Harnessing Growth Sectors for Poverty Reduction

Today sees the launch of four major new research projects that will advance understanding of effective strategies for tackling poverty.  This important new research is part of the What Works in Tackling Poverty programme which is being led by the Public Policy Institute for Wales.  Professor Anne Green is leading a project on ‘Harnessing growth sectors for poverty reduction: what works to reduce poverty through sustainable employment with opportunities for progression?’.  Below she blogs about the project.  

Harnessing growth sectors for poverty reduction

Employment and poverty

Work is often heralded as the ‘best form of welfare’ and traditionally movements into employment have been associated with pathways out of poverty. Yet there are growing concerns about in-work poverty: moving into work does not necessarily lead to an escape from poverty – some individuals find it difficult to break out of a ‘low pay, no pay’ cycle, others remain stuck in persistent low-pay.

Official statistics indicate that the numbers of people in employment have increased recently. This is good news. But there remain concerns about the quality of some jobs – especially those associated with temporary contracts and fragmented hours working. There are also worries about declining real wages and about associated implications for productivity and for poverty in both the short- and longer-term.

While interventions to foster moves from worklessness to work will continue to remain an important focus of policy attention, it has become increasingly apparent that more emphasis needs to be placed on what happens to individuals once in work. Welfare policies have begun moving in this direction: the Work Programme’s payment by results model prioritises sustaining work, while the roll out of Universal Credit has led to greater policy interest in advancing in work.

Tackling poverty means focusing on entry to employment, progression in employment and raising the quality of employment. Yet the evidence base on ‘what works’ in entry to employment is generally stronger than that on ‘what works’ in employment progression and in raising job quality.

Linking growth sectors and poverty reduction

In the midst and aftermath of the recent global economic crisis several developed countries – including the UK – placed a renewed emphasis on industrial policy to stimulate economic growth, focusing on so-called ‘growth’ / ‘priority’ / ‘key’ sectors. A foremost – albeit not the sole – criterion for identification of such sectors is favourable prospects for growth in value added. Yet research commissioned by the Joseph Rowntree Foundation revealed that growth in value added does not necessarily go hand in hand with growth in employment, and evidence suggests that it is employment growth, rather than economic growth, that has the greatest impact on poverty in the short-term.

However they are identified and defined, because growth sectors are a focus of public policy attention it is important to consider how they may be harnessed for poverty reduction:

–        by stimulating business growth;

–        by raising job quality;

–        by equipping people (whether or not in employment currently) with the necessary training and skills to meet employers’ needs; and

–        by linking people in poverty to sustainable opportunities within them.

Our Research

We are embarking on new research as part of the What Works in Tackling Poverty programme, which is being led by the Public Policy Institute for Wales and funded by the ESRC, which aims to shed light on ways in which growth sectors can be effectively harnessed for poverty reduction.  The project involves:

–        identification of growth sectors and an assessment of their characteristics

–        quantitative analysis of large survey data on patterns of job mobility in different sectors (both within internal labour markets and through inter-organisational and inter-sectoral moves) – to ascertain what current patterns of labour mobility look like and so to pinpoint where policy interventions might be targeted

–        bringing a disparate evidence base together through a synthesis of existing sub-national, national and international evidence on work entry, sustainability, progression and job quality, to identify ‘good practice’ examples from which policy makers and delivery organisations might learn

–        case studies of practical initiatives to harness growth sectors for poverty reduction – to highlight the facilitators and barriers faced currently and to identify what opportunities there are to help policy work better in the future

–        synthesis and testing of findings, to inform future policy interventions in Wales and beyond.

The research is designed to provide evidence that will help improve policy making and delivery, and we look forward to working with the Public Policy Institute for Wales and with policy makers in Wales and beyond.

 Professor Anne Green, Institute for Employment Research, University of Warwick

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