Tuesday, 16 February 2016

SWOB 4:Where Have All the Men Gone? Men, Women & Employment in the UK

The SWOB1 blog questioned the idea that the UK labour market is anywhere near full capacity, at least with regard to potential availability of labour. While the latest wobbles in the stock market may yet dampen real world activity and with it labour market perfromance, the central part of the argument was that men are working much less now than in the 1970s and that this has generated a considerable amount of labour market slack that could, in principle, be utilised.  To see how things have changed over time, the graph below plots the male employment rate by age (% in work at each age)  for two periods, forty years apart, when the total employment rate was broadly the same (see Are we there yet? )

Employment Rates by Age: Men aged 16-80                                                          (data source:LFS)

The graph shows at which ages male employment rates have changed. Clearly employment rates have fallen at every age apart from men over the age of 65.  For younger men, much of this is almost certainly due to increased staying on rates in secondary and tertiary education (and/or lack of opportunities like apprenticeships for 16 year old school leavers). However it is hard to argue that staying on  rates matter much for men over 25 and here employment rates are consistently lower now than in the 1970s.  Had it not been for rising employment rates among workers over 65, the aggregate male employment rate would be even lower

Employment Rates by Age: Women aged 16-80                                                  (data source: LFS)

For women the pattern is quite different. We can see the fall in employment below the age of 25, again almost certainly caused by higher staying on rates and/or lack of opportunities for school leavers. However, unlike the graph for men, employment rates have risen at all ages 25 and over. The dip in employment rates between ages 25 and 40 - that almost certainly was associated with many women not working when children arrived - has disappeared. Women with young children now do not typically leave an employer for very long.  But employment has also risen  sharply among middle aged and older women. Some of the rise among women over 60 will be due to the increase in pensionable retirement age, but it is clear that women are working until 70 and beyond in larger numbers than ever before

And the relevance of this for full employment?  There are around 2.7 million men in the UK aged 25-64 not in work  (LFS 2015 q3). Focusing efforts on getting some of these men back into work would do a lot to raise full employment potential. Could this be done easily? Of these around 550,000 are unemployed, a similar number are long-term sick and around 450,000 say they are retired (early).   The remainder - some 600,000 - would like to work but are not seeking. So most of these jobless men are economically inactive. Efforts to get some of the long-term sick available for work have been going on for nigh on 20 years and not without generating concerns (an issue we will return to in future blogs). It is undoubtedly harder to get people back into the labour force once they become inactive. But, the evidence suggests that some inroads can be made if local - rather than national - economic conditions are conducive. The next blog will explore this in more detail.

Jonathan Wadsworth
CEP & Royal Holloway

No comments: