In this guest post, Lindsey Macmillan and Paul Gregg look at the claim that there are generations within families who have never worked. From their position as probably the foremost experts on intergenerational worklessness in the UK, they find the evidence wanting…
The government and indeed all major political parties have expressed concern about low social mobility in the UK. These concerns were based on evidence that Britain became less meritocratic for a generation leaving school in the late 1980s than it was previously. Recently, frequent references have been made by politicians about the issue of intergenerational worklessness in the UK, citing families with two or three generations who never work and how we need to deal with this ‘culture of dependency’.
“Our recent *Housing Poverty* report concluded that Britain’s social housing estates, once stepping stones of opportunity, are now ghettos for our poorest people. Life expectancy on some estates, where often three generations of the same family have never worked, is lower than the Gaza Strip” – Iain Duncan Smith MP (2009)
Despite the frequency of these statements and unlike the picture for social mobility, there has been no hard evidence on the subject. Before the process of policy-making begins, the onus is on researchers and politicians to assess both the scale and nature of any problem here.
Bringing evidence to the table
Evidence from the Labour Force Survey, from which most of the labour market statistics come, suggests that of all households with two or more generations of working age co-residing (which make up 1 in 5 of all UK households), only 0.3% or 15,000 households are in a position where both generations have never worked. In around a third of these households the younger generation has only been out of full time education for less than 1 year.
Looking at where generations overlap in the same household is somewhat restrictive. If we look at data where fathers and sons can be tracked even when observed in different households, the two British birth cohorts (National Child Development Study and British Cohort Study) and the British Household Panel Survey, the story remains the same.There are very few families who never work across generations, driven by the fact that less than 2% of sons in each of the three data sources considered have never worked by age 23 and under 1% have never worked by age 29. Unsurprisingly then there is no correlation in workless spells across generations if we focus on ‘never working’ for two of the three British data sources considered because very few people never work. It just doesn’t exist on the scale people seem to think it does.
This is not to say however that intergenerational worklessness doesn’t exist. In 180,000 households (4% of the multigenerational households of working age), both generations are currently out of work and in 140,000 households both generations have been out of work for over a year. In data sources that track families through their working lives, sons with workless dads at age 10 to 16, spend 8-11% more time out of work from 16-23 than sons with employed dads. They are also 15-18% more likely to spend a year or more in concurrent spells out of work during this period.
Previous evidence suggests that lengthy spells out of work like this in youth can have long term scarring effects on future wages and future employment. So while the discourse of ‘never working’ families is wrong, there is clear evidence of people who are cycling in and out of employment having children who are also more likely to have a weaker attachment to the labour market.
Interestingly, if we look at the intergenerational correlation in workless spells across different local labour market conditions, sons with workless dads in tighter labour markets are just as likely as sons with employed dads to be workless. It is only in the labour markets with high unemployment that sons with workless dads are disproportionately more likely to be workless than sons with employed dads.
Figure: Variation in the intergenerational correlation of worklessness in the BCS by the county level unemployment rate based on the families’ county of residence in 1986
The ‘culture of dependency’ argument is that in families where people receive welfare, this is a more acceptable lifestyle choice than in families where nobody claims. This clearly isn’t true in tighter labour markets. The fact that the intergenerational relationship varies by outside economic forces suggests that a simple ‘culture of dependency’ story does not hold. Whilst welfare could be a reason why people turn away from the labour market, the problem only exists when work disappears.
An alternative view is that in these high unemployment areas employers can be more particular about the skill-set that they require meaning that those individuals with the lowest skills get very few opportunities. William Julius Wilson makes this argument in his most recent book ‘More than Just Race’. Research suggests that sons with workless dads are not only more likely to have lower cognitive skills and educational attainment but they are also more likely to have lower soft skills including self-esteem and extroversion. These are key skills associated with future employability.
This argument emphasises the role of disadvantage, which makes young people from deprived families the most marginal workers at the back of the queue for jobs when local employment is scarce. If unemployment persists, eventually young people begin to turn away from employment and find other means of existing. Whilst these individuals might be on welfare, it’s not necessarily the reason that they turned away from work in the first place. The lack of opportunities available to these young people leads to the detachment.
The ‘never working’ family may be an easier sound bite but it is not representative of the true situation. For those families where generations struggle to hold stable work, local labour market conditions play a crucial role. More should be done to consider the evidence available rather than attaching labels such as ‘underclass’ to a whole group in our society.