1

The path to full employmentReduce inactivity, increase

flexibility

Laura Gardiner, Resolution Foundation@lauracgardiner

January 2016

2

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

3

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

4

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

5

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

6

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

7

…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

8

…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

9

…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