Lucy Stokes

A New Approach To Measuring Health System Output and Productivity

This paper considers methods to measure output and productivity in the delivery of health services, with an application to NHS hospital sector. It first develops a theoretical framework for measuring quality adjusted outputs and then considers how this might be implemented given available data. Measures of input use are discussed and productivity growth estimates are presented for the period 1998/9-2003/4. The paper concludes that available data are unlikely fully to capture quality improvements.

Metrics, Targets and Performance

The setting and use of targets in the public sector has generated a growing amount of interest in the UK. This has occurred at a time when more analysts and policymakers are grasping the nettle of measuring performance in and of the public sector. We outline a typology of performance indicators and a set of desiderata. We compare the outcome of a performance management system - star ratings for acute hospital trusts in England - with a productivity measure analogous to those used in the analysis of the private sector. We find that the two are almost entirely unrelated. Although this may be the case for entirely proper reasons, it does raise questions as to the appropriateness of such indicators of performance, particularly over the long term.

Are firms paying more for performance

Despite its potential to raise productivity, performance-related-pay (PRP) is not widespread in market-oriented economies. Furthermore, despite secular changes conducive to its take-up, there is mixed evidence as to whether it has become more prominent over time. Ours is the first paper to present firm-level data for the Britain on both the incidence and size of bonus payments in the 2000s. We decompose the share of the total wage bill accounted for by bonuses into the shares of employment in the PRP and non-PRP sectors, the ratio of base pay between the two sectors, and the gearing of bonus payments to base pay within the PRP sector. We show that there was some growth in the share of total pay accounted for by bonuses in Britain in the mid-2000s. However this rise - and subsequent fluctuations since the onset of recession in 2008 - can be almost entirely explained by changes in the gearing of bonus to base pay within the PRP sector. There has been no substantial change in the percentage of employment accounted for by PRP firms; if anything it has fallen over the past decade. Furthermore, the movements in the gearing of bonuses to base pay in the economy at large are heavily influenced by changes in the Finance industry: a sector which accounts for a large proportion of all bonus payments in the British economy.

Does Early Education Influence Key Stage 1 Attainment? Evidence for England from the Millennium Cohort Study:

There is a body of evidence that shows that early education improves cognitive and social development for children while they are still attending, but the longer-term impacts depend on the quality of early education. Much of this evidence in England relates to a period when attendance rates at early education were around 60 per cent. Since then, early education has expanded through the guarantee of free provision for three- and four-year-olds, such that attendance at early education is now almost universal. This paper uses data from the Millennium Cohort Study to consider whether, in an era of near universal provision, early education is still associated with detectable improvements in outcomes for children. The analysis focuses on attainment in Key Stage 1 assessments when children were aged seven and finds that the overall impact of early education on Key Stage 1 attainment is modest, but that the impact is generally greater for those children who experienced poverty when they entered early education.

Does employees’ subjective well-being affect workplace performance?

This article uses linked employer–employee data to investigate the relationship between employees’ subjective well-being and workplace performance in Britain. The analyses show a clear, positive and statistically significant relationship between the average level of job satisfaction at the workplace and workplace performance. The relationship is present in both cross-sectional and panel analyses and is robust to various estimation methods and model specifications. In contrast, we find no association between levels of job-related affect and workplace performance. Ours is the first study of its kind for Britain to use nationally representative data and it provides novel findings regarding the importance of worker job satisfaction in explaining workplace performance. The findings suggest that there is a prima facie case for employers to maintain and raise levels of job satisfaction among their employees. They also indicate that initiatives to raise aggregate job satisfaction should feature in policy discussions around how to improve levels of productivity and growth.

THE Performance Pay Premium and Wage Dispersion in Britain

Estimates of the performance pay (PP) premium using household survey data are upwardly biased due to the use of PP contracts in higher paying workplaces. Using nationally representative linked employer-employee data we estimate the PP premium at the mean and across the wage distribution, after accounting for workplace heterogeneity. We then present the effects of PP on the wage distribution. Failure to account for the use of PP in high paying workplaces overstates the PP premium by one-third. The premium rises as one moves up the wage distribution, but the effect is more modest after having accounted for workplace heterogeneity.

Using Foundation Stage Profile Assessments To Assess Outcomes From Early Years Education

In the past decade early years education has expanded throughout England with progressive extensions in entitlement to some hours of free provision. Furthermore, there is consistent evidence that shows that early years education leads to improvement in cognitive and social development for children. This paper uses the latest data from the Millennium Cohort Study to consider whether, in an era of near universal provision, receipt of early years education still leads to better outcomes for children than for those who did not receive early years education and whether different characteristics of provision produce better outcomes. The outcome measures we consider are the Foundation Stage Profile Assessments that apply to all children in England.

Who fared better? The fortunes of performance pay and fixed pay workers through recession

We examine whether those paid for performance fared better in terms of wage growth and job tenure than their fixed pay counterparts through the most recent recession. In theory we might anticipate that, since performance pay workers share the income risks of economic shocks with their employers, their earnings may have declined more than those of fixed pay employees. However, for this very reason, they may experience more stable employment patterns than fixed pay workers whose ‘stickier’ wages may make them susceptible to job loss. Using data from the Annual Survey of Hours and Earnings 2002-2012, we find changes in bonus payments accounted for 16 per cent of the decline in aggregate wages between 2009 and 2012. Bonus payments fell more precipitately than fixed wages of both performance pay and fixed pay workers. We confirm that performance pay employees were more likely to experience nominal wage cuts than fixed pay employees during the recession. This ‘wage gap’ was apparent for hourly wages and was not driven by differential hours flexibility. We also find performance pay employees had longer job tenure than fixed pay employees.

Assessing the Variance in Pupil Attainment: How Important is the School Attended?:

We explore the variation in pupil attainment at the end of secondary schooling in England. The paper links data on all schools and all pupils within these schools to analyse the role of the school in accounting for this variation. We analyse a number of different indicators of pupil attainment including value added between the end of primary and secondary schooling and attainment levels at the end of secondary schooling. We examine indicators that were the focus of the school accounting framework as well as other indicators that were not directly part of how schools were assessed. We show that schools account for a minority of the variance in pupil attainment, and the extent of the variation accounted for by the school is sensitive to the measure of pupil attainment used. In addition, we find that the majority of the explained school-level variance in attainment is related to school composition. However, most of the variance in attainment remains unexplained, raising questions about what other factors contribute to the variation in school performance.