Transcript Inactivity Rate (GB, LFS, working age)

UNEMPLOYMENT DEALT WITH?
NEXT STOP THE ECONOMICALLY
INACTIVE
Saranna Fordyce
Economy and Labour Market Division
In summary



Need to deal with the big stock of inactive men
and women who are:
- disabled with low qualifications
- lone parents
Inactivity is a very different concept to
unemployment
Those that don’t look for work don’t find work –
and the vast majority that are on inactive benefits
aren’t looking.
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DWP
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Plan of presentation:
What is inactivity?
 Recent trends
 Examining DWP PSA target groups
 Reasons for inactivity
 Focus on the low qualified disabled
 The difference between unemployment and
inactivity: by not seeking work inactives
will not find work

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A person is defined as inactive
if they are out of work, and
Are not actively seeking work, and/or
 Are unavailable to start work.

Inactives may be on benefit, or for example
people caring for children with working
partners or students or are not on benefits
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In Great Britain:
• 26.8 million people are in employment
• 1.5 million people are ILO unemployed
• 7.7 million people are inactive
- around 4 million of these are on
inactive benefits
 a fifth of the working age GB population are
inactive
Spring 2002 LFS, GB, working age
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Inactivity rate fallen over the last 30 years,
but it has stopped moving with the
economic cycle
Inactivity Rate (GB, LFS, working age), ILO Unemployment rate (UK, OECD, active
population)
Inactivity rate (GB)
ILO unemployment rate (UK)
30
25
20
15
10
5
19
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
2099
2000
2001
02
0
Sp
ri
n
Sp g 1
ri 987
n
Sp g 1
ri 988
n
Sp g 1
ri 989
n
Sp g 1
ri 990
n
Sp g 1
ri 991
n
Sp g 1
ri 992
n
Sp g 1
ri 993
n
Sp g 1
ri 994
n
Sp g 1
ri 995
n
Sp g 1
ri 996
n
Sp g 1
ri 997
n
Sp g 1
ri 998
n
Sp g 1
ri 999
n
Sp g 2
ri 000
n
Sp g 2
ri 001
ng
20
02
Inactivity rate has been rising/flat for all
male age groups over the last 10 years …
Male inactivity rates (LFS, GB working age excluding those in FTE)
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
50-64
16-17
35-49
18-24
25-34
The picture is more mixed for women, with
younger age groups rising and older age
groups falling
Female inactivity rates (LFS, GB working age excluding those in FTE)
45%
40%
35%
30%
25%
20%
15%
10%
5%
Sp
ri
n
Sp g 1
ri 98
n
7
Sp g 1
ri 98
n
8
Sp g 1
ri 98
n
9
Sp g 1
ri 99
n
0
Sp g 1
ri 99
n
1
Sp g 1
ri 99
n
2
Sp g 1
ri 99
n
3
Sp g 1
ri 99
n
4
Sp g 1
ri 99
n
5
Sp g 1
ri 99
n
6
Sp g 1
ri 99
n
7
Sp g 1
ri 99
n
8
Sp g 1
ri 99
n
9
Sp g 2
ri 00
n
0
Sp g 2
ri 00
ng 1
20
02
0%
50-64
16-17
25-34
18-24
35-49
The main reason given for inactivity is
being sick or disabled for men and
family/home for women
Spring 2002 LFS (WA, excluding those in full time education)
proportion of all inactive
60%
50%
40%
30%
20%
10%
0%
LT sick or
disabled
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retired
family/home not looked family/home LT sick or
disabled
male
retired
female
DWP
other
reason
9
For PSA target groups employment rates are
generally up …
Employment rate (LFS spring quarters, working age)
80%
75%
70%
w.a. population
over 50s
65%
30 LADs
60%
ethnic min
lone parents
55%
lowest qual.
disabled
50%
45%
40%
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
… and unemployment is down …
Unemployment rate (LFS spring quarters, working age)
25%
20%
lone parents
ethnic min
15%
lowest qual.
30 LADs
disabled
10%
w.a. population
over 50s
5%
0%
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
But mixed picture for inactivity
Inactivity rate (LFS spring quarters, working age)
55%
50%
45%
disabled
lowest qual.
40%
lone parents
ethnic min
35%
over 50s
30 LADs
30%
w.a. population
25%
20%
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
Fall in demand for low-skilled labour*

Trade story: Rise in productivity in unskilled
labour intensive manufacturing in LDCs +
reduction in trade barriers + increase in supply of
unskilled labour as workers leave agriculture in
LDCs and move into manufacturing at the expense
of unskilled workers in developed countries.

Technology story: Technological progress is
biased in favour of skilled workers.
*Stephen Nickell, RES Conference, 8 April 2003.
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Inactivity rate of the disabled without
qualifications is very high and increasing…
Inactivity rate for disabled (LFS spring quarters, working age)
qualified
no qualification
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
1992
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1993
1994
1995
1996
1997
DWP
1998
1999
2000
2001
2002
14
…but this is not a result of compositional
changes
Breakdown of the working age population,excluding those in FTE, GB, LFS winter quarters
disabled and no qualifications
disabled and qualified
not disabled and no qualifications
not disabled and qualified
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
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Inactive population levels by disability and
qualification
(LFS winter quarters, excluding those in FTE, GB, LFS, working age)
1.6m
1.2m
disabled and no
qualifications
not disabled and
qualified
not disabled and no
qualifications
disabled and qualified
0.8m
2.3m
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Correlation between areas of high
unemployment receipt and high inactive
benefit receipt
Benefits admin data, August 2002
% claiming inactive benefits
30
R2 = 0.5787
25
20
15
10
5
0
0
1
2
3
4
5
6
7
% claiming unemployment benefit
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But there is no correlation between changes
over time
Benefits Admin data, change between August 2002 and August 1997
change in % on inactive benefits
3
2
R = 0.0203
2
1
0
-6
-5
-4
-3
-2
-1
0
1
2
-1
-2
-3
-4
change in % on unemployment benefits
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And there is no correlation between
inactivity and the jobs ratio (local jobs/local
population)
Local Authority Districts
45
Inactivity rate (%), 2001
40
35
30
25
20
15
10
5
R2= 0.027
0
20
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30
40
50
60
70
80
90
Jobs ratio, 2000
DWP
100
110
120
130
140
19
People who have been inactive for longer
periods of time tend to be on sickness and
disability benefits
Key benefits by duration of claim (administrative data, August 2002)
thousands
3,500
2 + years
1 - 2 years
6 - 12 months
3 - 6 months
0 - 3 months
3,000
2,500
2,000
1,500
1,000
500
0
Unemployed
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Sick and
Disabled
DWP
Lone Parents
Others
20
The majority of claimants of inactive
benefits are inactive so most will not be
seeking work.
Economic status by client group, proportions, LFS, spring 2002
100%
90%
80%
inactive
70%
60%
employed
50%
40%
ILO
unemployed
30%
20%
10%
0%
w.a.
population
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claimant
unemployed
sick or
disabled
DWP
lone parents others on IS
21
People not seeking work are unlikely to
find work
Flows from inactivity in one quarter into employment in the next quarter
(excluding those moving from education and those entering retirement, longitudinal LFS)
35
30
ILO unemployed
25
Inactive; actively
seeking
Inactive; not seeking,
wanting work
Inactive; not seeking,
not wanting work
20
15
10
5
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DWP
2
w
s0
1
w
s0
0
w
s0
9
w
s9
8
w
s9
7
w
s9
6
w
s9
5
w
s9
4
w
s9
w
s9
3
0
22
And very few of those that are inactive are
seeking work …
(% out of work by economic status, LFS)
100%
80%
Other
inactive
60%
Inactive seeking
40%
Unemployed
20%
0%
WA popn
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Ethnic
minorities
Disabled
Lone
parents
DWP
No quals
Over 50s
23
In summary



Need to deal with the big stock of inactive men
and women who are:
- disabled with low qualifications
- looking after the family and home
Inactivity is a very different concept to
unemployment
Those that don’t look for work don’t find work –
and the vast majority that are on inactive benefits
aren’t looking.
17-Jul-15
DWP
24