'Flexible jobs' cut unemployment - but do not often lead to permanent, full-time work

Temporary, part-time, and self-employed jobs have been the major route by which unemployed people get back into work during the mid-1990s. But a study published by the Joseph Rowntree Foundation shows that family incomes can suffer - with only a minority finding 'flexible employment' a stepping stone to better or more permanent jobs.

Using data from a national sample of over 850 people who were unemployed in 1990-92, researchers at the Policy Studies Institute found that three-quarters of the jobs they subsequently took were temporary, part-time, self-employed or required a substantially lower level of skills than their previous employment. Following the same sample through to 1995, it emerged that:

• Fewer than a quarter of those who had taken part-time jobs were in full-time work.
• The majority of those who had become self-employed, remained so.
• There was little evidence of upward mobility among those who had taken jobs below their previous skill level.
• While 38 per cent of those who took temporary work were now on permanent contracts, 25 per cent remained on temporary contracts and 36 per cent were, again, unemployed.
• Despite the growth in 'flexible' jobs, one-fifth of the sample remained unemployed throughout the period under study. By 1995, most of them had ceased actively looking for work. Women with young children and older men encountered particular difficulties finding jobs, as did single people of either sex.

Effects on family income Looking at family finances over two to four years, the researchers found that some types of 'flexible' job had proved less disadvantageous than others. Comparing the family incomes of individuals who initially took jobs at a lower skill level with those of similarly qualified men and women who moved into full-time, permanent work, they concluded that there were no adverse financial consequences in the medium term. The same was true for men who became self-employed or accepted temporary jobs.

However, families were found to have lost out financially where women had taken temporary work and where either women or men had moved into part-time jobs:

• Women who initially went into temporary or part-time jobs had family incomes that were 15 per cent lower in the medium term than those who left unemployment for a full-time, permanent job.
• The family incomes of women and men working part time would have been lower still if spouses and other family members had not tried to compensate by undertaking more work themselves.

Policy options The researchers, Dr Michael White and John Forth, conclude that more should be done to help people in part-time and temporary jobs to improve their job status and earnings and to tackle the particular disadvantages experienced by women. The policy options that they suggest include:

• removing the lower earnings limit on employers' National Insurance contributions, which currently provides a substantial incentive for employers to replace full-time with part-time jobs;
• training programmes to help those in flexible jobs to acquire new skills and increase their long-term employment potential;
• extension of childcare provision and childcare subsidies, enabling more women to enter employment or increase their hours of work.

Michael White said: "Flexible jobs are so dominant among the opportunities available to unemployed people that it would be difficult to impose direct restrictions without endangering the job market. Nevertheless, a more neutral set of public policies could increase the scope for more full-time, permanent jobs to be established and enable those in part-time and temporary jobs to become more upwardly mobile."