Economic policy has always been central to BIT’s work. We formed in the aftermath of the 2008 financial crisis and our early work included nudges that supported job seekers, helped borrowers avoid debt arrears and guided businesses towards government growth-support schemes.

Ten years on, we need to go beyond classic nudges that target the behaviour of individuals and use the full power of applied behavioural science to shape competition, tax and monetary policy. Such efforts can benefit businesses and consumers right across our societies.

The economic challenges where behavioural insights can help to deliver results encompass diverse issues. How do we help people thrive as technology and automation transform work? How do we drive innovation and help consumers make the right choices in a world of greater complexity? And how do we build economies that are more sustainable and resilient to future financial shocks? 

Featured Content

Creating better markets (podcast)

Creating better markets (podcast)

Financial innovation

Financial innovation

Applying behavioural insights to labour markets

Applying behavioural insights to labour markets

Boosting businesses

Boosting businesses

Gender equality

Gender equality

Barriers to economic mobility

Barriers to economic mobility

Online harms and manipulation

Online harms and manipulation

Our 10-point economic policy plan

Our 10-point economic policy plan

Creating better markets (podcast)

In this podcast, our CEO, Professor David Halpern, speaks to the New South Wales Minister for Customer Service, Victor Dominello. David and Victor cover a wide range of topics, starting with why other governments should have a Minister for Customer Service, how behavioural insights can improve economic policy, how markets can be made more transparent and when governments should intervene in markets. 


Victor has been the Member of Parliament for Ryde since 2008. He has held the position of Minister for Customer Service since April 2019. Prior to that Victor held the position of the Minister for Finance, Services and Property and was appointed the state’s first Minister for Innovation and Better Regulation in 2015. His earlier appointments include the Minister for Citizenship, Communities, the Minister for Aboriginal Affairs, the Minister for Veterans Affairs and the Assistant Minister for Education. As mentioned on the podcast, the NSW Behavioural Insights Unit was established in 2012 and has been located in the Department of Customer Service since 2019.

Listen here:



You can keep up to date with the work that Victor has been doing through his website, LinkedIn and Twitter


Further reading


  • If you want to read some news coverage about the FuelCheck app, you can go here or head to the FuelCheck website here
  • If you want to learn more about the Comprehensive Third Party reforms, you can read about it here
  • You can also read more about the work that the New South Wales Behavioural Insights Unit are doing here




Editing by Evan Sycamnias at Pixelife Studio

Music by Rich O’Brien

Thanks to Ellie Wood at the Minister’s Office, and Dave Trudinger, Eva Koromilas and the Behavioural Insights Unit. 

Financial innovation

With 11.5 million people in the UK having less than £100 in savings, 8.99 million over-indebted, and 9 million borrowing to pay for essentials because they have run out of money, many households often struggle to keep afloat financially. 

In 2016, in partnership with the Money and Pensions Service, we launched the Financial Capability Lab, an innovation project which aimed to design and test new and innovative ideas to help people make the most of their money and pensions. 

The Lab aims to address the following three objectives: 

  • First, how can we encourage people to build up a savings buffer to withstand financial shocks? 
  • Second, how can we encourage those who are facing financial trouble to seek financial advice and guidance? 
  • And finally, how can we empower people to take control of their spending and better manage their credit?

We have worked with dozens of experts in the field to develop and pilot groundbreaking ideas and we are now in testing the most promising ideas with banks, pension providers, fintechs and large employers. 

Applying behavioural insights to labour markets

A job is more than a source of income. It gives you a sense of identity, social inclusion, and contributes to positive health and wellbeing. 

Employment is one of the most important policy areas that governments manage. Governments have historically relied on two approaches to improve employment rates: (i) incentives, such as relocation vouchers for job seekers or wage subsidies for employers; and (ii) penalties for non-compliance, such as the removal of unemployment benefits.

As employment is one of BIT’s longest standing areas of work, we have seen how behavioural insights can improve these existing approaches, and offer alternative solutions that place people and their decision-making at the heart of the system.

One of the key lessons from our work is that to design effective employment policies, governments must improve their understanding of how job seekers and employers make decisions, and how they interact in the labour market, including through job service providers.

Boosting businesses

The US and much of Western Europe have experienced historically low productivity growth in the past decade. At the same time, businesses are expected to play their part in dealing with society’s big challenges: reducing carbon emissions, helping to fund public services and creating a fairer society.

Businesses are fundamentally behavioural. They are made up of people making judgements – judgements that are affected by myriad psychological factors. This applies to small businesses and larger ones too, where effects such as groupthink can distort decision-making. 

Behavioural insights can be used to make business tax reliefs, regulation and business support more effective. Our practical guide shows policymakers and practitioners how to improve take-up and engagement among businesses. Our full report sets out new frontiers: how to make markets work better, how to improve diffusion of innovation through business networks, and how to redesign financial incentives to boost investment and growth. 

Gender equality

In 2017 the UK brought in mandatory gender pay gap reporting for all employers with 250 or more staff. We know that the UK’s gender pay gap sits around 17.3% overall. But what can be done about it? 

In partnership with the Government Equalities Office, BIT established the Gender and Behavioural Insights (GABI) Programme to answer this question: what actions can employers take to close the gender pay gap? 

Working over the past 3 years, with £2.8m of funding and academic advice from Professor Iris Bohnet at the Harvard Kennedy School, we have generated:

  • An accessible evidence-based guide for employers on the steps they can take to improve gender equality in their organisations
  • 12 partnerships with private and public sector partners to co-design and test new interventions that have the potential to narrow the gap, many of which are now in the field
  • Results from a randomised controlled trial involving over 50,000 employers in partnership with the global job site Indeed where we increased the rate of employers advertising flexible jobs by 20% and also grew their applicant pools by 30%
  • A new finding that employers can drive up attraction of women to their senior roles by 20% if they advertise all vacancies as part-time or open to job-share by default.
Barriers to economic mobility

Economic mobility is a policy priority that cuts across political boundaries and is at the heart of the ‘American Dream’. We are working with nine American cities to identify, pilot and measure the success of interventions to accelerate economic mobility for their residents.

Improving economic mobility is a long-term challenge, but we will be creating a set of outcome measures that we hope will show progress in just a couple of years.

Some recent highlights include:

  • Newark, New Jersey will focus on reducing eviction rates, amid rising housing costs, to help ensure that long-term residents share in the benefits of local economic growth.
  • Rochester, New York will develop a matched savings programme for income-eligible families to help them weather financial shocks, build wealth and create economic stability.
  • Tulsa, Oklahoma will help youth who are not currently in work or school to get the education and training they need to secure high-quality jobs in the community.
Online harms and manipulation

The internet has transformed how we live, work and relate to one another. We can make friends around the world without ever saying ‘hello’, compare products from dozens of shops without leaving the house, or plan a date with a stranger without breaking a sweat.

Yet the characteristics of online environments – their deliberate design and the ability to generate enormous quantities of data about how we behave, who we interact with and the choices we make, coupled with the potential for mass experimentation – can also leave consumers open to harm and manipulation.

We have researched in detail how governments, regulators and at least some businesses might seek to harness our deepening understanding of human behaviour to address these failures. In this way, we can shape and guide the evolution of digital markets and online environments that really do work for individuals and communities.

Our 10-point economic policy plan

COVID-19 has inflicted a major shock on the UK economy. Simultaneously, it has shone a spotlight on wider structural problems that were already serious but are now critical, such as the UK’s lacklustre productivity and the uneven distribution of prosperity across society.

We need to reshape economic policy with human behaviour at its heart. Doing this will help governments and regulators to design more effective policy, improve the way our economy works, and address issues of low productivity, exclusion and unfairness, benefiting citizens and businesses right across our society.

The recommendations are grouped into three areas of economic policy: micro, meso (ie market), and macro-level. The 10 recommendations are:




1. Saving: Help people save for the future through restructuring tax incentives to build on the dramatic shift in personal savings that has occurred during the pandemic.

2. Jobs: Use behavioural and data science to open up new job opportunities and equip jobseekers with the support they need, focusing on job goals rather than compliance with benefit criteria.




3. Data: Measure whether markets are delivering for consumers and small businesses, collecting data on how complex it is to change suppliers and get the best deal.

4. Market transparency: Make it easier to see the best performers in professional services such as accountancy and law as well as with all government suppliers. Make it easier to see the best employers for job quality.

5. Switching costs: Design and test Smart Data initiatives to attack switching costs and help consumers compare and change energy, telecoms and financial providers.

6. Disruption: Kick-start market disruptors using challenge funds and shared facilities and equipment that reduce the cost of investing in innovation.




7. Plan ahead: Prepare for the next economic shock by building data, infrastructure and know-how on how to get stimulus spending to where it’s most needed – and fast.

8. Promote investment: Restructure business tax reliefs to target key moments when business leaders are making crucial investment decisions.

9. Social trust: Measure it and make it an integral part of economic policy making. 

10. Challenge: Test, measure and learn by using pre-mortems and encouraging oppositional thinking to established norms (so called ‘red teams’) to minimise biases that result in bad decisions such as optimism bias, confirmation bias and group reinforcement. Then reinforce this approach with rapid online testing before rolling out new policies.

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