Richard Layard, Baron Layard
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Peter Richard Grenville Layard, Baron Layard FBA (born 15 March 1934) is a British labour economist, currently working as programme director of the Centre for Economic Performance at the London School of Economics.
His early career focused on how to reduce unemployment and inequality. 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.
He was one of the first economists to work on happiness, with one theme being the importance of non-income variables on aggregate happiness, including mental health.
His main current interest is how better mental health could improve our social and economic life. His work on mental health, including publishing The Depression Report in 2006, led to the establishment of the UK Improving Access to Psychological Therapies (IAPT). He co-edited the 2012 World Happiness Report.
Layard assisted Claus Moser on the Robbins enquiry, and later developed a reputation in the economics of education (with Mark Blaug at LSE), and labour economics (in particular with Stephen Nickell). He advocated many of the policies which characterised the New Labour government, particularly the New Deal, partly by founding the Centre for Economic Performance at the London School of Economics. One approach he took 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.
In 1990 he was founder-director of the Centre for Economic Performance at the London School of Economics. where he is presently programme director.
Layard became active in 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:
- 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 race.
- 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 taxes serve another purpose besides paying for public services (usually for public goods) 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.
In 2005 he published the book Happiness: Lessons from a New Science, in which he emphasised the importance of non-income variables on aggregate happiness. In particular he stressed the role of mental health and argued that psychological treatments ought to be much more widely available.
Recent research on happiness questions part of Baron Layard's thesis and suggests that people do obtain happiness from increased income.
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.
- "The Depression Report. A new deal for depression and anxiety disorders". London School of Economics. Retrieved 26 April 2009.
- "Fit for purpose". The Guardian (London). 18 February 2009. Retrieved 26 April 2009.
- Stevenson, Betsey; Wolfers, Justin (2008). "Economic Growth and Subjective Well-Being: Reassessing the Easterlin Paradox". Brookings Papers on Economic Activity 2008: 1–87. JSTOR 27561613. (comments and discussion pp. 88-102).
- The London Gazette: . 8 May 2000.
- 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