Trade-offs or synergies in the pursuit of full employment

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1. The path to full employment Reduce inactivity, increase flexibility LauraGardiner, Resolution Foundation @lauracgardiner January 2016 1 2. 2 In normal times more…
  • 1. The path to full employment Reduce inactivity, increase flexibility LauraGardiner, Resolution Foundation @lauracgardiner January 2016 1
  • 2. 2 In normal times more people enter work from inactivity than unemployment The debate around boosting employment tends to focus on reductions in unemployment But outside of recession / recovery phases, most new entrants come from economic inactivity
  • 3. 3 Achieving full employment is therefore about boosting participation for ‘low activity’ groups Almost all of the variation in labour market participation across time and across regions occurs among ‘low-activity’ groups The ‘high performing’ group is a natural bellwether for full employment
  • 4. 4 A framework for developing full employment targets Population growth ‘Near slack’ ‘Low-activity’ workforce participation Unemployed 550,000? Hours increases ? (emp. equiv) c.1.1 million by 2020? Regional gaps c. 900,000? Further trend / policy driven improvements ? by 2020
  • 5. Boosting participation requires a different approach – with a greater focus on ‘pull’ factors • The inactive population is less likely to be subject to benefit conditionality or engaging with back- to-work support for benefit recipients • ‘Push’ factors remain important (e.g. extension of conditionality and support to 2nd earners in UC – many of whom will be economically inactive)… • …But strengthening ‘pull’ factors and breaking down specific barriers take on increasing significance 5
  • 6. 6 Most inactive people move into part-time roles when they enter… Part-time working is much more common among those moving into work from economic inactivity than it is among either the previously unemployed or the existing workforce
  • 7. 7 …Particularly those in ‘low activity’ groups for whom full employment gains are greatest… Mother and older workers show a particular tendency to work part-time when entering from inactivity
  • 8. 8 …And their tendency to enter part time may reflect more of a preference than a constraint… Part-time workers who were previously economically inactive complain of under- employment less than previously unemployed part-time workers
  • 9. …Implying that strong ‘pull’ factors needed from part-time and flexible jobs market in particular • This includes both wages and other indicators of job quality that can encourage inactive people – who may require a greater investment of time and effort to move into work – to make the leap • Quality of jobs, as well as quantity, is a key focus on the path to full employment 9
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