Published 31 March 2015
The evaluation of the Coalition’s employment policy shows that although the labour market was remarkably resilient over the recession in terms of employment rates, this was largely driven by falling real wages and increases in self-employment. For many, employment became more precarious through the growth in zero hours contracts and insecure self-employment on very low incomes. The young were hit hardest with the recession having differential generational consequences, as unlike in previous recessions older workers did not suffer from skill redundancies as the recession was not accompanied by large scale industrial restructuring. In fact there was a redistribution of employment from younger workers to older workers including those working beyond the state pension age. The Government introduced a range of new active labour market programmes and reformed existing programmes but these reforms are best described as an evolution rather than a revolution as they built on a strong policy platform put in place by the previous Labour Government. Despite employment reaching new record levels, the performance of the Government’s active labour market programmes did not meet expectations and for some time, and particularly for some groups, the new programmes delivered results below those achieved by the programmes they replaced. A greater emphasis on private providers delivering services and being paid according to the results they achieve with higher financial incentives available for groups requiring additional help (in particular groups whose work capability is affected by illness or disability) has not improved relative outcomes for the most disadvantaged groups. The fiasco around work capability assessments and the fact that active labour market programmes are still failing to meet the needs of those deemed capable of work in a limited capacity suggests that a major review is now required for this group of claimants.
Paper Number CASE/187:
Download PDF - The Coalition's Record on Employment: Policy, Spending and Outcomes 2010-2015
JEL Classification: J21; J68; J08