The Centre for Market and Public Organisation (CMPO) at the University of Bristol conducts research on the general theme of ‘modernising government’, including welfare reform, pensions and the delivery of public services. The latest research findings from the Centre are summarised in the August 2003 issue of the CMPO bulletin:

•  Working mums: what impact on children’s early years development?
•  Lone mums going back to work: how effective are current policies?
•  Going the extra mile: can ‘not-for-profits’ deliver better public services?
•  Annuities: are people who retire today getting a bad deal?

THE IMPACT OF WORKING MUMS ON CHILDREN’S EARLY DEVELOPMENT

Much controversy surrounds the effects that mothers who go back to work early have on their children’s cognitive development. Research by Paul Gregg and Liz Washbrook provides new insights on the links between maternal employment and child outcomes through the experiences of the 12,000 children in the ALSPAC (Avon Longitudinal Study of Parents and Children) cohort.

The research shows that for the majority of children, maternal employment in the first three years of life is not associated with any adverse effects on later cognitive outcomes. Full-time work begun prior to 18 months does have harmful consequences if the family relies solely on unpaid childcare by a friend or relative; the use of formal childcare, however, protects children from these negative effects. And parenting tasks are more equally divided in households where mothers return to work early and children appear to benefit from this greater degree of father involvement

HAS WELFARE REFORM GOT MORE LONE MUMS BACK TO WORK?

A key element of the government’s strategy for reducing child poverty is to get more lone parents into work. Research by Paul Gregg and Susan Harkness evaluates the effectiveness of the welfare reforms introduced since 1998. It shows that around 80,000 more lone parents are now working as a result of the Working Families Tax Credit and the New Deal for Lone Parents. Increased employment and hours of work mean higher earnings for lone parents – together with more generous benefits, they are raising incomes among lone parent families

CAN ‘NOT-FOR-PROFITS’ DELIVER BETTER PUBLIC SERVICES?

The UK is seeing the emergence of a new breed of private ‘not-for-profits’ – organisations like Network Rail, Glas Cymru and the proposed foundation hospitals whose financial position and sphere of activity are still determined largely by the government.

Research by Paul Grout and Michelle Yong investigates the potential effectiveness of not-for-profits in the private provision of public services. It shows that the government’s role as purchaser of the services provided by not-for-profits poses significant problems for their success. A powerful purchaser erodes the key advantage of ‘not-for-profits’ over profit-maximising firms – their motivated workforce willing to ‘go the extra mile’.

ANNUITIES ARE AS GOOD VALUE AS EVER

Are current annuity rates – the flows of income that someone retiring today can expect to receive on their pot of pension savings – unfairly low? Not according to research by Edmund Cannon and Ian Tonks, which examines trends in annuity prices over the last 45 years and calculates whether annuities are correctly priced.

They show that although annuity rates have fallen from a high of 18% in the 1970s to rates of 8% today, the current generation is no worse off than its predecessors. Indeed, the pension income from an annuity –compared to an individual’s final salary – looks as good as ever. This is because the low level of current annuity rates has been offset by increases in the value of pension funds over the last 45 years.

The CMPO Bulletin is published twice a year by the Centre for Market and Public Organisation (CMPO) at the University of Bristol. The bulletin will be freely available on CMPO’s website from 13 August 2003: www.bris.ac.uk/cmpo/