With the national roll-out of the Universal Credit system at the start of this year, it is worth reminding ourselves of what we do and don’t know about the issue often used to justify the radical overhaul of the previous benefit system, intergenerational worklessness.
Despite widespread claims, there is little actual evidence of generations of families who have never worked in the UK. Analysis of the Labour Force Survey in 2010 suggested that actually only 0.8 per cent of all households had more than one generation who had never worked residing there. When considering generations that live apart using longitudinal birth cohort studies, there is still little evidence of individuals in one generation never working, let alone two generations. Work for the Joseph Rowntree Foundation looking to find this type of extreme intergenerational worklessness struggled to find any evidence of it across a number of geographical areas.
That is not to say that intergenerational worklessness does not exist. There is a higher risk of workless spells in adulthood for those with a workless father in childhood – evidence from the UK suggests that sons with workless fathers in childhood spend around 10 to 15 percentage points more time out of work than their counterparts with employed fathers. Looking across local labour markets at areas where there is little unemployment compared to areas of high unemployment gives a telling insight into this issue – in areas with very little unemployment there is no difference in the employment opportunities of those growing up with workless fathers compared to employed fathers. In contrast, in areas where there is a lot of unemployment and therefore fewer jobs, sons with workless fathers spend significantly more time out of work than sons with employed fathers. This suggests that a culture of welfare dependency is unlikely to be the key driver of this transmission across generations as if this were the main factor then you would have a higher likelihood of experiencing worklessness if you had a workless father regardless of economic conditions.
New work, funded by the ESRC Future Research Leaders grant scheme, is now under way to consider how intergenerational worklessness varies across countries with different labour markets, education institutions and welfare systems to attempt to better understand what is driving this phenomenon. If we compare initial results from two countries with very different access to welfare payments – the UK and the US, the story is very similar. Even though young men in the US have very little access to welfare, particularly during early labour market experiences given their contributions-based system, there are striking similarities in findings on intergenerational worklessness there compared to the UK. As in the UK, sons with workless fathers in childhood in the US spend around 10-15 per cent more time out of work than those with employed fathers and this too varies by the local labour market conditions experienced. This further supports the notion that intergenerational welfare dependency is unlikely to be the main driver of this issue as if it were, we would expect to see more intergenerational worklessness in the UK where there is greater access to welfare.
The issue then seems to be one of fragile employment, with sons with workless fathers more vulnerable to cycling in and out of jobs and the labour market. Exploring how this relationship varies across a range of different countries will give us both a better understanding of the scale of the issue here in the UK, and a better understanding of the characteristics of places that have no issue of workless spells transmitting across generations compared to countries where this is a real issue.
About the author: Dr Lindsey Macmillan is an economist at the UCL Institute of Education. Her work has examined a range of topics related to intergenerational worklessness and social mobility. Lindsey works closely with government and third sector organisations, including the Social Mobility and Child Poverty Commission.