Sam Bowman discusses the proposed regulations on bankers' bonuses on LBC

Sam Bowman, Research Director at the ASI, argues against the proposed regulation to claw-back bankers' bonuses and calls for a distinction between ignorance and fraud. Listen to the debate here.

Ben Southwood debates proposed regulations on bankers' bonuses on BBC World Service

Ben Southwood, Head of Policy at the Adam Smith Institute, debates the Deputy Director of the High Pay Centre over the proposed regulation to claw-back bankers' bonuses. Listen to the debate here.

ASI Fellow argues against the 'bankers' oath' in the City AM debate

Adam Smith Institute Fellow Mikko Arevuo takes part in the City AM debate, arguing against the notion that making bankers take an oath is the best way to restore trust in the financial system.

The idea that we can restore consumer trust and confidence, or prevent the next crisis, by requiring bankers to swear an oath is excessively naive.

Such a pledge trivialises the ethical issues that banks and their employees face in the real world. It gives a false sense of confidence that implies that expressing a few lines of moral platitudes will equip bankers to resist the temptations of short-term gain that can exist in financial services.

Moreover, changing organisational culture is a long and ambiguous process.

Bankers operate within tight regulatory frameworks; the quickest way to drive behavioural change is through regulatory interventions.

Alternatively, banks should change compensation policies to focus on sustainable shareholder value creation rather than short-term gain, as well as enforce bonus claw-back clauses to limit reckless risk taking.

Read both sides of the debate here.

ASI Research Director writes for The Spectator Coffee House: The state should send many more poor children to private schools

Research Director of the Adam Smith Institute, Sam Bowman, wrote a comment piece for The Spectator detailing the links between education quality and long-term economic growth found in the ASI's new report "Incentive to Invest: How education affects economic growth".

Better capital makes us richer. That’s uncontroversial when it comes to fixed capital like machine tools and computers, but it’s also true of human capital. Better educated workers create more productive jobs, increasing the total amount of wealth in an economy.

In a new Adam Smith Institute report released today, Incentive to Invest: How education affects economic growth, we found a very significant relationship between improvements in education and growth. In our model, a 10 per cent increase in TIMSS Advanced test scores generates a long-term 0.85 per cent increase in annual economic growth. We argue that getting more children into independent schools through vouchers may be the easiest way of improving outcomes, and thus growth.

Read the full article here.

The report, “Incentive to Invest: How education affects economic growth”, reveals that Britain could add billions of pounds to its long-term economic growth by increasing access to private education.

ASI “Incentive to Invest?” report featured in The Times

The Adam Smith Institute’s latest report – which finds education quality has a direct impact on long-term economic growth – was featured in The Times.

Sending more children to private school would add billions of pounds to Britain’s economy, a new report claims.

Increased competition between independent schools could have raised GDP by £5,800 per person, according to Incentive to invest: how education affects economic growth, a study from the Adam Smith Institute.

The report compared Britain, where about 7 per cent of children are privately educated, with the Netherlands, where the state pays for about two thirds of children to attend independent schools.

Read the article here.

The report, “Incentive to Invest: How education affects economic growth”, reveals that Britain could add billions of pounds to its long-term economic growth by increasing access to private education.

ASI "Incentive to Invest?" report featured in The Daily Telegraph

The Adam Smith Institute's latest report - which finds education quality has a direct impact on long-term economic growth - was featured in The Daily Telegraph.

Britons would each be nearly £6,000 better off if more children went to independent schools, a Right-leaning think tank has said.

They offer the best value for the Government to improve exam results and pupils’ potential earnings, the Adam Smith Institute said.

Read the article here.

The report, “Incentive to Invest: How education affects economic growth”, reveals that Britain could add billions of pounds to its long-term economic growth by increasing access to private education. 

Author of "Incentive to Invest?" report writes for Conservative Home

Gabriel Heller Sahlgren wrote a comment piece for Conservative Home detailing the links between education quality and long-term economic growth. 

But there’s education and there’s education. Shuffling more people into upper-secondary school and higher education offers a simple solution to the problem. With more schooling years, the story goes, people will acquire the skills necessary to create a competitive economy. Indeed, this idea was partly behind the 2008 Education and Skills Act, which increased the compulsory schooling age to 18.

But simple solutions are rarely good solutions, and this certainly applies here. My paper, published today by the Adam Smith Institute, reviews the existing empirical research and provides new statistical evidence on the impact of education quantity and quality on growth. And, in fact, support for the idea that schooling years per se raise growth is thin, at least in developed economies.

Read the full article here.

The report, “Incentive to Invest: How education affects economic growth”, reveals that Britain could add billions of pounds to its long-term economic growth by increasing access to private education. 

Press Release: More private education would add billions of pounds to long-term economic growth

Contact Communications Manager, Kate Andrews, for further comments or to arrange an interview: kate@adamsmith.org / 07584 778207

• The UK’s average annual growth rate between 1960 and 2007 would have been almost 1 percentage point higher had it matched the Netherlands' long-term level of independent school enrolment since 1960. This in turn means that UK GDP per capita would have been over £5,800 higher in 2007 than it was.

• Better education boosts economic growth; improving students’ international test scores by 10% raises a country's average annual growth rate by 0.85 percentage points.

• UK GDP per capita would have been almost £5,300 higher in 2007 had it performed as well as Taiwan since the mid-twentieth century.

Britain could add billions of pounds to long-term economic growth if it increased access to private education, a new report released today (Tuesday July 29th) by the free-market Adam Smith Institute has found.

The report, “Incentive to Invest: How education affects economic growth”, illustrates how higher educational achievement boosts long-term economic growth, and the important role of private schooling in this process.

Through the use of existing research and new quantitative evidence, the author of the report, Gabriel Heller Sahlgren, establishes that test scores are closely related to growth. Lifting achievement by 10% hikes a country’s average annual growth by 0.85 percentage points.

Furthermore, the report illustrates how competition from independent schools has proven successful in generating higher international test scores, while also driving costs down. Sending 20 percentage points more 15 year olds to independent schools would raise growth by 0.4pp—or about a sixth—via its positive effect on educational achievement.

Based on his findings, Heller Sahlgren calls for the government to radically reform education policy by encouraging more privatisation and competition in the education sector.

Had the UK matched the Netherlands’ long-term level of independent school enrolment since 1960, its GDP per capita would be over £5,800 higher today, the report argues. At a time when policymakers are trying to cement and broaden the economic recovery, the report suggests that expansion of access to private schooling would be an attractive component of a long-term growth strategy.

Commenting on the report, its author Gabriel Heller Sahlgren said:

“My research shows that a focus on increasing the number of pupils taking higher qualifications is misguided. There’s in fact no robust impact of average schooling years in the population on economic growth on average.

“On the other hand, education quality, proxied by international test scores, has a consistent and strong effect on growth. According to my calculations, the UK’s real GDP per capita in 2007 would have been over £5,000 higher had we performed on par with Taiwan since the mid-20th century. So the dividend of improving children’s attainment is large indeed.

“Yet there are different ways to do achieve this. Unlike expensive resource-driven education reforms, which are rarely cost effective, a good option is to raise the level of independent school competition, which other research shows both increases international test scores as well as decreases costs.

“According to my calculations, the indirect economic benefit, via higher achievement, of increasing the number of pupils in independent schools to the Netherlands’ level would be a 0.92 percentage point higher long run GDP per capita growth rate. The government should therefore continue their market-based reforms on education and expand choice as widely as possible."

Sam Bowman, Research Director of the Institute, said:

This report shows that we need greater access to private schooling for all pupils regardless of background, not just to improve the welfare of the children themselves but to boost the UK’s overall standard of living and long-term economic growth.

Expanded access to private education through school vouchers and a revival of the assisted places scheme may be an easy, low cost way for the government to boost growth by improving the human capital of British workers. The results may take some time to materialize but studies like this show just how valuable a long-term strategy for expanding access to private schools could be.

Click here to read “Incentive to Invest: How education affects economic growth”.

For further comments or to arrange an interview, contact Kate Andrews, Communications Manager, at kate@adamsmith.org / 07584 778207.

The Adam Smith Institute is an independent libertarian think tank based in London. It advocates classically liberal public policies to create a richer, freer world.

Director of The Entrepreneur's Network writes for City AM

Director of The Entrepreneur's Network, Philip Salter, wrote a comment piece for City AM highlighting some good news: the UK has just been ranked second in the latest Global Innovation Index. Read the article here.

Apart from the risk of shocks from geopolitical crises, the outlook for the economy looks a whole lot brighter than it has for a long time. Friday’s UK GDP figures are the latest in a steady stream of good news, but this doesn’t need to be the only thing to brighten your Monday morning: the UK has also just been ranked second in the latest Global Innovation Index (GII), part of a comprehensive report created by Cornell University, Insead, and the World Intellectual Property Office.

ASI Senior Fellow Tim Worstall discusses child labour laws in Bolivia on BBC Radio 4 Women's Hour

Senior Fellow at the Adam Smith Institute, Tim Worstall, debates the Advocacy Director of the children rights division of Human Rights Watch, Jo Becker, about Bolivia's new child labour laws - which have lowered the legal working age from fourteen to ten - on BBC Radio 4 Women's Hour. Listen to the debate here.