The pitfalls of comparative analysis: does the welfare state lead to wealth inequality?

A blog from the right-wing Cato Institute caught my eye.  It claims, on the basis of an article published last year, that poorer households have less personal wealth in countries with higher welfare state expenditure.  Apparently, this is because people in welfare states don’t need to provide for the same contingencies that others might have to.  The headline claims: “Welfare State Causes Wealth Inequality”.

The original article , by Fessler and Schürz, is complex and careful, and it’s capable of being interpreted in several ways.  The article is behind a paywall, so here’s a link to a slide show with key details.  Wealth holding is very strongly reflects the pattern of inheritance, and the people this most affects aren’t the poorest.   The authors explore a range of interpretations, most notably the apparent paradox that

social services provided by the state are substitutes for private wealth accumulation and partly explain observed differences in levels of household net wealth across European countries. …  This implies that an increase in welfare state spending goes along with an increase — rather than a decrease — of observed wealth inequality.

I’m not convinced that we can treat social expenditure as a unified element – the way countries treat pensions is not necessarily how they treat people with disabilities – and if there is a generative relationship, it’s not at all clear what affects what.  In my own published work, more generally, I’ve been critical of analysing country effects in this way.

The paper where I make the arguments is on open access here.  What matters is not the number of data points within the countries, because those points are interdependent, but the number of policy units (that is,  governments).   There just aren’t enough countries to be able to do this analysis sensibly, and this paper is no exception.  direction  Here is a graph from Fessler and  Schürz‘s paper, showing some of the key information.

The data in the article are based on 13 countries; this graph has eleven.  One of them is Luxembourg, a notorious outlier – not just because it’s small, but because it’s distinctive.  Remove Luxembourg from the analysis, and the line in the graph goes clearly and strongly in the opposite direction.  (That reversal of direction, which contrasts with the apparent pattern for people with less wealth, actually makes the findings more interesting.)

This doesn’t mean that the interpretation in the article is wrong.  The hypothesis is intriguing and plausible,  and it could still be true.  The problem is that we can’t tell.

A Nobel prize for using RCTs?

Economics as a discipline doesn’t always connect with the real world, but at least the Nobel laureates with an interest in development economics are working on something that matters.  The new laureates have apparently been selected on the basis of their ‘experimental’ approach.  I gave the subject a brief mention in my forthcoming book, The Poverty of Nations, but you’ll have to wait to next March before you can read it.  Here, as a spoiler, are the sentences in the typescript I gave over to their evidence on Randomised Control Trials.  The reference is to A Banerjee, E Duflo, 2011, Poor economics, published by Penguin.

Banerji and Duflo advocate a greater use of RCTs, but their own examples show cases where this fails. In one study they mention, it appeared that textbooks did not help education; that was misleading. In another, the evaluation was supposed to identify the influence of contraception on family size; it overlooked the importance for parental decisions of the  prospects of children surviving to adulthood. Experiments and RCTs work by screening out extraneous information; the gaps that are left are only to be expected.

 

On the stigma of council housing

A notice on Twitter, advertising a radio appearance, drew my attention to a paper published last year on the stigma of council housing by Tom Slater. The paper is here; there’s an earlier version, for those who can’t get past the paywall, here.  Slater claims to be paying attention to

“a term that was invented by journalists, subsequently amplified and canonised by think tanks and then converted into doxa by politicians: the sink estate. “

That’s not right.

The stigma of council housing is long-standing.  It dates back at least to the people rehoused from slum clearance in the 1930s (disreputable areas had been identified before that, but  they weren’t council estates).  Many council developments were designed deliberately to be held at a distance from respectable housing: that is the subject of The Cutteslowe Walls, published in 1958 (the walls were built in 1934).  To take another example, the primary school I went to in Newcastle had different entrances for kids from the council estate and private estate.  Tucker’s 1966 book , Honourable estates, outlined the problems.

Within that system, however, some council tenancies were always seen as worse than others.  Harry Simpson, a former director of housing in the 1960s, commented that “ghettoes developed because councils, when allocating accommodation, graded families according to their deserts instead of their needs”.  In the 1970s, the leading text on housing management, Macey and Baker, advised agencies to rate the type of accommodation a person should receive by their personal suitability, including cleanliness and tidiness; that was how things were done when I started  letting houses in Hartlepool, where prospective tenants were rated on such things and got a house that matched their rating.   (I was carpeted at the time for writing an internal memo which said that this was leading to a concentration of people with problems in undesirable areas; later I included a comment on grading in my first report for Shelter in 1983.)   Macey and Baker did, at least, reject the idea of segregating ‘problem families’ deliberately.  I have the 1973 edition:

“All these problem families exhibit one common factor, namely, their inability to cope …. in some few instances, one or both of the parents may be physically well and of average intelligence, but of a type which the ordinary man in the street would classify as ‘bone idle’.  … (but) it is difficult to believe that such a background of coercion, coupled with the fact that the families are thrown into association with other sub-standard families, is likely to be a good atmosphere in which to raise any family’s standard …”

Bad areas were variously known as ‘difficult to let’, ‘ghettos’, or (in a 1975 Scottish report) ‘depressed schemes’.  ‘Ghetto’ estates were seen “as a form of punishment, a device for disciplining and the social control of tenants”.   So the term “sink estates” was not a new, or a particularly influential, invention; it was just another way of referring to a widely observed set of problems.

The government’s counsel digs a pit for the government’s case to fall into

The challenge to prorogation is currently being broadcast. I’ve previously been critical of the way that the Supreme Court goes about its business, and the current hearing does not give me any reason to think differently about that.  The hearing has been punctuated by confusion about supportive documentation – misleading reference numbers, flapping between paper and electronics, and to cap it, Lady Hale’s computer failure this morning.

Having said that, I am going to take my courage in both hands and try to second-guess the outcome.  The government’s submission basically has been to say, ‘hands off’, and the most persuasive part of that case has been a series of previous instances where prorogation has been used politically.  And then, I think, the government’s counsel undermined his position, possibly fatally.  This is a clip from this morning’s hearing, as summarised in the Guardian briefing.

The poverty of nations: a relational perspective

I’ve signed a contract to deliver my next book by the end of this month.  The working title is “The poverty of nations: a relational perspective”, and it develops an argument I’ve been building over the last few years about the relational elements of poverty – understanding poverty, not as a lack of resources or income, but as a set of social relationships.  I posted, two years ago, the abstract of a paper on this general theme. Here is that abstract again:

Poverty is at root a relational concept, which can only be understood by locating the experience of poor people in the social and economic situation where they are found. This is not just saying that poverty is ‘relative’. Developments in policy and practice are increasingly focused on dynamic, relational and multi-dimensional understandings of poverty; our conceptual frameworks have failed to keep pace.

Much of the consideration of poverty in the course of the last hundred years, relative or absolute, has found it convenient to rely on three fallacies. The first is that poverty is a condition or state of being, which can be considered exclusively from the perspective of the individual who experiences it. The second is that can be understood solely in terms of resources, when resources themselves have to be understood in terms of social and economic relationships. The third is that there is a clear and decisive threshold below which people can be said to be poor, and above which they are not poor.

All of these positions are tenable – they are supported by many of the most eminent writers in the field – but they are not adequate, either as a way of describing the positions that people hold, or as a conceptual tool to analyse the issues.  Discussions of exclusion, a concept which is self-evidently relational, come closer to the idea of poverty than much of the academic literature on poverty in itself, offering a way to escape from the limitations of conventional models of poverty.

The book will be out next year. It will be my twentieth, depending on how you count them, and the fourth since I left my post in 2015. People may be surprised at the short time between contract and delivery of the final copy.  It’s been my practice for many years to write a book before I submit it.  I started to do that early on, after working through the more conventional route of proposal and writing to order, only to find when I delivered the script at the end of two years the publisher thought that I should have written a different book.  This way, I can guarantee is that we all end up with what we’re expecting to get.

I wouldn’t, however, advise any young academic to follow in my footsteps.  The fact is that academic institutions don’t like books very much, or social policy, and don’t really rate either when it comes to counting the beans.  When I left my employment, I was making a choice; I wanted to do more on poverty, benefits and social theory, and going independent was the best way to do it.  I don’t regret it; in the last three years I’ve done four books, a few research contracts and a semester in Poland, which I loved. If anyone out there wants an academic career, however, you’ll all be better off writing bids for research funding.

The reform of social care will take more than money

The House of Lords Economic Affairs committee has called for free personal care in England, on lines similar to the system in Scotland.  “Under free personal care individuals would therefore only receive funding for support with these basic activities of daily living, based on the minimum threshold of eligible needs as defined by the Care Act.” They are recommending a major increase in the funding for social care, so that care can be delivered on much the same terms as health care.  However, they accept that people should pay accommodation costs themselves, with means-tested support, and they recognise that this might entail “catastrophic accommodation costs” which might have to be subject to a cap.

This has been welcomed as a radical proposal, but it doesn’t touch on most of the problems that go with social care.  We’re still thinking of social care as a set of needs which can be satisfied by specific cash payments.  The Lords report explains:

“Personal care means essential help with basic activities of daily living, such as washing and bathing, dressing, continence, mobility and help with eating and drinking. It does not include other areas where support might be needed, such as assistance with housework, laundry or shopping.”

I don’t believe that a system based on this approach can ever deliver what people want to see.  I don’t believe people want, or are comfortable with, successive 15 minute visits from a team of people who bathe them, or dress them, or help them to bed.  I don’t believe that what most people really want in life is to manage a rota.  I don’t think that providing for a series of events, sold as if they were commodities, meets people’s human needs.  What we should be allocating is time with a person, and that calls for a different approach to assessing needs from one that focuses on whether or not someone needs help with brushing their teeth.

Social policy and interpersonal relations

Screwing my courage to the sticking place,  I have added a new page to An Introduction to Social Policy.  It’s about Social Policy and Interpersonal Relations, and it includes coverage of topics including the body, terminating pregnancy, sexuality, suicide and domestic violence, amongst other issues.

The website is used around the world, but few people have noticed the new page yet – there were 21 visitors last week out of 2,730 for the whole site.  The new page covers  potentially sensitive material, and  I’ve been acutely aware that what I write has to be useful for people in a variety of cultural settings.  I’d appreciate feedback.

What’s wrong with the idea of opening the NHS to US traders? Plenty.

There’s been a lot of discussion about the potential for a trade agreement with the USA and its possible impact on the NHS.  “I think everything with a trade deal is on the table,” Donald Trump has said.  “When you’re dealing in trade everything is on the tabl,e so NHS or anything else, a lot more than that, but everything will be on the table, absolutely.” The response of those who want there to be such an agreement has been to say that it won’t matter – a “storm in a teacup”, one IEA spokesperson commented. US firms are already providing services in UK health care.  Services can be provided by a range of providers; what matters for the consumer is that the NHS continues to offer services that are free at the point of delivery.

This view may be disingenuous, because there is a strong financial incentive not to see the problems.  It is certainly mistaken.  The usual complaints from the left are that profit-making firms are extractive, and that competition consumes resources.  Either might be true, but the problems run much deeper than that.  There is now abundant evidence of what happens to public services when ‘competition’ or part-privatisation is introduced.  I have just had a paper rejected which makes the arguments in some detail – admittedly it’s too tendentious for an academic journal – but I can sketch out a couple of points here.

There is no system, anywhere, that is wholly public, any more than there is a system that is wholly private.  The NHS has had an uncomfortable relationship with the private sector, but its successful functioning relies mainly on two pillars: that the private sector is small and select, and that the services are sufficiently integrated to ensure that really serious cases can be taken over by the national service.  Both of those are at risk from creeping commercialisation.

The fundamental problem in any mixed system is that commercial providers get to choose what they cover; public providers, committed to meeting the needs of a population, do not.  Commercial providers select those areas of operation which they are undertaking to provide – that is how markets work.  That means that in general they will select those activities which deliver the best return per unit.   It follows that some things will be left out; when they are, the public services will have to deal with them as provider of last resort.  (Take a simple illustration, delivering post and parcels.  If private firms can subcontract for the profitable bits, they choose the easy runs – between major cities, or within busy areas.  In the case of private health care, that has generally meant a preference for relatively low-risk elective surgery, while long term psychiatric or geriatric care don’t attract the insurers or the services.)

Taking those points together, that must also mean that public services have a higher cost per unit than the private services – the difference is built into the process.    Politically, there are constant complaints that public services don’t work as well as private ones.  Of course they don’t; they have to take on the bits that private providers leave behind.

That’s the unavoidable part of the problem.  Some other things follow in the wake of that structure.  They may be avoidable, but they are still difficult.

  • There is a continuing incentive for private providers to cut corners – skimping on service, paying less, holding to the letter of complex contracts.
  • The public sector has to develop processes for sub-contracting and compliance, which are expensive and uncertainly effective.
  • When private providers get it wrong, and services collapse, the public services have to pick up the pieces.

There’s obviously a lot more to be said about competitive structures, but that’s why I started out trying to write a paper on it rather than a blog entry.

Thinking Collectively

I’ve just received the first print copies of my new book, Thinking Collectively: social policy, collective action and the common good. In Reclaiming Individualism, I made a case for social and government action in order to protect and enhance the conditions of individuals. Thinking collectively complements those arguments by considering collective approaches to social policy.

These comments are from the reviews obtained by the publisher:

“Paul Spicker asks how to think-with, live-with, and be-with collectives in this important new book which sees afresh the possibilities of collective life. Crucially, it also reinstates the significance of the common good and value of the common weal for social scientists and activists.”   Stephen A. Webb, Glasgow Caledonian University

“This concise and well-written book is a compelling and timely reminder of the importance of collective action and political community.”   Daniel Béland, McGill University

It’s my nineteenth book, my third since leaving Robert Gordon University.

Functional illiteracy in Scotland: Andrew Neil’s figures were out of date, but they weren’t made up

Andrew Neil has been censured by Ofcom for saying in an interview in 2017 that one in five pupils who left primary school in Scotland were “functionally illiterate”.   According to the BBC report of the judgment, the BBC submitted that

“the figure had come from a 2009 report, but that “it was not accurate to say that this allowed the conclusion quoted in the programme  … It should have been made clear that the phrase ‘functionally illiterate’ was not used in that report and that its source was the education spokeswoman of the Scottish Conservatives.” When it published its findings in November 2017, the ECU said that the 2009 survey “contained no reference to ‘functional illiteracy’, and no data which would have justified the claim in question”.

That surprised me, because I’d come across the 20% figure before.

The main source of the figure is arguably a report written by Professor J Lo Bianco, Language and Literacy Policy in Scotland, published in 2001 by SCILT at the University of Strathclyde.  Lo Bianco’s report was a wake up call for Scottish education – it had a major impact on the treatment of Gaelic and BSL.  He wrote that “More than one adult in five is not functionally literate in English and even more people have problems with numeracy.”  He wrote:

The UK-wide Report Improving Literacy and Numeracy, A Fresh Start (Moser Report 1999) notes in its opening paragraph that ‘something like one adult in five in this country is not functionally literate and far more people have problems with numeracy. This is a shocking situation and a sad reflection on past decades of schooling. It is one of the reasons for relatively low productivity in our economy, and it cramps the lives of millions of people.’ Whilst the situation that is reported is indeed shocking it is far from clear that it is valid to make a direct and causal connection between the levels of assessed adult literacy and ‘past decades of schooling’. The International Adult Literacy Study of 1997 suggests that 23% of adult Scots have low literacy skills.

Subsequently, England developed the “Skills for Life” survey, which by 2011 recorded marked improvements in functional literacy.  A Scottish report in 2008, “New Light on Adult Literacy and Numeracy in Scotland”  avoided the question of functional literacy.  Based on a study of adults aged 34, it commented that ” literacy levels in England and Scotland were nearly identical”(p 8)   but commented that ” 39% of men and 36% of women in the survey had literacy abilities at a level likely to impact on their employment opportunities and life chances.”

What’s been happening since is important.  The Scottish Survey of Literacy and Numeracy shows a marked improvement in standards in primary schools, where the foundations of literacy are laid, and now 88% of pupils in P7 are considered to be performing ‘well’ or ‘very well’.  That improvement probably wouldn’t have happened without those earlier reports.

I don’t much like Andrew Neil’s politics, but he’s a terrific journalist.  Even if on occasion he gets things wrong, he doesn’t make things up.  The main charge against him is not that he was wrong, or that his use of the term ‘functional literacy’ was inappropriate, but that he was outdated.  That’s a mistake that any of us who are trying to distill information drawn from a wide field might have made.