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Labour market policy and well-being APPG on Well-Being Economics 10 th March 2014, London Saamah Abdallah Centre for Well-being nef (the new economics foundation). - PowerPoint PPT Presentation
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Labour market policy and well-being
APPG on Well-Being Economics10th March 2014, London
Saamah AbdallahCentre for Well-beingnef (the new economics foundation)
Policy should seek to enhance people’s well-being:
“it will lead to government policy that is more focused not just on the bottom line, but on all those things that make life worthwhile.”
David Cameron, Nov 2010
…So how does that apply to labour market policy?
Key job-related well-beingdeterminants:• Work-life balance and working hours• Fair pay• Job security• Safe working environment
• Achievable, job-fit and skill-use• Relations at work and with managers• Control• Social value
Fair pay
Understanding Society Survey, 2009-2010
0 20000 40000 60000 80000 100000 120000 1400004.60
4.80
5.00
5.20
5.40
5.60
5.80
satisfaction with life overall (1-7 scale)
Job security• Having a temporary contract incurs a life satisfaction penalty beyond
any impact resulting from the lower income (0.52 points biggest difference)
Permanent contract
Temporary contract (> 12
months)
Temporary contract (< 12
months)
Temporary contract (agency)
No contract
-.50
-.40
-.30
-.20
-.10
.00
.10
Diffe
renc
e fr
om m
ean
life
satis
-fa
ction
European Quality of Life Survey, 2011
Job security• How likely do you think it is that you might lose your job in the next 6
months? (13% in UK say it is likely or very likely – higher than many
countries)
European Quality of Life Survey, 2011
Very likely Likely Neither likely nor unlikely
Unlikely Very unlikely
-0.25
-0.2
-0.15
-0.1
-0.05
0
0.05
0.1
0.15
0.2
0.25
Diffe
renc
e fr
om m
ean
life
sat-
isfac
tion
Working hours
15 20 25 30 35 40 45 50 55 60
-.15
-.10
-.05
.00
.05
.10
.15
.20
Working hours
Diff
eren
ce fr
om m
ean
life
satis
fact
ion
• Negative effect affects over a quarter of working adults in sample• Significant effect even when excluding top income quartile
European Quality of Life Survey, 2011
Work-life balance
European Quality of Life Survey, 2011
• Work/life balance is strongest predictor of stress, fifth strongest predictor of life satisfaction and third strongest predictor of overall well-being
Unemployment
disability/illness
unemployed 12 months or more
unemployed < 12 months
homemaker
employed
student
retired
.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0
Mean life satisfaction, UK
European Quality of Life Survey, 2011
What are the objectives of labour market policy?
Well-being
Employment rate
Job security
Working hours
Income
Labour market policy
Productivity
Potential applications
• Minimum wage• Labour market flexibility• Working time directive
Minimum wage
Well-being
Employment rate
Job security
Working hours
Income
Raising minimum wage
Productivity
4.0
5.0
6.0
7.0
8.0
9.0
Labour market flexibility
Well-being
Employment rate
Job security
Working hours
Income
Enhancing job security
Productivity
- 1%
+ 10%
- 1.2 per person
+0.4 per person
-0.25-0.2
-0.15-0.1
-0.050
0.050.1
0.150.2
0.25
Labour market flexibility
Worked example: Assuming everyone had life sat 7.0 before intervention
% affected WB before impact WB after
People who become unemployed 1% 7 -1.2 5.8
People who feel more secure 10% 7 0.4 7.4
Average well-being 7 7.03Increase in well-being 0.4%
Working time directive
Well-being
Employment rate
Job security
Working hours
Income
Implementing working time
directive
Productivity
15 20 25 30 35 40 45 50 55 60
-.15-.10-.05.00.05.10.15.20
4.05.06.07.08.09.0
Job quality
Well-beingJob qualityPromoting job quality
Productivity
Income
£££ ?
Questions
• What would a well-being approach to labour market policy look like, and what evidence is needed to underpin it?
• What are the implications for this approach for:– Low pay – e.g. the minimum wage– Job security – e.g. employment protections– Working hours – e.g. Working Time Directive– Job quality – e.g. promoting employee well-being