Richard Disney

Entry, Exit and Establishment Survival in UK Manufacturing

We study entry, exit and survival of UK manufacturing establishments from 1986 to 1991 using the newly released ARD database. We document patterns of entry and exit across industries and over time. We estimate an augmented Cox proportional hazard to examine the survival of new plants in the UK in this period. We find interactions between survival, size and age of establishment that differ between establishments that are singles and part of a group. We speculate that this finding may be consistent with market selection models based on learning.

Crises in Public Pension Programmes in OECD: What are the Reform Options?

The paper examines projections of the fiscal liabilities of public pension programmes in a number of OECD countries. It investigates the reasons why many countries have built up such liabilities in the past and critically appraises the future projections of pension costs. It examines the strengths and weaknesses of four reform options which are currently being discussed and implemented in various countries.

Why Are There So Many Long Term Sick in Britain

This paper examines the upward trend of numbers in receipt of Invalidity Benefit (the major contributory benefit for the long-term sick) in Britain since 1971. Possible explanations include the rising level of unemployment through much of the period; the heightened link between ill-health and early retirement; changes in the real level of benefits; and changes in the composition of the workforce. These possibilities are examined using a variety of methodologies: time-series, cross-section, and fixed-effects models. Copyright 1991 by Royal Economic Society.

Declining public pensions in an era of demographic ageing: will private provision fill the gap?

Abstract Demographic crisis and imprudent commitments have induced a crisis in public pension programmes in OECD countries. Will present and prospective cutbacks lead to greater private saving, either in the form of private pension provision or in other forms of saving? The paper surveys existing evidence, and provides new results on three questions: Do individuals substitute private for public provision of savings when public pension programmes are cut back ‘voluntarily’? Do individuals respond to incentives to join sponsored or tax subsidised arrangements if encouraged by the government? And, if individuals are prepared to make such arrangements, and where saving is voluntary, do they save ‘enough’ to replace previous prospective public pension flows?

Housing costs, house price shocks and savings behaviour among older households in Britain

Abstract Most households around retirement age hold much of their non-pension wealth in the form of housing. The paper uses a two wave panel to examine housing wealth and saving behaviour by the elderly in Britain between 1988 and 1994. It examines the response of households to house price shocks, and also to ‘excess’ housing costs relative to income. The results differ between non-movers and movers, and are corrected for the non-random nature of the moving decision. It finds a marginal propensity to save to offset the house price shock of 0.96 for movers, but an insignificant impact for non-movers. ‘Excess’ housing costs do not appear to influence the moving decision and are positively associated with saving, suggesting strong heterogeneity in tastes for overall asset holding.

Disability, Capacity for Work and the Business Cycle: An International Perspective

Important policy issues arise from the high and growing number of people claiming disability benefits for reasons of incapacity for work in OECD countries. Economic conditions play an important part in explaining both the stock of disability benefit claimants and inflows to and outflows from that stock. Employing a variety of cross-country and country-specific household panel data sets, as well as administrative data, we find strong evidence that local variations in unemployment have an important explanatory role for disability benefit receipt, with higher total enrolments, lower outflows from rolls and, often, higher inflows into disability rolls in regions and periods of above-average unemployment. In understanding the nature of the cyclical fluctuations and trends in disability it is important to distinguish between work disability and health disability. The former is likely to be influenced by economic conditions and welfare programmes while the latter evolves in a slower fashion with medical technology and demographic changes. There is little evidence of health disability being related to the business cycle, so cyclical variations are driven by work disability. The rise in unemployment due to the current global economic crisis is expected to increase the number of disability insurance claimants.

What Has Happened to Union Recognition in Britain

This paper examines the determinants of union recognition status using data from the three Workplace Industrial Relations Surveys of 1980, 1984 and 1990. Our theoretical approach argues that the level of industry quasi-rents and union density at the time of the establishments set-up should be considered the crucial determinants of recognition status. Confirmation of these predictions is found for private sector manufacturing establishments in the econometric analysis. Of particular interest are the non-linear relationship between historic industry quasi-rents and recognition status and the stability of the model over the three data sets, although there is evidence for a marked downward shift in recognition probabilities during the 1980s.

Financial Literacy and Indebtedness: New Evidence for U.K. Consumers

We utilise questions concerning individual ‘debt literacy’ incorporated into market research data on households’ unsecured debt positions to examine the association between consumer credit and individual financial literacy. We examine the relationship between individual responses to debt literacy questions and household net worth, consumer credit use and over-indebtedness. We find that financially illiterate households have lower net worth, use higher cost credit and are more likely to report credit arrears or difficulty paying their debts. However, financially literate households are more likely to co-hold liquid savings and revolving consumer credit, suggesting that the co-holding might arise as a result of rational financial behaviour. We consider the potential endogeneity of financial literacy.

What Are Occupational Pension Plan Entitlements Worth in Britain

The acquisition of rights by workers in private pension plans underpins retirement behavior, recruitment policy, and wage structure but there is controversy as to how these individual pension rights should be valued. The paper combines four data-sets to calculate pension entitlements for a sample of 3,000 British workers in 1987. Expected scheme tenure is a key variable in valuation; younger workers and women face greater initial uncertainty as to their pension outcomes, which is resolved as job tenure lengthens. Given the distribution of tenure durations, many employees would obtain higher returns in defined contribution schemes than in a typical final-salary-defined benefit plan. Copyright 1996 by The London School of Economics and Political Science.

Job Tenure and Asset Holdings

This paper examines the impact of housing equity and occupational pension scheme membership on job tenure. Using job duration data from the 1985 General Household Survey, appropriate hazard functions are constructed and estimated. Housing equity data is constructed from the General Household Survey, with appropriate adjustment for selection on house movers. Housing equity has a negative impact on male job tenure, which is more pronounced the longer the job lasts. In contrast, pension scheme membership raises average tenure, in accordance with other studies, but the results show variation according to pension scheme characteristics. Copyright 1994 by Royal Economic Society.