1 active labour market policies in the uk: what is the secret of the british success? 10-11 march...
TRANSCRIPT
1
Active Labour Market Policies in the UK: What is the Secret of the British Success?
10-11 March 2005
Bill Wells: UK Department for Work & Pensions.
at:
‘How to implement the Lisbon Agenda’
An International Seminar for Experts organised by the Cicero Foundation.
2
UK Active Labour Market Policies…
• The structural features of the UK labour market.– Diverse and dynamic– Work Pays– Better qualified & skilled– Centralised benefit and labour market help.
• How active labour market policies fit in with the structure of the UK labour market.– Unemployment benefits– Inactive Benefits
• Conclusions.
3
United Kingdom
0%
10%
20%
30%
40%
50%
60%
0 20to24 36 40 44
Germany
0%
10%
20%
30%
40%
50%
60%
0 20-24 36 40 44
France
0%
10%
20%
30%
40%
50%
60%
0 20-24 36 40 44
In terms of hours the UK labour market is very diverse…
Italy
0%
10%
20%
30%
40%
50%
60%
0 20-24 36 40 44
11 % work40 hours
15% work38 hours
29% work40 hours
11% work39 hours
15% work36 hours
39% work40 hours
33% work 35 hours
17 % work 50+ hours
4
..& it is dynamic. Lots of people find new jobs each year
Proportions moving into employment in the last three months over 4 quarters
0%
5%
10%
15%
20%
25%
30%
35%
disabled
not disabled
qualifications
no qualifications
social housing
non social housin
g
lone parents
4.7 m
0.8 m
4.9 m0.5 m
0.13 m
0.7 m4.9 m
Source: Cross sectional LFS datasets, sum of 4 quarters
5
Other features…
• People are generally better off in work.– Taxes & benefits are organised so that work pays
• Individuals can take up a wider range of jobs.– Skills and qualifications are improving.
• Comprehensive and centralised benefit system– Benefit payment and active labour market help can
be combined.
6-70% -60% -50% -40% -30% -20% -10% 0% 10% 20% 30% 40% 50% 60% 70%
…% remaining unemployed …% leaving unemployment
52% are still unemployed after 3 months
36% after 6 months
27% after 9 month
20% after one year
11% after 18 months
8% after 2 years
5% after 3 years
4% after 4 years
proportion leaving in first three months 48%
between 3 and 6 months 16%
between 6 and 9 months 9%
between 9 and 12 months 7%
between 12 and 18 months 9%
between 18 and 24 months 3%
between 2 and 3 years 3%
between 3 and 4 years 1%
From 1986 when, of those becoming unemployed...
7
Unemployment Benefit System
• Jobseeker’s Allowance– Rights & Responsibility agenda– Assisted job search– Increased help as duration increases
• New Deal– Ends long term unemployment– Gateway– No fifth option
8-50% -40% -30% -20% -10% 0% 10% 20% 30% 40% 50% 60% 70%
…% remaining unemployed …% leaving unemployment
40% still unemployed after 3 months
21% after 6 months
11% after 9 months
7% after one year
3% after 18 months
1% after 2 years
0.5% after 3 years
0.2% after 4 years
proportion leaving in first three months 60%
between 3 and 6 months 19%
between 6 and 9 months 10%
between 9 and 12 months 4%
between 12 and 18 months 3%
between 18 and 24 months 2%
between 2 and 3 years 0.5%
between 3 and 4 years 0.2%
…to 2004 when, of those becoming unemployed
Source: DWP
9
Proportion of JSA inflow leaving within a certain period
3 months
4 years3 years2 years1 year9 months
6 months
All ages
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
10
Proportion of JSA inflow leaving within a certain period
18-24 year olds
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
3 months
3 years2 years1 year9 months
6 months
4 years
11
Helping to deliver the best claimant unemployment record since the mid 1970s…
0
500
1,000
1,500
2,000
2,500
3,000
3,500
19
70
19
72
19
74
19
76
19
78
19
80
19
82
19
84
19
86
19
88
19
90
19
92
19
94
19
96
19
98
20
00
20
02
20
04
Total claimantunemployment
Over one year
Thousands
12
…with Jobcentre Plus and the New Deal ensuring that the long term unemployed have benefited.
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,0001
96
2
19
65
19
68
19
71
19
74
19
77
19
80
19
83
19
86
19
89
19
92
19
95
19
98
20
01
20
04
Aged 18-24 on JSA over 1 year
All on JSA over 1 yr
13
…and so there is now little difference from the national ILO unemployment/population ratio
Unemployment rates of the SR2002 PSA groups
0%
3%
6%
9%
12%
15%
Spring92 Spring94 Spring96 Spring98 Spring00 Spring02 Spring04
Ethnic Minorities (4qtraverage)
Lone Parents
SR 2002 30 LADS(4qtr avg)
The lowest qualified
PSA Disabled
Total Working Age
Over 50's
14
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,0001
97
9
19
81
19
83
19
85
19
87
19
89
19
91
19
93
19
95
19
97
19
99
20
01
20
03
Unemployment benefits Incapacity benefits Lone parents
Unemployment is low. The number on lone parent benefit has fallen. And the number on incapacity
benefit has peaked.
15
To make a big difference we now need to concentrate on people on sickness & disability benefits and long
durations...
Working Age claimants of key benefits
0
500
1,000
1,500
2,000
2,500
3,000
3,500
JSA 18-24 JSA 25-49 JSA 50+ Lone Parents Sick/disabled Other
2+ years
1-2 years
6-12 months
0-6 months
Thousands
16
…but the problem is that people on inactive benefits are inactive…
Source: Derived from DWP administrative system and Labour Force Survey .
Chart should be used for indicative purposes only due to undercount of benefits on LFS
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
JSA 18-24 JSA 25-49 50 and over Incapacity Benefits lone parents any other form of IS
Inactive
ILO unemployed
In employment
17
.and you can’t get a job if you aren’t looking for a job. Flows from inactivity in one quarter into employment in the next quarter
(excluding those moving from education and those entering retirement, longitudinal LFS)
0
5
10
15
20
25
30
35
40
ws93
sa93
ws94
sa94
ws95
sa95
ws96
sa96
ws97
sa97
ws98
sa98
ws99
sa99
ws00
sa00
ws01
sa01
ws02
sa02
ws03
pe
rce
nta
ge
ILO unemployed Inactive; actively seeking
Inactive; not seeking, wanting work Inactive; not seeking, not wanting work
Source: LFS
18
Worklessness is now primarily a problem of inactivity not unemployment…
Benefits / Pensions as a percentage of Working Age population 16- 64 (GB) - Historical
0%
5%
10%
15%
20%
25%
30%
35%
19
79
19
80
19
81
19
82
19
83
19
84
19
85
19
86
19
87
19
88
19
89
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
IB IB st L ISDP Lone parentsMIG/PC men and women State Pension - Women Other DLA onlyUnemployed Workless no benefits
35%
25%
30%
20%
15%
10%
5%
0%
19
Developments in Welfare to Work Policy
• Jobcentre Plus: Roll out 2001 to 2006;
• New Deal for Lone Parents;
• New Deal for Disabled People;
• Building on New Deal; and
• Incapacity Benefit Reform.
20
Modern Jobcentre Plus Services
Self-service and
face to face
advice brought
together
21
Lone Parents and Partnered Mothers Employment Rates (1978 – 2004)
30%
40%
50%
60%
70%
80%
90%
1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004
lone mothers (pre-1992), lone parents (post-1992)
partnered mothers (GHS/LFS)
Work: Families and Children
22
IB Reforms – Early Pathways findings
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Apr-01
Jun-01
Aug-01
Oct-01
Dec-01
Feb-02
Apr-02
Jun-02
Aug-02
Oct-02
Dec-02
Feb-03
Apr-03
Jun-03
Aug-03
Oct-03
Dec-03
Feb-04
Apr-04
Month of claim
Off
-flo
w r
ate
National
Phase 1
Phase 2
Six month Incapacity Benefit Off-flows
23
The UK has one of the best labour markets in the world…
0%
10%
20%
30%
40%
50%
60%
70%
80%
UK
Canad
aUS
Japa
n
Ger
man
y
Franc
eIta
ly UK
Canad
aUS
Japa
n
Ger
man
y
Franc
eIta
ly
Em
plo
yme
nt
0%
2%
4%
6%
8%
10%
12%
Un
em
plo
yme
nt
Employment rate (2003) Unemployment rate (Nov-04)
24
…with more people in work than ever before and employment rates at historic highs.
65%
70%
75%
80%
195
9
19
62
19
65
196
8
197
1
19
74
19
77
198
0
198
3
19
86
19
89
199
2
199
5
19
98
20
01
200
4
Percentage of the working age population in work
65%
70%
75%
80%
195
9
19
62
19
65
196
8
197
1
19
74
19
77
198
0
198
3
19
86
19
89
199
2
199
5
19
98
20
01
200
4
Percentage of the working age population in work
25
This might involve
(indicative figures):
• 1 million IB claimants in
work
• 300K more lone
parents in work
• 1 million more older
workers in work (incl.
those post SPA)
• Higher general female
employment (due to
better childcare)
Meeting our aspiration of an 80% employment rate would require around 2.5 million more people in work
0% 1% 2% 3% 4% 5% 6% 7%
In work
Out of work
Sickness and disability
Family and homeresponsibilities
Education and training
Early retirement
Other inactive
Unemployed
Current Potential
Percentage of 16-64 population (indicative figures)
Current working age
Women 60-64
Over 65s
(men 16-64 & women 16-59)
26
Challenges for the future
• Promoting fairness and opportunity for all Incapacity Benefit Lone Parents
Older workers (incl. equalisation of SPA)
Areas of deprivation Ethnicity Low skills
27
CONCLUSIONS
If you look for a job…
…there is a good chance that you will find one...
(with a little help from your friends).
The UK has done a lot…
…but there is still more to do.