Richard Layard
Encyclopedia
Richard Layard, Baron Layard (born 15 March 1934) is a British
economist. He was founder-director in 1990 of, and is a current programme director at, the Centre for Economic Performance at the London School of Economics.
In his early career he was Senior Research Officer for the famous Robbins
Committee on Higher Education. This committee's report
led to the massive expansion of UK university education in the 1960s and 1970s. Apart from various academic positions he has held since the 1960s, Layard has worked as an advisor for numerous organizations, including government institutions in the United Kingdom
and Russia
.
Since 2000, Layard is a Labour
life peer
in the House of Lords
as Baron Layard, of Highgate in the London Borough of Haringey
. In 1991, he married Molly Christine Meacher
, who was formerly married to Michael Meacher
. Molly, styled Lady Layard between 2000 and 2006, was herself created a life peer
in 2006 as Baroness Meacher. They are one of the few couples to both hold titles in their own right.
. He was educated at Eton
, where he was a King's scholar, at King's College, Cambridge
and at the London School of Economics.
at LSE), and labour economics
(in particular with Stephen Nickell
). He advocated many of the policies which have characterised the New Labour government, particularly the New Deal, partly by founding the influential Centre for Economic Performance at the London School of Economics
. The approach he takes is based on the idea of welfare-to-work, where social welfare payments are structured in a way that encourages (or forces) recipients back into the job market.
Recently, Layard has shifted his attention to the study of what has since come to be known as Happiness economics
. This branch of economic analysis starts from the argument that income is a bad approximation for happiness. Based on modern happiness
research, he cites three factors that economists fail to take into consideration:
From these observations, Layard concludes that tax
es serve another purpose besides paying for public services
(usually for public good
s) and redistributing income. The third purpose is to counteract the cognitive bias
that causes people to work more than is good for their happiness. That is, taxes should help citizens preserve a healthy work-life balance
.
His work
, resulted in the development of Improving Access to Psychological Therapies
(IAPT), an initiative to improve access to psychological therapies in the United Kingdom.
, a reduced benefit to happiness from increased income.
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
economist. He was founder-director in 1990 of, and is a current programme director at, the Centre for Economic Performance at the London School of Economics.
In his early career he was Senior Research Officer for the famous Robbins
Lionel Robbins
Lionel Charles Robbins, Baron Robbins, FBA was a British economist and head of the economics department at the London School of Economics...
Committee on Higher Education. This committee's report
Robbins Report
The Robbins Report was commissioned by the British government and published in 1963. The Committee met from 1961 to 1963...
led to the massive expansion of UK university education in the 1960s and 1970s. Apart from various academic positions he has held since the 1960s, Layard has worked as an advisor for numerous organizations, including government institutions in the United Kingdom
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
and Russia
Russia
Russia or , officially known as both Russia and the Russian Federation , is a country in northern Eurasia. It is a federal semi-presidential republic, comprising 83 federal subjects...
.
Since 2000, Layard is a Labour
Labour Party (UK)
The Labour Party is a centre-left democratic socialist party in the United Kingdom. It surpassed the Liberal Party in general elections during the early 1920s, forming minority governments under Ramsay MacDonald in 1924 and 1929-1931. The party was in a wartime coalition from 1940 to 1945, after...
life peer
Life peer
In the United Kingdom, life peers are appointed members of the Peerage whose titles cannot be inherited. Nowadays life peerages, always of baronial rank, are created under the Life Peerages Act 1958 and entitle the holders to seats in the House of Lords, presuming they meet qualifications such as...
in the House of Lords
House of Lords
The House of Lords is the upper house of the Parliament of the United Kingdom. Like the House of Commons, it meets in the Palace of Westminster....
as Baron Layard, of Highgate in the London Borough of Haringey
London Borough of Haringey
The London Borough of Haringey is a London borough, in North London, classified by some definitions as part of Inner London, and by others as part of Outer London. It was created in 1965 by the amalgamation of three former boroughs. It shares borders with six other London boroughs...
. In 1991, he married Molly Christine Meacher
Molly Meacher, Baroness Meacher
Molly Christine Meacher, Baroness Meacher, , known from 2000 to 2006 as Lady Layard, is a British social worker.Meacher was educated at the Berkhamsted School for Girls, the University of York, where she received a Bachelor of Arts in economics in 1970, and the University of London, where she...
, who was formerly married to Michael Meacher
Michael Meacher
Michael Hugh Meacher is a British Labour politician, who has been the Member of Parliament for Oldham West and Royton since 1997. Previously he had been the MP for Oldham West, first elected in 1970. On 22 February 2007 he declared that he would be standing for the Labour Leadership, challenging...
. Molly, styled Lady Layard between 2000 and 2006, was herself created a life peer
Life peer
In the United Kingdom, life peers are appointed members of the Peerage whose titles cannot be inherited. Nowadays life peerages, always of baronial rank, are created under the Life Peerages Act 1958 and entitle the holders to seats in the House of Lords, presuming they meet qualifications such as...
in 2006 as Baroness Meacher. They are one of the few couples to both hold titles in their own right.
Personal life
Peter Richard Grenville Layard is the son of John LayardJohn Layard
John Willoughby Layard was an English anthropologist and psychologist.- Early life :Layard was born in London, son of the essayist and literary writer George Somes Layard. He grew up first at Malvern, and in c 1902 moved to Bull's Cliff, Felixstowe. He was educated at Bedales School...
. He was educated at Eton
Eton College
Eton College, often referred to simply as Eton, is a British independent school for boys aged 13 to 18. It was founded in 1440 by King Henry VI as "The King's College of Our Lady of Eton besides Wyndsor"....
, where he was a King's scholar, at King's College, Cambridge
King's College, Cambridge
King's College is a constituent college of the University of Cambridge, England. The college's full name is "The King's College of our Lady and Saint Nicholas in Cambridge", but it is usually referred to simply as "King's" within the University....
and at the London School of Economics.
Work
Layard assisted Claus Moser on the Robbins enquiry, and later developed a reputation in the economics of education (with Mark BlaugMark Blaug
Mark Blaug , was a British economist , who has covered a broad range of topics over his long career. In 1955 he received his PhD from Columbia University in New York under the supervision of George Stigler...
at LSE), and labour economics
Labour economics
Labor economics seeks to understand the functioning and dynamics of the market for labor. Labor markets function through the interaction of workers and employers...
(in particular with Stephen Nickell
Stephen Nickell
Stephen John Nickell CBE is a British economist and currently Warden of Nuffield College, Oxford.Nickell was educated at Merchant Taylors' School, Northwood and Pembroke College, Cambridge....
). He advocated many of the policies which have characterised the New Labour government, particularly the New Deal, partly by founding the influential Centre for Economic Performance at the London School of Economics
London School of Economics
The London School of Economics and Political Science is a public research university specialised in the social sciences located in London, United Kingdom, and a constituent college of the federal University of London...
. The approach he takes is based on the idea of welfare-to-work, where social welfare payments are structured in a way that encourages (or forces) recipients back into the job market.
Recently, Layard has shifted his attention to the study of what has since come to be known as Happiness economics
Happiness economics
Happiness economics is the quantitative study of happiness, positive and negative affect, well-being, quality of life, life satisfaction and related concepts, typically combining economics with other fields such as psychology and sociology. It typically treats such happiness-related measures,...
. This branch of economic analysis starts from the argument that income is a bad approximation for happiness. Based on modern happiness
Happiness
Happiness is a mental state of well-being characterized by positive emotions ranging from contentment to intense joy. A variety of biological, psychological, religious, and philosophical approaches have striven to define happiness and identify its sources....
research, he cites three factors that economists fail to take into consideration:
- Social comparisons: In contrast to what traditional economics predicts, happiness is derived from relative income as well as from absolute income. That is, if everyone gains purchasing power, some may still turn out unhappier if their position compared to others is worse. This effect may not turn economic growth into a zero sum game entirely, but it will likely diminish the benefits people draw from their hard work. In an economy where not only companies, but individuals are constantly forced to compete with each other, life and work are experienced as a rat raceRat RaceA rat race is a term used for an endless, self-defeating or pointless pursuit. It conjures up the image of the futile efforts of a lab rat trying to escape while running around a maze or in a wheel...
. - Adaptation: As people get used to higher income levels, their idea of a sufficient income grows with their income. If they fail to anticipate that effect, they will invest more time for work than is good for their happiness.
- Changing tastes: Economists assume that individual preferences are constant, when in fact such preferences are not fixed but increasingly mutable, shifting constantly according to the latest trends and cultural norms. In turn, the relative values of one's accumulated possessions are subject to depreciation, ultimately having a negative effect on happiness.
From these observations, Layard concludes that tax
Tax
To tax is to impose a financial charge or other levy upon a taxpayer by a state or the functional equivalent of a state such that failure to pay is punishable by law. Taxes are also imposed by many subnational entities...
es serve another purpose besides paying for public services
Public services
Public services is a term usually used to mean services provided by government to its citizens, either directly or by financing private provision of services. The term is associated with a social consensus that certain services should be available to all, regardless of income...
(usually for public good
Public good
In economics, a public good is a good that is non-rival and non-excludable. Non-rivalry means that consumption of the good by one individual does not reduce availability of the good for consumption by others; and non-excludability means that no one can be effectively excluded from using the good...
s) and redistributing income. The third purpose is to counteract the cognitive bias
Cognitive bias
A cognitive bias is a pattern of deviation in judgment that occurs in particular situations. Implicit in the concept of a "pattern of deviation" is a standard of comparison; this may be the judgment of people outside those particular situations, or may be a set of independently verifiable...
that causes people to work more than is good for their happiness. That is, taxes should help citizens preserve a healthy work-life balance
Work-life balance
Work–life balance is a broad concept including proper prioritizing between "work" on the one hand and "life" on the other. Related, though broader, terms include "lifestyle balance" and "life balance".-History:The work-leisure dichotomy was invented in the mid 1800s...
.
His work
, resulted in the development of Improving Access to Psychological Therapies
Improving Access to Psychological Therapies
Improving Access to Psychological Therapies is a United Kingdom initiative to improve access to psychological therapies. It was a result of the economic evaluationsby Professor Lord Richard Layard and Labour Party policy....
(IAPT), an initiative to improve access to psychological therapies in the United Kingdom.
Critique
Recent research on happiness suggests that people do obtain, ceteris paribusCeteris paribus
or is a Latin phrase, literally translated as "with other things the same," or "all other things being equal or held constant." It is an example of an ablative absolute and is commonly rendered in English as "all other things being equal." A prediction, or a statement about causal or logical...
, a reduced benefit to happiness from increased income.
External links
- Richard Layard. Home page at the London School of Economics.
- Lionel Robbins Memorial Lecture Part 1 Happiness: Has social science a clue?
- Lionel Robbins Memorial Lecture Part 2 Income and happiness: rethinking economic policy
- Lionel Robbins Memorial Lecture Part 3 What would make a happier society?
- The Depression Report. LSE CEP page.
- Richard Layard - LSE Experts entry