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British Women’s Human Capital and Employment Evolution under New Labour  

Catherine Coron
p. 159-172

Résumé

This paper aims at identifying the evolution of British women’s human capital, as well as the employment perspectives within the theoretical framework of socio-economic models and the case study of the New Deal.
The central question will be to define the characteristics and the goals of British governmental employment and training policy over this period as well as analyze some of its major components. The second step will consist in measuring governmental strategies’ impact and influence, if any, on the evolution and development of British women’s human capital as opposed to men’s situation. The last section will enable us to identify the main features of British social and economic model in terms of workfare and labour market as posited by Esping-Andersen in 1990. These characteristics will be examined for their empirical value for the study of the British labour market. Workfare and training governmental strategies, as well as the way they were applied in the United Kingdom, the British social legislation, the Welfare programmes ruling the labour market, and the workers’ level of employability and adaptability will be scrutinized. This will provide grounds for determining whether British labour market policies under New Labour may be considered as specific “gendered” employment policies.

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Introduction

1Human capital, as defined by the 1992 Nobel Prize for economics winner, Gary Becker, (University of Chicago), consists in:

Education, training, medical care, [...] are called human capital because people cannot be separated from their knowledge, skills, health, or values in the way they can be separated from their financial and physical assets. Education, training, and health are the most important investments in human capital. Many studies have shown that high school and college education in the United States greatly raise a person’s income, even after netting out direct and indirect costs of schooling, and even after adjusting for the fact that people with more education tend to have higher IQs and better-educated, richer parents. (Becker)

2One way to measure the positive impact of human capital investment under the form of education and training over a given period is to study the evolution of the unemployment rate as well as the training level of the labour force. Training levels are supposed to increase and if at the same time unemployment decreases, human capital investment can be said to have achieved its goal to some extent. This paper aims at answering the following question: what were the characteristics and the impact in terms of female human capital of New Labour’s governmental New Deal workfare programme on women’s unemployment and training levels in the United Kingdom from 1997 to 2010.

3First, we will try to identify the criteria showing that the British economic and social model meets the characteristics identified by Esping-Andersen as typical of a “liberal” model. Then we will analyse the evolution of British women’s human capital over the period, as well as their employment perspectives within the theoretical frame of socio-economic models. We will finally try to see if women were more vulnerable to unemployment than men and whether they tended to be the main target of the New Deal workfare programme in the United Kingdom. Can the New Deal be called a “gendered policy” type of unemployment programme and may it stand as a practical example of the British social model of capitalism designed by New Labour in 1997 and implemented until 2010 when it was then replaced by the Flexible New Deal (FND) addressing all the different types of long-term unemployed without any gender differences?

A "liberal" economic and social model?

4 Can we consider the British economic and social model as “liberal”? The answer to this question largely depends on the period of time considered, as well as the economic market where a given governmental policy is implemented. In this paper, we will focus on the labour market and consider it is embedded in and determined by a wider linguistic, ideological and cultural context: the Anglo-American model.

5 In 1990, Gosta Esping-Andersen divided welfare states into three different types, “liberal”, “conservative”, and “social democratic”. This typology relied on three notions. First came “de-commodification” which was the extent to which a government reduces citizens’ reliance to the market by making eligibility for welfare more or less restrictive and by setting welfare revenues at a level more or less comparable to that of an active worker. Then, the “social stratification” wasthe degree to which government attempted at correcting social inequalities. Finally, the “private-public mix” measured the relative roles of the state, the family and the market in welfare provision. A fourth principle, the “de-familisation” which was the degree to which individual adults could uphold a socially acceptable standard of living, independently of family relationships, either through paid work or through social security provisions, was added to the analysis in 1999 (Esping-Andersen 1990, 1999). According to these principles, in the Liberal type of welfare regime, the State favours the market - actively or passively. It is market-oriented in the sense that state guarantees are kept to a minimum and competition is encouraged which promotes individualism as opposed to the corporatist and Social-Democratic welfare states promoting the family. Dutch economist Pieter Moerland distinguished between a “market oriented”, or Anglo-Saxon, and a “network oriented” type of capitalism, dividing the latter into three subtypes which he termed “Germanic”, “Latinic” and “Asiatic” (Moerland). Can the New Deal be characterized as market-oriented in the sense that it kept government intervention on the labour market to its lowest level? Did it promote competition and individualism rather than policies favouring the family.

The New Deal: an archetype of the Liberal workfare

6In the United Kingdom, the nineteen eighties were characterised by a dramatic growth of unemployment in industries employing low-skilled workers. The lack of skilled labour force was assessed and denounced by both employers and the government at that time. This is the reason why the 1997 Labour government made it its first and foremost economic policy. Unemployment was even more dramatic for young workers and has been a structural weakness in the United Kingdom since the nineteen nineties (Table 1).

Table 1. Young workers compared to total unemployment rate (1990-2010)

In %

1990

1994

2000

2003

2006

2008

2009

2010

Unemployment rate of under 25

10.1

16.1

11.8

11.5

14.4

14.1

18.9

19.1

Male

19.2

16

21.7

21.2

Female

12.6

12

15.6

16.8

Total unemployment rate

6.9

9.7

5.4

5.0

5.4

5.6

7.8

7.9

Male

11.5

5.8

5.8

8.9

8.8

Female

7.4

5

4.8

6.5

6.9

Source: Author’s own presentation from OECDEmployment Outlook, 2004: 293, 299; 2009: 251, 257; 2011: 239- 241, 247, 250. http://www.oecd.org/​document/​53/​0,3746,en_2649_39023495_42788213_1_1_1_1,00.html,ONS website, http://www.statistics.gov.uk/​

7Table 1 shows that the recessions of the early 1990s and 2008-9 resulted in a smaller increase in unemployment rates for women than for men and that women’s unemployment rate has remained below that of men from 1994 to 2010. We may also measure the importance of economic constraints on governmental policy in the United Kingdom. A higher youth unemployment level led the Labour government to choose the young unemployed instead of mostly women lone parents as their target population for the first New Deal programme.

8In 1998, the Labour government launched the New Deal programme within the framework of the Welfare to Work. It was originally part of a set of governmental policies addressing long-tem unemployment only. Both were inspired by their American predecessors.  In their political discourse about their New Deal programme, Labour insisted a lot on its innovative aspect. However, many elements were not new. The term continuity is more appropriate to define the New Deal, following on from Margaret Thatcher's and John Major’s policies. What was really innovative was the extent of the programme and the fact that it focussed more particularly on improving the level of skills and thus people’s employability and human capital.

9The New Deal insisted on “active” training policies which had a constraining aspect for the recipients, as sanctions might apply if they refused to join the compulsory training activities. A workfare policy is said to be “active” when the unemployed are strongly supervised in their job quest and must enter after a fixed period of time an “active” stage of employability whether it be thanks to a training course or a subsidized job. Any refusal on the part of the recipients might entail a suspension of their rights. New Deal penalties went as far as to mention the cutting of recipients’ unemployment benefits. These compulsory training programmes were presented by the government as a means to force some individuals, engaged in a “de-socialising” process, to enter a phase of social rehabilitation. However the compulsory nature of the programme stopped many recipients from asking for unemployment benefits (Coron, Pavelchievici). Hence they could not apply for financial support anymore. Therefore, these measures reinforced the liberal aspect of the British workfare system.

10The social stratification degree corresponds to the redistributive aspect of Welfare policy and the degree to which New Labour government attempted at correcting social inequalities. Table 2 clearly shows that, contrary to what was announced in the media in 1997, the Labour government carried on with the Conservative policy, progressively diminishing the share of spending devoted to training in GDP terms. Training programmes were increasingly privately funded even if the organization of the system was run by the government. The impact was an increase in social inequalities which affected the category of workers who were at a “high risk of exclusion from the labour market” as defined by the OECD.

11The Labour government therefore developed and extended the workfare policy initiated by the Conservatives while intensifying State monitoring as well as reducing public expenditure.

Table 2. The evolution of public expenditure allocated to training in the United Kingdom as a % of GDP from 1995 to 2010

Type of programme

Public Expenditure as a % of GDP

1995-96

1997-98

1998-99

2001-02

2009-10

Labour market training

0.10

0.07

0.05

0.03

0.02

Training for unemployed

adults and those at risk

0.09

0.06

0.04

0.02

-

Training for employed adults

0.01

0.01

0.01

0.01

-

Youth measures

0.12

0.12

0.13

0.12

-

Measures for unemployed and disadvantaged youth

-

0.01

0.02

0.03

-

b) Support of apprenticeship and related forms of general youth training

0.12

0.12

0.11

0.09

-

Total of public expenditure allocated to the labour market

1.72

1.18

0.98

0.76

-

Source: Author’s own computation from OECDEmployment Outlook, 2001: 259; 2004: 357; 2011: 273.

12The New Deal for Lone Parents (NDLP) came six months after the New Deal for Young People (NDYP) in June 1998.  Is it possible to consider the NDLP programme as a gendered type of unemployment policy? Table 3 clearly shows that this programme was predominantly aimed at women.

Table 3. Income Support Lone Parents Claimants: February 2011 (Thousands)

Total

Female

Male

All ages

614

596

18

Under 18

5

5

0

18-24

173

171

2

25-34

259

253

6

35-44

143

136

7

45-54

31

28

3

55-64

2

2

0

Source: Department for Work and Pensions, ONS statistical release17th August 2011.

  • 1 European Union Statistics on Income and Life Conditions.

13In 2005, according to a European survey1, the United Kingdom had the highest number of single parent families, at 23% of all families. In January 2012, “just over a quarter (26 per cent) of households with dependent children were single parent families, and there were 2 million single parents in Britain today. This figure had remained consistent since the mid-1990’s” (ONS 2012).

14 To explain the Labour choice of lone parents as the first target of the New Deal programmes, it must be pointed out that “in 1997, the situation was particularly dramatic as 55% of lone parent families in the United Kingdom were below the poverty line, with only 45.3% of them actually at work” (Delautre: 167). Previous Conservative governmental policies had concentrated mostly on strengthening the male bread-winner position. What was new in the Labour approach was that the NDLP aimed at enabling women to be financially independent by giving them access to a job.

15The main target announced by the New Labour government in 1997 was to eradicate child poverty by 2020, and so increasing lone parents’ employability became one of the means intended to reach this goal. Hence, in a 1999 speech honoring welfare state architect William Beveridge, Prime Minister Blair declared, “our historic aim will be for ours to be the first generation to end child poverty forever, and it will take a generation. It is a twenty- year mission, but I believe it can be done."(Blair) In 2003, the Labour government adopted a long-term measure of child poverty comprising three components:

  • low income measured in absolute terms

  • low income measured relative to 60 percent of median income

  • a combined measure of material deprivation and low income (DWP, 2003).

16 In 2005, among the four broad goals of the Labour government’s strategy against child poverty “work for those who can” and helping parents participate in the labour market became a priority (HMSO). The 1998 National Childcare Strategy “to make work pay” was supported by three pillars: tax credits, a new policy of child care (Finding) and the New Deal programmes.

17 If we analyse a 2001 survey of the characteristics of Lone Parents on income support we find the following two features.  They are mostly women (94 per cent), mostly aged 25 to 39 (61 per cent), mostly white (85 per cent), they have one (43 per cent) or two (34 per cent) children, about half have children under school age (47 per cent) and most live in social rented housing (66 per cent). Just over half (51 per cent) have neither academic nor technical qualifications and most (60 per cent) do not have a driving licence (Lessof et al.).Judging from these elements, we may conclude that the NDLP can be considered as a gendered type of governmental policy as it was mostly addressed to women, half of whom were also unskilled.

  • 2  Whereas the Temporary Assistance for Needy Families (TANF) implemented in the US should be conside (...)

18Finally, the NDLP may be considered as a hybrid type of activated labour market programme. Even if it was voluntary2, there was a compulsory annual Work Focused Interview (WFI) which tended to bring it into the activated type. It can be identified as a liberal type of welfare regime where the State actively favoured the market. It was market-oriented in the sense that social security from the State was kept to a minimum and competition was encouraged which promoted individualism rather than solidarity from the family.

Evolution of British Women’s Human Capital and unemployment rate from 1996 to 2011

  • 3 “in 1980/1, around one in four young people (24 percent of males and 26 percent of females) gained (...)

19What was the impact of the New Deal on women’s unemployment rate and human capital? First, it is worth noticing that women became more and more skilled over the period, and more particularly between 1980 and 1997 (Table 4). The percentage of women with at least 3 A-levels went from 8 to 15 %, whereas the proportion of men went from 10 to 14%. The improvement in human capital investment was even greater among women at GCSE level (Furlong; Finding 2013)3.

Table 4. Male / Female Educational levels 1980-2008

%

1980/81

1993/94

2000/01

2008/09

Boys with 3 A- levels or more

10

14

Girls with 3 A-levels or more

8

15

Boys with 5 GCSEs or more

24

39

45.7

64.5

Girls with 5 GCSEs or more

26

48

56.5

73.2

       Source: ONS, Social Trends 41, 2011, Central Statistical Office, 1996; Furlong. Unfortunately, the data for A-Levels were not made available under the Labour government in comparable forms.

20Women’s participation in higher education kept on rising from 1990 to 2008, which is a sign of higher investment in female human capital in the United Kingdom over the period (Table 5). We may also conclude that the gap in human capital levels widened at the expense of female lone parents, making it even more difficult for them to find a job on the labour market.

Table 5. Students in higher education:1 by type of course and sex

United Kingdom

Men

Women

Thousands

Academic year beginning

1980

1990

2000

2008

1980

1990

2000

2008

Higher education

    Undergraduate

      Full-time

277

345

510

593

196

319

602

735

      Part-time

176

148

224

262

71

106

320

424

    Postgraduate

      Full-time

41

50

82

137

21

34

81

132

      Part-time

32

46

118

114

13

33

123

160

All higher education

526

588

934

1 106

301

491

1 126

1 451

The impact of the recession

21Bearing in mind the potential positive impact of this unequal training level, was British women’s employment rate more affected than their male’s counterparts by the recession? Figures for activity and unmployment rates by educational attainment levels show that unskilled women were more affected than skilled female workers but less than their unskilled male counterparts (Table 6).

Table 6. Employment/population ratios, activity and unemployment rates by educational attainment in 2009

Table 6. Employment/population ratios, activity and unemployment rates by educational attainment in 2009

Source: OECD Employment Outlook 2011, p. 252.

22They also show that the gap between men and women’s employment and labour force participation was much wider among the unskilled than skilled workers. Recent studies by the Centre for Economic Performance at the London School of Economics have shown that the British labour market is generally characterized by a lower female unemployment rate (Dickens et al.). This may also, to a certain extent, bear out the aim of workfare policies in improving the impact of human capital for women.

23There has also been an increase in the number of households in the UK where no adult has ever worked in recent years: “no adult had ever worked in 1.0 per cent of households in 1997 and this had risen to 1.7 per cent in 2010.” (ONS, 2011: 1-2).  Women’s inactivity rate was largely due to the fact that they were the ones responsible for looking for the family (Table 7). For instance, in 2011, 35.4% were giving “looking after family/home” as the main reason for economic inactivity while only 5.7% of men were registered as doing the same. The same year the main reasons explaining men’s economic inactivity long-term sickness (33.3%) and studies (33.3 %) with a total of 70.1% declaring they did not want a job. As for women, looking for a family or home came first with 35.4%, followed by studies (19.2%), retirement (18.2%) and sickness (17.2%). The main reason for this gender gap being the fact that long-term sickness was socially better accepted, allocations were higher and less “activated”.

24The percentage of women who said they did not want a job was higher, reaching 77.1%. Strangely enough, inactive women tended to be less sick and discouraged than men over the whole period. Women who do not work usually look after their children – which appears in the table as they tend to be “looking after their family or home”- and, particularly for single mothers, can be considered as fully active and tend not to be discouraged or sick.

Table 7. Reasons for economic inactivity: by sex

United Kingdom        Percentages

1994

1999

2004

2009

2010

2011

Men

Students

Looking after family/home

Temporary sick

Long-term sick

Discouraged

Retired

Other

Does not want a job

Wants a job

27.7

4.7

3.8

39.9

3.4

11.1

9.4

68.2

31.8

25.0

6.0

2.9

42.8

1.6

12.1

9.5

67.9

32.1

28.0

6.1

3.1

37.7

0.7

12.9

11.4

71.0

29.0

32.9

6.2

2.5

34.6

1.0

13.2

9.5

72.1

27.9

34.4

6.3

2.6

32.5

1.2

13.3

9.6

69.8

30.2

33.3

5.7

2.2

33.5

1.5

13.5

10.2

70.1

29.9

Women

Students

Looking after family/home

Temporary sick

Long-term sick

Discouraged

Retired

Other

Does not want a job

Wants a job

11.9

48.1

1.9

14.6

1.4

13.4

8.7

75.3

24.5

12.5

40.8

1.9

19.3

0.7

15.8

9.0

75.7

24.3

14.1

38.7

1.7

19.1

0.3

16.7

9.4

78.7

21.3

17.7

35.9

1.6

17.8

0.5

18.5

8.0

78.5

21.5

18.8

35.6

1.5

17.9

0.5

18.1

7.7

77.2

22.8

19.2

35.4

1.5

17.2

0.5

18.3

7.8

77.1

22.9

Data are Q1 and seasonally adjusted

Source: Labour Force Survey, Office for National Statistics.

25In 2008 the proportion of women in part-time work was still much higher than that of men. This phenomenon tends to show that in spite of the fact that they tend to be more educated and skilled, 40 per cent of women worked part-time as compared to around 11 per cent of working men (ONS 2008). Whether the choice of part-time work was voluntary or not is an essential point to clarify and determine whether family represents a choice and a real value for the British woman or if she is still striving to get equal access to full-time work and may have to compromise due to the high cost of child care. In 2010, an “involuntary” part-time worker was defined as someone unable to find a full-time job (OECD). Yet, specific research into involuntary part-timing remains limited to a few historical investigations across developed countries. According to a study from the University of Cardiff,

there is a lack of systematic research in the UK.  A comparative study among the EU countries at the turn of the last century had shown that only a minority of part-timers in the UK (just above one-in-ten) were working in part-time jobs involuntarily, compared to circa 16% EU average. However, when the economic recession started to unfold a decade later, observers noted that Britain had begun to overtake countries like Denmark and France. By the final quarter of 2009, the proportion of involuntary workers among part-timers increased to roughly 15% (Cam).

26When we look at the figures, we conclude that the 2007-2008 crisis hit more female lone parents in terms of employment but had no apparent impact on the major causes of their inactivity.

Conclusion

27The New Deal for Lone Parents may be considered both as a voluntary and partly active gendered type of unemployment policy, and as such part and parcel of the liberal type of workfare witnessed in Britain. It addressed mainly women, half of whom were unskilled. The impact of the New Deal for Lone Parents was considered as moderate in 2008. The initial target of 70% employment in 2010 was not reached. In fact, only 57.2 per cent of single parents were in work, even though it has to be recognised that this was up 13 percentage points from 1997 (ONS, 2010). From 2008, the lack of impact of employment policies was mixed up with the consequences of the economic recession. Nevertheless, although by 2011, “Over the last 15 years there has been a narrowing of the gap in employment rates for women with and without dependent children: the gap in employment rates has narrowed” (ONS, 2011), it was noted that “youth who are neither in employment nor in education or training are a group at high risk of marginalisation and exclusion from the labour market, especially the longer they remain outside the world of work.” (OECD, 2011).The category of young female lone parents clearly matches this definition of a group with a “high risk of exclusion from the labour market”. The New Deal workfare programme did not manage to fully diminish these risks. The current lasting economic and social crisis may even increase them in a context of social austerity.

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Bibliographie

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Notes

1 European Union Statistics on Income and Life Conditions.

2  Whereas the Temporary Assistance for Needy Families (TANF) implemented in the US should be considered as an active labour market programme.

3 “in 1980/1, around one in four young people (24 percent of males and 26 percent of females) gained five or more GCSEs at grades A-C. By 1993/4 almost four in ten males (39 percent) and nearly five in ten females (48 per cent) gained five or more GCSEs. The proportion of young people gaining three or more A levels also increased: from 10 per cent of males and 8 per cent of females in 1980/1 to 14 per cent of males and 15 per cent of females in 1993/4.” (Furlong: 61-66)

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Table des illustrations

Titre Table 6. Employment/population ratios, activity and unemployment rates by educational attainment in 2009
Crédits Source: OECD Employment Outlook 2011, p. 252.
URL http://osb.revues.org/docannexe/image/1556/img-1.png
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Catherine Coron, « British Women’s Human Capital and Employment Evolution under New Labour   », Observatoire de la société britannique, 14 | 2013, 159-172.

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Catherine Coron, « British Women’s Human Capital and Employment Evolution under New Labour   », Observatoire de la société britannique [En ligne], 14 | 2013, mis en ligne le 01 février 2014, consulté le 26 avril 2017. URL : http://osb.revues.org/1556 ; DOI : 10.4000/osb.1556

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Auteur

Catherine Coron

Maître de conférences en civilisation britannique à l'Université de Panthéon-Assas Paris 2

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