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The path to full employmentReduce inactivity, increase
flexibility
Laura Gardiner, Resolution Foundation@lauracgardiner
January 2016
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In normal times more people enter work from inactivity than unemployment
The debate around
boosting employment
tends to focus on reductions
in unemploymen
t
But outside of recession /
recovery phases, most new entrants
come from economic inactivity
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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
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A framework for developing full employment targets
Population growth
‘Nearslack’
‘Low-activity’
workforce participati
onUnemployed550,000?
Hours increases? (emp. equiv)
c.1.1 million by 2020?
Regional gapsc. 900,000?
Further trend / policy driven improvements? by 2020
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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
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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
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…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
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…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
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…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