Working Paper: CEPR ID: DP710
Authors: Nicholas F. R. Crafts
Abstract: The changes in economic policy introduced in the UK after 1979 had a substantial impact on income distribution, unemployment and productivity growth. This paper brings together available evidence in an attempt to evaluate the welfare effects of the Thatcher reforms. The estimated impact turns out to be sensitive to the degree of `inequality aversion' of the investigator and to the method chosen to estimate the counterfactual productivity path. The overall welfare effect may have been either negative or positive but is probably smaller than partisan assessments have claimed.
Keywords: growth; inequality; Thatcher; UK
JEL Codes: 131; 052
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Thatcher reforms (E65) | income distribution (D31) |
| Thatcher reforms (E65) | unemployment (J64) |
| Thatcher reforms (E65) | productivity growth (O49) |
| productivity growth (O49) | economic welfare (D69) |
| increased unemployment (J65) | economic welfare (D69) |
| increased inequality (F61) | economic welfare (D69) |