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Journal Article

Patterns of non-employment, and of disadvantage, in a recession

Authors

Publication date

2009

Summary

There has been much commentary on the likely consequences of the current recession
for the living standards of British households. The UK count of unemployment
doubled over a 15 month period between 2008 and 2009. It is likely that the situation
will get worse before it gets better.
This short paper aims to contribute to the live debate about the current recession in the
United Kingdom by analysing the impact of the recessions of the early 1980s and
1990s on non-employment patterns among people in the main range of working ages.
Two complete business cycles are observed, while long-term trends in patterns of
non-employment are also taken into account. The implication is that the effects
observed in earlier business cycles are likely to be repeated now.
The analysis is based on the General Household Surveys undertaken almost every
year between 1974 and 2005, with a total sample of 360,672 adults. Their risks of
non-employment can be related both to the year in which they were interviewed, and
to other characteristics such as family structure, age, qualifications and so on.
Complex interactions between characteristics and annual measures of the health of the
labour market can be used to predict what the position in the late 2000s would be, first
if there was no recession, and second if there was a recession (eg if the unemployment
rate doubled).
Most narratives concentrate on the rate of unemployment as the key indicator -
counting only those who are actively seeking work. But the analysis suggests that
non-employment rates among other groups (eg mothers or disabled people) are also
influenced by cyclical effects. For every 100,000 increase in the number of
unemployed people, we can expect a further increase of 27,000 in the number of
people reporting that they do not have a job, for other reasons.
It has been suggested that those already facing labour market disadvantage would be
most likely to face additional problems if jobs are scarce. That is not the consistent
conclusion of the analysis.
· The findings for education and ethnic group tend to support the vicious-circleof-
disadvantage hypothesis: people with poor educational qualifications, and
members of minority ethnic groups, are both exceptionally sensitive to a
recession.
· The findings for gender, age and disability tend to the opposite, implying that
existing disadvantage is stable across business cycles. Women, older people
and disabled people have poor underlying job prospects, but are not much
affected by a temporary downturn.
· There is no consistent pattern suggesting that people living in already
disadvantaged regions are either more or less sensitive to cyclical factors than
more prosperous regions.

Published in

Economic and Labour Market Review

Volume and page numbers

3 (12) , 62 -73

DOI

http://dx.doi.org/10.1057/elmr.2009.207

ISSN

16

Subjects

Unemployment and Economics

Links

http://serlib0.essex.ac.uk/record=b1645719~S5

Notes

Albert Sloman Library Periodicals *restricted to Univ. Essex registered users*; serial sequence - indexed article


Related publications

  1. Patterns of non-employment, and of disadvantage, in a recession

    Richard Berthoud

    1. Unemployment
    2. Economics
  2. Patterns of non-employment, and of disadvantage, in a recession

    Richard Berthoud

#513149


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