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Jobs and job quality between the eve of the Great Recession and the eve of COVID-19

IFS Working Paper W20/19

In 2019, the employment rate among 25- to 64-year-olds in the UK reached 80% – the highest on record, and considerably higher than the 76% rate recorded shortly before the Great Recession. In this paper, we investigate this growth across several dimensions. We analyse which sectors, demographic groups and regions accounted for the rise, and show the effect of certain policies and compositional changes on the employment rate. We also investigate how job ‘quality’ – in both financial and non-financial terms – has changed. We find that almost all demographic groups and regions saw a rise in employment, especially those with low pre-existing employment rates and those near the bottom of the income distribution. The growth in employment was entirely accounted for by a rise in jobs that can be done from home, making the workforce more resilient to the COVID-19 crisis – but the workforce also shifted towards those with childcare responsibilities, undoing some of that resilience. Hourly pay growth was very weak over the period, with the median actually slightly falling. Other indicators of job quality show a more mixed picture: employees seem to have greater attachment to their work and firm, but perceive less security and flexibility in their job. 

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This report examines how living standards – most commonly measured by households’ incomes – were changing in the UK up to approximately the eve of the current COVID-19 crisis, using the latest official household income data covering years up to 2018–19.
Press release
The coronavirus crisis hit after several years of poor income growth. Median household income did not grow at all between 2016−17 and 2018−19, and low-income households were no better off in 2018−19 than 5 years earlier.