Facts and figures about UK taxes, benefits and public spending.
Income distribution, poverty and inequality.
Slides, video clips and interactive tools.
Analysing government fiscal forecasts and tax and spending.
Analysis of the fiscal choices an independent Scotland would face.
Case studies that give a flavour of the areas where IFS research has an impact on society.
Reforming the tax system for the 21st century.
A peer-reviewed quarterly journal publishing articles by academics and practitioners.
This government, alongside most of its predecessors, is concerned about social mobility. A society in which one's prospects are largely or wholly determined by chance of birth is not one with which many will feel comfortable. But any strategy to increase social mobility must be long term, multi-faceted and cautious in its claims.
As the coalition government prepares to launch its own strategy for tackling social mobility, recent work at IFS exploring the literature on social mobility has highlighted some important conclusions that the government would be wise to bear in mind.
First, countries with higher income inequality tend to have lower social mobility (at least when using income-based definitions of mobility). In an unequal society there is further to travel to get from the bottom to the middle or the top. The UK has relatively high income inequality and low social mobility. It is therefore likely to be very hard to increase social mobility without tackling inequality.
Particularly in a context of high levels of inequality such as that in the UK it is important to be clear what one is trying to achieve through increased social mobility. It is obvious that pursuing relative social mobility implies downward mobility for individuals from rich/middle income families. In a world in which the consequences of downward social mobility are significant, there will be many who find this mobility very uncomfortable.
It also matters whether the government is more concerned about improving the mobility of the most disadvantaged or those somewhat further up the social spectrum. Policies aimed at improving the mobility of the most disadvantaged or the least skilled can be very costly. In part this is because the UK labour market appears to be "hollowing out", by which we mean there are increasing numbers of high skill and low skill jobs, and fewer in the middle. So it may be harder and more costly to help those at the very bottom than it will be to help those somewhat above the bottom. Any comprehensive social mobility strategy is likely to want to deal with both of these groups and may need to treat them quite differently.
One set of interventions which we know are important are those aimed at very young children, as the recent Field Review and Allen Review have highlighted. But it is equally important to understand that they will never be enough by themselves. The evidence is clear that early investments are most productive if they are followed up with later investments. Important findings in this area are that:
View all Observations in the series
Does offering higher teacher salaries improve pupil attainment?
In new work published today, IFS researchers analyse the impact of offering higher teacher salaries on pupil attainment. We examine salary scales and pupil attainment in primary schools in and around London. For these schools, and for the salary differences of just under 5% that we observe, we do not find evidence that higher salary scales for teachers have much impact on pupil attainment. This suggests that if individual schools offered salary differentials on this scale across-the-board, they would not necessarily attract more effective teachers.
The next five years look better but tough fiscal choices remain for Scotland
The latest public finance forecasts published by the Office for Budget Responsibility (OBR) in December presented a better outlook for the UK than had been suggested by their March forecast. This is good news for the UK and Scotland in the short-term but much of the improved short-term outlook comes at the expense of reduced scope for economic recovery after 2018–19. Also the one area of greater weakness in the OBR’s latest forecast – revenues from oil and gas production – has substantially more adverse consequences for Scotland’s fiscal position than for the UK as a whole. In short, the new forecasts do little to diminish the tough choices that will face Scotland (and, to a lesser extent, the UK) if it is to achieve long-run fiscal sustainability.
50p tax – strolling across the summit of the Laffer curve?
Ed Balls and Ed Milliband have cited recent HMRC statistics which show those paying the 50% income tax rate are estimated to have paid some £10 billion more in tax over the three years 2010-11 to 2012-13 than was projected to be the case back in 2012 when HMRC analysed how much the tax was raising. Is that an indication that the 50p rate was more successful in raising revenue than HMRC concluded in their analysis?