People’s age is putting them at a disadvantage in the labour market, says Claire Turner, with changes over time creating ‘insiders’ and ‘outsiders’.
It is often suggested that different generations have different experiences of the labour market. JRF research out today, carried out by NIESR, shows that this doesn’t always work how you might expect. In general, the youngest and oldest workers face greater disadvantage than those in mid-life, especially men. This has been the case for the past two decades.
The new research analysed Labour Force Survey data over a 20-year period and reviewed existing research and policy, meaning it was possible to compare the experiences of three cohorts at the same age. It found that age and life stage (e.g. leaving home, starting a family) were more important factors in employment opportunities than the generation in which people were born.
Nevertheless, the research points to significant changes over time. The relative position of young people in the labour market has deteriorated in recent years, especially for those least qualified. Being out of education, employment and training between ages 18 and 25 is likely to inflict longer-term damage on employment prospects. The relative position of some older people (mainly those in secure work and high-status occupations) has improved, but losing your job in later life makes individuals much more vulnerable to long-term unemployment.
Lack of qualifications was the primary cause of disadvantage. This has increased over time and has led to a concentration of younger and older workers in part-time, low-paid, temporary and insecure posts where conditions of employment and access to training are generally poorer.
Despite labour demand being projected to rise, underemployment was widespread among younger and older workers, in terms of working fewer hours and underuse of skills. Projections of future labour demand suggest significant medium-term labour shortages. Although overall expansion will be concentrated in higher-level jobs, demand will remain high for low- and middle-ranking jobs, to replace retirees.
The labour market is systematically advantageous to ‘insiders’ – men in mid-life and those in secure jobs. This is at the expense of ‘outsiders’ – young people and older unemployed people, especially those with few or no qualifications. These ‘outsiders’ are more likely to work in sectors and low-quality jobs providing little security or opportunity for progression.
While the study found little evidence of differences across generations, the evidence that disadvantage has been increasing over time should be of concern to policy-makers.
Action to address these issues needs to focus on those with low qualifications, and on improving the quality of flexible work and of training and qualifications. This is the only way to enable the youngest and oldest in the labour market escape from the cycle of low-paid, low-skilled and insecure work.