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Balancing act

As Covid case numbers begin to climb again, the debate over easing restrictions has returned. But the economic and health effects of the pandemic are not felt equally and improving research and policy-making to identify and support the most vulnerable is crucial.

Newsletter from 9 July 2021

On the surface, events this week have hinted at a return to normality, 16 months on from the arrival of Covid-19 in the UK. On Monday, Boris Johnson announced that plans to lift social distancing, mask-wearing and gathering restrictions will go ahead on 19 July. On Wednesday, the Office for National Statistics released data revealing that labour productivity growth in the first quarter of 2021 rebounded to twice its pre-pandemic rate. And spirits are high after England made it to the Euro 2020 final, as James Reade (Reading University) predicted in his score-casting piece earlier this week.

Some argue that this is the price to pay to revive the economy. But as Flavio Toxvaerd argues, the concept of a trade-off between health and the economy is a chimera. Good policy must consider our health and the economy together, rather than as competing interests. By disregarding infections now, we risk the pandemic becoming out of control, which in turn will hinder the economy down the line.

It is also important to remember that getting this wrong will disproportionately affect vulnerable groups who have already been hit hard by the pandemic, either in terms of their health or incomes.

One such group is those receiving care. Covid-19 exposed the fault lines in England’s social care system, with deaths among residential care users increasing by 62% since the start of the pandemic compared with recent years. In a new article this week, Elaine Kelly (Institute for Fiscal Studies and the Health Foundation) and Claudia Barclay (Health Foundation) explored how young people with learning difficulties have been particularly badly affected, facing six times higher Covid-19 mortality rates than the general population. Further, successive lockdowns have restricted access, as younger adults receive a far greater proportion of their care in the community. Worryingly, as Claudia and Elaine report, a third of family carers or paid support staff have seen the physical health of the young person they support deteriorate since the first lockdown.

Covid-19 has also taken a heavy toll on certain minority ethnic groups. For instance, evidence from the Institute for Fiscal Studies (IFS) indicates that Bangladeshi hospital fatalities are twice those of white British people, while Pakistani and black African deaths are almost three and four times higher respectively. Not only this, but certain ethnic groups are also more economically vulnerable on average – as highlighted in an earlier Economics Observatory article.

These disparities will only exacerbate existing inequalities within the UK. One way these issues can start to be addressed is by improving the way we conduct economic research around vulnerable groups. This week at the Economics Observatory, we explored two ways to do this.

Diagnosing the problem

Before policymakers can design appropriate policy to address the UK’s inequality problem, it is crucial to identify which communities are most in need of help. Sanghamitra Bandyopadhyay (Queen Mary, University of London) examined how the acronym BAME, which lumps together black, Asian and other minority ethnic groups, creates a false narrative that these groups are all disadvantaged, and to the same extent.

But this could not be further from the truth, with British Chinese people earning the most out of all ethnic groups in the UK, followed by Indian and white people, while British Bangladeshis, Pakistanis and black groups are least represented in the top income bracket. Regional inequality matters too, as the majority of ethnic minority poverty is concentrated in inner-city London.

The picture is even bleaker if we look at wealth inequality, as shown in Figure 1. It would be possible to increase black African and Bangladeshi household wealth by tenfold and still not reach the wealth level of their white British and Indian counterparts.

Figure 1: Average total household wealth by ethnicity of the household head, April 2016 to March 2018

Source: Office for National Statistics

The term BAME masks these intricacies. Sanghamitra calls for a richer set of measures to identify deprivation according to different demographic and social groups, such as those used in the IFS Deaton Report (2020). This will help policymakers to isolate the specific ethnic communities that need additional support.

But once we’ve identified the problem, how do we address it?

Addressing the problem

Diversity Champion for the Royal Economic Society (RES), Stefania Paredes Fuentes (University of Warwick), suggests that promoting diversity in economics is key to broaden the ways we see the world, understand the social problems we research and provide more relevant policy recommendations. 

Ethnic diversity among economists in academia increased from 19% in 2012/13 to 24% in 2018/19. But still less than 30% of Pakistani and Bangladeshi academic economists and less than 20% of black academic economists work in the prestigious, research-intensive Russell Group universities. Female academic representation in the discipline is even less encouraging – flatlining since 2012 at 26%.

Similar patterns are seen at undergraduate level, with ethnic minority students underrepresented in Russel Group institutions. Overall numbers of economics students from ethnic minority groups are still low, but they are rising. Women’s undergraduate representation has similarly stalled since 2012.

Figure 2: Percentage of research academics from each ethnic group working in economics, by sex (2018–19)

Source: ‘Ethnic Diversity in UK Economics’ – Advani et al, 2020

The Royal Economic Society and other organisations, by supporting students and economists from underrepresented groups through campaigns such as Discover Economics, are striving to turn this around.

Economics Observatory news

Tickets for our Talking Economics event, run in collaboration with the Festival of Economics, are now available on our website. The conference will take place on 17-19 November in Bristol and will bring together economists, policy-makers and the public to discuss the coronavirus crisis and recovery, as well other challenges we face, from climate change to inequality. Find out more and book your place here.

Author: Kate Lucas
Photo by Loic Leray on Unsplash
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