Comprehensive Guide to the LSESU Economics Society Essay Competition

1. Essay Prompt from Professor Sir Christopher Pissarides

Essay Prompt: Evidence shows that workers like to work from home, say one day a week, but they hate monitoring devices that the firm might use to see how they allocate their time during the home day. What do you think the firm should do, if it wants to motivate its workers by giving them something that they like, but at the same time ensure it gets its money’s worth during working hours?

How to Approach This Essay Prompt

To begin, identify the central economic trade-off in the question: how can employers offer the flexibility employees value while ensuring productivity remains high? This is fundamentally a question about balancing worker autonomy with organizational performance in the modern workplace.

Next, consider the economic implications of remote work for both employers and employees. Working from home can improve work-life balance, reduce commuting time, and increase job satisfaction, but it may also create information asymmetry, making it more difficult for employers to observe effort and evaluate performance. Think carefully about whether AI-powered monitoring genuinely improves productivity or whether it risks undermining employee trust and motivation.

You should also connect your discussion to key concepts in labor economics, such as the principal-agent problem, incentive design, workplace motivation, and monitoring costs. Rather than focusing solely on surveillance, explore alternative ways firms can encourage productivity, such as performance-based evaluation, transparent communication, outcome-oriented management, or trust-based organizational culture.

Finally, evaluate what an effective workplace should look like in an era where AI and hybrid work are becoming increasingly common. A strong essay will recognize the trade-offs between efficiency, employee wellbeing, and privacy while proposing realistic strategies for balancing these competing objectives.

2. Essay Prompt from Professor Silvana Tenreyro

Essay Prompt: Suppose AI reduces the number of people needed to perform a large fraction of jobs, threatening to cause high unemployment. What measures should be put in place to limit inequality in pay (and, ideally, also in hours worked)?

How to Approach This Essay Prompt

Begin by considering how AI could reshape the labor market. While AI may automate many routine tasks, it is also likely to increase demand for workers whose skills complement new technologies. This raises important questions about unemployment, wage inequality, and the future distribution of work.

Next, explore why technological change often increases inequality. You may want to examine concepts such as skill-biased technological change, job polarization, and the concentration of economic gains among highly skilled workers and technology owners. Understanding these mechanisms will help explain why technological progress does not necessarily benefit everyone equally.

Once you have established this foundation, evaluate policies that could reduce inequality in both income and working hours. Possible areas to explore include education and reskilling programs, progressive taxation, wage subsidies, universal basic income, profit-sharing schemes, or shorter workweeks. Rather than simply listing policy options, analyze their strengths, limitations, and the trade-offs between economic efficiency and social equity.

Finally, consider whether AI should primarily be viewed as a threat to employment or as an opportunity to improve productivity and redistribute work more effectively. A thoughtful essay will acknowledge multiple perspectives while proposing policies that promote both economic growth and inclusive prosperity.

3. Essay Prompt from Professor John Van Reenen

Essay Prompt: Is it possible and desirable to raise taxation on the top 1%?

How to Approach This Essay Prompt

Start by examining the purpose of progressive taxation within an economy. Taxes are not only a source of government revenue but also an important policy tool for redistributing income, financing public services, and addressing inequality. This provides the broader context for the debate surrounding higher taxes on the wealthiest individuals.

Next, separate the two dimensions of the question: whether increasing taxes on the top 1% is feasible, and whether it is desirable. When discussing feasibility, consider issues such as tax avoidance, capital mobility, international tax competition, and the practical challenges of enforcing higher tax rates. When evaluating desirability, analyze the potential effects on investment, entrepreneurship, innovation, economic growth, and income inequality.

You should also connect your discussion to concepts in public economics, including the trade-off between efficiency and equity, optimal taxation, the Laffer Curve, and the behavioral responses to taxation. Supporting your arguments with economic theory as well as empirical evidence will strengthen your analysis.

Finally, avoid presenting the issue as a simple yes-or-no question. A strong essay should recognize that the success of higher taxation depends on institutional design, implementation, and broader economic conditions.

4. Essay Prompt from Professor Michael Gmeiner

Essay Prompt: How will development and adoption of climate-friendly technologies affect inequality and the distribution of wealth?

How to Approach This Essay Prompt

Begin by defining what climate-friendly technologies include. These may range from renewable energy and electric vehicles to energy storage systems, green manufacturing, and carbon-reduction innovations. Explain why these technologies are central to the global transition toward a low-carbon economy.

Next, analyze how the development and adoption of these technologies could influence economic inequality. On one hand, they have the potential to generate new industries, create high-quality jobs, and drive long-term economic growth. On the other hand, the benefits may be concentrated among countries, firms, and individuals that own the necessary capital, technology, or intellectual property, while workers in traditional industries may face job displacement.

You should also consider how the green transition may reshape the distribution of wealth. Think about the role of technology ownership, access to investment opportunities, government subsidies, carbon pricing, and differences between developed and developing economies. Examining these factors will help you understand how technological innovation can both reduce and reinforce existing inequalities.

Finally, evaluate policies that could ensure a more equitable transition. For example, you might discuss workforce retraining, broader access to green technologies, or “Just Transition” policies that support workers and communities affected by structural economic change. A well-rounded essay will consider both the opportunities and the distributional challenges created by climate innovation.

5. Essay Prompt from Professor Ricardo Reis

Essay Prompt: Following a sharp rise in UK energy prices, prepare a brief for a central bank on how monetary policy should respond. Take into account that the UK is a net importer of energy, and that the Bank of England has a mandate of keeping inflation steady at 2%.

How to Approach This Essay Prompt

Begin by identifying the nature of the economic shock described in the question. Because the United Kingdom is a net importer of energy, a sharp increase in global energy prices raises production costs, increases import expenses, and puts upward pressure on inflation. This represents a classic supply-side shock that creates difficult policy trade-offs for a central bank.

Next, consider the role and objectives of monetary policy. The Bank of England is tasked with maintaining inflation at its 2% target, but raising interest rates to control inflation could also reduce investment, weaken consumer spending, and slow economic growth. Think carefully about the competing objectives policymakers must balance when responding to inflation driven by external supply shocks.

You should then apply key macroeconomic concepts such as cost-push inflation, inflation expectations, aggregate demand, interest rate policy, and exchange rates. Evaluate the advantages and disadvantages of different policy responses, and consider whether the central bank should respond aggressively or adopt a more gradual approach.

Finally, remember that the prompt asks you to prepare a policy brief rather than simply explain economic theory. A strong essay should present a clear recommendation supported by sound economic reasoning, while acknowledging the uncertainties and trade-offs involved in monetary policymaking.