Abigail McKnight and Kerris Cooper
Published 27 July 2022
In this paper we evaluate the distributional impact of employment policy in the period since the Conservative Government took office in 2015 up until the eve of the Covid-19 pandemic in early 2020. We do this by following the common framework adopted by research papers in this series for the Social Policies and Distributional Outcomes in a Divided Britain research programme. Employment plays a central role is most people’s lives. It provides an income to fund current consumption, to support dependent children and savings for retirement. Employment can also play a crucial role in determining well-being but employment is not evenly distributed either in terms of quantity or quality; with some people facing much higher risks of unemployment and low pay while others enjoy low risks of unemployment and high paid jobs with favourable terms and conditions of employment. Although a wide range of policy areas influence employment outcomes (for example, education and skills, childcare, social security, health, industrial policy and wider management of the economy), employment policy can help to reduce employment inequalities through active labour market programmes, setting minimum wage rates and through regulation of working conditions and workers’ rights. We document record levels of employment over this period and a marked reduction in earnings inequalities following the introduction of the National Living Wage. However, significant challenges remain including increasing in-work poverty, persistent pay gaps in relation to gender, disability and ethnicity, a decade of lost pay growth, which particularly affected young people, and continued challenges to protect precarious workers.