The shifting shape of worklessness creates new challenges

Published on Jobs, Skills and Pay

At the heart of the Welfare Reform and Work Bill – now experiencing a somewhat bumpier than expected ride through the House of Lords – sits a commitment to further reduce worklessness and at the same time move closer to full employment. Substantial progress is already being made on both – the proportion of children living in a household in which nobody works is down by a third since 1996, while the employment rate is at a record high. However, it does not always follow that the two move in step.

A new RF report today shows that modern day worklessness has shifted towards households with a disabled adult. The challenge of how to tackle workless households has changed and needs a fresh policy response.

By 1996 one-in-five households had nobody in work, an outcome that led to high levels of child poverty. It followed a period in which the number of workless households climbed regardless of whether employment levels rose or fell. Work had become polarised across society into dual earning and no-one earning households.

Over the last two decades a raft of policy interventions under successive governments have sought to tackle high levels of worklessness – particularly among parents. A blend of ‘push’ and ‘pull’ measures – increased job search conditions, practical support to find work, improved financial incentives and greater support with childcare costs – alongside regulatory change, such as the extension of maternity rights, have combined to support the substantial drop in worklessness among parents (see figure). The progress in tackling worklessness among single parents stands out – the proportion not in work has fallen by two-fifths since 1996, outperforming overall employment growth.

Key policy interventions to support parental employment

workless chart

There are now very few households in which a parent does not work if children are of school age or parents are not disabled. Just over one-in-ten workless households are non-disabled single parents, and two thirds of these (64 per cent) have a child under the age of five. Just three per cent are now non-disabled couple parents.

Modern day worklessness has shrunk and shifted shape. Households with a disabled adult now constitute over half of all workless households – despite employment gains over the period. The blend of interventions that succeeded with parents have been less successful among disabled people. While work may not be suitable for all disabled people, more effectively tackling their barriers to work will provide greater opportunity to go into work. To make further significant reductions in worklessness will mean tackling tougher cases.

The challenge has changed. Finding an appropriate balance between care and work could prove tricky for parents with very young children. Disabled people may also have multiple and complex barriers to work. The upcoming Disability White Paper set to be published this Spring provides a key opportunity for the government to set out its plans. Policy in this area requires a radical rethink, focusing on the role of the state and employers in supporting people both into work and to remain in work. A forthcoming Resolution Foundation report will explore a new approach to boosting disabled employment, as part of our ongoing project into securing full employment.