could talk to them personally – these are significant benefits.

What has been your most memorable experience during your time in the department?

A student of mine last year did a very political science-y topic in his final year thesis – he went to the Carroll Round conference – we worked very closely together and he did a great, great job and went on to Oxford. I met him every week for a year and had a lot of input in his work, and he was very receptive to my comments – that was absolutely great.

The other thing I have achieved, with support from CAGE, is to pull this maternity project off the ground. Over the last month I got a lot of media attention for the project – I spoke on Women’s Hour, I was in the Guardian – and that makes me really proud. But this couldn’t have happened without being in this Department and having its support around me. We have to do so many things – teaching, and admin, and research, and promotion of our research, and it’s very difficult for one person to do this – you need a whole machine. And Warwick Economics Department is a very well-oiled machine when it comes to trying to generate these opportunities for our research to be seen.