• World growth is expected to remain below trend at 3.1 per cent in 2012 and 3.4 per cent in 2013.

• The Euro Area is forecast to contract by 0.5 per cent this year and grow only marginally next year with unemployment reaching ‘depression-era’ rates in some periphery economies. The US is likely to grow by 2 per cent in each year.

• Growth in Brazil, Russia, India and China will be below long-term potential next year, although ‘hard-landings’ will be avoided; the impact on advanced economies will be offset by a large gain in competitiveness.

• Debt to GDP ratios in OECD countries will, on average, be higher in 2014 than at present.

• The economy will contract very slightly this year, but grow by just over 1 per cent in 2013.

• Consumer price inflation will be 2.7 per cent this year and 2 per cent in 2013.

• We expect unemployment to continue to stabilise at about 8 per cent.

• We expect the cyclically adjusted current budget to be approximately balanced in 2016–17.

Parental beliefs are recognised by psychologists as an important causal influence on child development. A two-period model of human capital accumulation in the framework of Becker and Tomes (1986) is presented. In the first period parents transfer their beliefs, distinct from genes, to children by signalling their ‘belief in a just world’ or their perceived return to effort. Children respond by choosing effort, irrespective of the real world returns, which combines with their genes to create early ability. This determines the rate of return to second-period investment and final attainment. If parents are credit constrained, both beliefs and income determine attainment. Empirical analysis using the second generation of the NCDS shows that beliefs are a strong predictor of early attainment and significantly reduce the importance of parental income. The identifying assumption is that parent beliefs are slow-moving and not conditioned on the child.

The effects of working part time on job downgrading and upgrading are examined over the life course of British women born in 1958. We use longitudinal data with complete work histories from a large-scale nationally representative cohort study. Occupations were ranked by their hourly average earnings. Analyses show a strong link between full-time/part-time transitions and downward and upward occupational mobility over the course of up to thirty years of employment. Probabilities of occupational mobility were affected by women's personal traits, occupational characteristics and demand-side factors. Downward mobility on moving from full-time to part-time work was more likely for women at the top levels of the occupational hierarchy working in male-dominated or mixed occupations and less likely in higher occupations with more part-time jobs available.

Drawing on nationally representative data collected for two age cohorts in the UK, this paper a) assesses the effect of multiple independent socioeconomic risk factors in shaping the transition from school to work; and b) identifies potential protective factors enabling young people to beat the odds. By comparing experiences and findings across two cohorts we assess the generalisability of findings across contexts, i.e. the 2008 and 1980s recessions. The results show that some young people exposed to even severe socioeconomic risks avoid being NEET (not in education, employment or training). Factors that appear to reduce the cumulative risk effect in both cohorts include prior attainment, educational aspirations and school engagement, as well as the social mix of the school environment.

Age at entry to motherhood is increasingly socially polarised in the UK. Early childbearing typically occurs among women from disadvantaged backgrounds relative to women with later first births. The Millennium Cohort finds differentials in their children's development, cognitive and behavioural, at age 5, by mother's age. These could be due to difficulties facing immature mothers, but much of it is attributable to young mothers’ social origins, or inequalities apparent at the age 0 survey, which may also have had earlier origins. The developmental penalty left to be attributed to the mother's age per se is, at most, modest.

There is a body of evidence that shows that early education improves cognitive and social development for children while they are still attending, but the longer-term impacts depend on the quality of early education. Much of this evidence in England relates to a period when attendance rates at early education were around 60 per cent. Since then, early education has expanded through the guarantee of free provision for three- and four-year-olds, such that attendance at early education is now almost universal. This paper uses data from the Millennium Cohort Study to consider whether, in an era of near universal provision, early education is still associated with detectable improvements in outcomes for children. The analysis focuses on attainment in Key Stage 1 assessments when children were aged seven and finds that the overall impact of early education on Key Stage 1 attainment is modest, but that the impact is generally greater for those children who experienced poverty when they entered early education.