B44: Some Labour Market
Statistics
John Van Reenen, 2004
1
Key facts: Structure
1.
2.
3.
4.
Jobs
Pay
Labour market institutions
Productivity
2
1. Jobs
•
•
•
•
•
Employment
Unemployment
Inactivity
Structure of jobs
Unemployment in different countries
3
UK Employment 1971-2002;
Employment about 28m in 2002;
hours more variable than employment
Source: Peter Doyle, ONS
“Consistent Historical time series of labour market data”
http://www.statistics.gov.uk/articles/labour_market_trends/Experimental_LFS_LMTSep03.pdf
4
Male employment rates falling; women’s employment rate rising
ER = employment/population of working age
Source: Peter Doyle, ONS
“Consistent Historical time series of labour market data”
http://www.statistics.gov.uk/cci/nscl.asp?id=6584
5
UK Claimant Unemployment rate over long-run, 1900-2000
UR=unemployment/labour force(LF); LF =unemployed+employed
Lindsay et al (2003) “A Century of Labour Market Change”,
Labour Market Trends March 2003
6
Unemployment rates 1971-2002; ILO vs. claimant count
ILO unemployed = those actively seeking work and available to start
7
UK Unemployment Rate 1971-2002, men
Source: Peter Doyle, ONS
“Consistent Historical time series of labour market data”
http://www.statistics.gov.uk/cci/nscl.asp?id=6584
8
UK Numbers Inactive, 1971-2002
Inactive are neither in employment nor seeking paid work;
(e.g. Students, housewives, long-term sick). Inactivity Rate =
1 – (Labour Force/Population of working age)
Source: Peter Doyle, ONS “Consistent Historical time series of labour market data”
9
Numbers and Structure of Employment, 1961-2001
•Public sector employment shrinking
•Manufacturing to services
•Growing proportion of high skilled in labour force
Source: Harwidge (2002), ONS “Jobs in the public and private
sector. http://www.statistics.gov.uk/cci/article.asp?id=130
10
International Comparisons
• Post WW2 OECD unemployment rates low
and then rose since 1974 (like UK)
• Factors associated with lower structural
unemployment: time limited/lower benefits;
co-ordinated or weak unions; ALMP.
• UK and US relatively high unemployment
until mid-1980s. Now lower than major EU
countries
11
Annex Table 15. S tandardised unemployment rates a
Per cent of civilian labour force
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
10.0
..
10.7
11.9
..
9.0
..
10.8
11.3
..
8.3
..
10.1
10.7
..
7.9
..
10.0
9.6
..
7.9
..
9.8
8.8
..
7.0
..
8.8
7.8
..
6.0
..
7.4
7.5
..
6.7
..
6.6
8.1
..
9.3
..
6.4
10.3
..
10.5
..
7.1
11.2
..
10.6
4.0
8.6
11.4
4.4
9.5
3.8
9.8
10.4
4.4
8.2
3.9
9.7
9.4
4.1
8.2
4.4
9.5
9.6
3.9
8.3
4.4
9.2
9.1
4.8
7.7
4.5
9.3
8.3
6.5
7.0
4.0
8.6
7.6
8.8
6.3
3.7
6.9
6.8
8.9
6.7
3.6
6.6
7.2
8.2
8.4
..
7.9
6.9
..
7.9
5.9
9.4
7.1
..
6.6
6.0
9.8
7.2
..
5.0
6.7
9.9
6.5
..
5.0
4.9
10.1
6.3
..
5.7
4.2
9.6
6.2
..
6.8
3.1
9.1
5.6
..
7.2
3.2
8.6
4.8
..
7.9
6.6
9.1
4.2
..
8.6
11.6
10.0
6.4
9.9
9.6
16.4
11.3
7.7
12.1
7.7
16.8
11.8
8.2
11.0
6.8
15.2
11.4
8.0
10.4
6.3
14.6
11.9
8.7
10.1
5.3
12.6
11.8
9.7
8.9
4.9
11.4
11.4
9.1
7.9
4.8
10.2
10.7
8.4
7.1
4.4
9.7
9.3
7.7
6.5
4.3
9.1
8.5
7.7
5.8
13.9
7.4
2.7
3.4
9.2
15.5
7.9
2.7
3.0
8.9
16.8
8.1
2.6
2.9
7.9
16.8
8.9
2.8
2.5
7.8
16.6
9.6
2.8
2.5
7.7
16.2
9.7
2.5
2.0
7.2
14.7
9.7
2.3
1.8
6.6
13.4
8.9
2.1
1.6
5.9
14.7
8.5
2.1
1.6
5.5
15.4
8.7
2.2
2.1
5.3
15.6
10.1
2.5
2.6
6.2
14.3
11.0
2.9
3.2
6.8
12.3
11.5
3.1
2.9
6.6
11.7
11.5
3.4
2.9
6.0
9.9
11.6
3.4
2.7
4.9
7.5
11.7
4.1
2.7
3.8
5.6
11.3
4.7
2.4
3.2
4.3
10.4
4.7
2.3
2.9
3.9
9.4
5.0
2.0
2.5
New Zealand
Norway
Poland
Portugal
Slovak Republic
5.7
3.5
..
8.2
..
5.7
3.2
..
8.9
..
4.2
2.6
..
9.2
..
4.0
2.0
..
8.8
..
4.1
2.1
..
7.2
..
5.6
3.3
..
5.8
..
7.1
5.4
..
5.2
..
7.8
5.7
..
4.8
..
10.3
6.0
..
4.2
..
10.3
6.5
..
4.3
..
9.5
6.5
14.0
5.6
..
8.1
5.9
14.4
6.9
13.6
6.3
5.4
13.3
7.3
13.1
6.1
4.8
12.3
7.3
11.3
6.6
4.0
11.2
6.8
11.9
7.5
3.2
10.6
5.2
12.6
6.8
3.2
..
4.5
16.4
6.0
3.4
16.1
4.1
18.8
5.3
3.6
18.2
4.1
19.3
Spain
Sweden
Switzerland
United Kingdom
United States
14.1
3.7
..
10.8
9.6
16.5
3.3
..
10.9
7.5
17.7
2.9
..
11.2
7.2
17.4
2.7
..
11.2
7.0
16.7
2.2
..
10.3
6.2
15.8
1.8
..
8.5
5.5
13.9
1.5
..
7.1
5.3
13.1 13.2
3.1
1.7
1.9
..
8.6
6.9
6.8
| 5.6
14.9
5.6
2.9
9.7
7.5
18.6
9.1
3.8
9.9
6.9
19.8 18.8
8.8
9.4
3.3
3.7
8.5
9.2
5.6
| 6.1
18.1
9.6
3.8
8.0
5.4
17.0
9.9
4.0
6.9
4.9
15.2
8.3
3.4
6.2
4.5
12.8
7.1
2.9
5.9
4.2
11.3
5.8
2.5
5.4
4.0
10.6
4.9
..
5.0
4.8
Euro area
European Union
..
..
..
..
..
..
..
..
..
..
..
..
..
..
..
..
7.9
7.9
8.6
8.8
10.2
10.1
10.8
10.5
10.6
10.1
10.8
10.2
10.8
10.0
10.2
9.4
9.4
8.7
8.5
7.8
8.0
7.4
T otal OECD
..
..
..
..
..
..
..
..
..
..
..
7.7
7.3
7.2
7.0
6.9
6.7
6.3
6.5
Australia
Austria
Belgium
Canada
Czech Republic
Denmark
Finland
France
Germanyb
Hungary
Ireland
Italy
Japan
Luxembourg
Netherlands
Source: OECD Economic Outlook, 2003
12
2. Pay
• Average Nominal pay – tracks RPI
• Average real earnings – rises with aggregate
real productivity over the long-run
• Pay structure – “dwarfs and giants”
• Individual and workplace characteristics
• Inequality – big rises in UK post 1979
• US also large increase – smaller in other EU
countries
13
Growth Rate of average nominal earnings in UK, 1941-2000
14
Pay structure
• Individual characteristics – human capital,
gender, race, marital status
• Workplace characteristics- union
recognition, public-private sector, firm size,
industry
• Explain about 40% of pay dispersion
15
Changes in inequality in UK
•
•
•
•
•
Stability for most of C20
Compression in 1970s
Rapid widening in 1980s
Slight widening in 1990s
Male manual: inequality at an all time post
1986 high
16
Increase in UK male wage inequality, 1966-1996
Source: Gosling, Machin and Meghir (1999)
17
Job upgrading: demand for skills?
• Employment share of men (women) with degree
or more in 1975 = 5.8% (2.2%)
• ………………..in 1998 = 16.3% (12.5%)
• Wage premium for men(women) with degree or
more (relative to no qualifications) in 1975 =
54.2%(70.2%)
• ……………....in 1998 = 71.7%(79.4%)
• Source: Machin (2003), State of Working Britain
• Still a lot of increase in inequality “within groups”
18
3. Labour Market Institutions
• Unions/collective bargaining – coverage,
centralisation, power
• Minimum wages
• Inside the firm – growth of contingent pay
• Anti-discrimination legislation (e.g. Equal
Pay Act)
• Incomes policies/corporatism
19
Institutions - Unions
• 7.3m employees in trade unions (29% density =
TU members/labour force)
• 8.7m employees covered by a collective
agreement (36%)
• “Free riders” (covered but not members about
14%)
• And “losers” (members but not covered – about
7%)
• Autumn 2002, LFS
20
UK Union density over the long-run, 1900-2000
Lindsay et al (2003) “A Century of Labour Market Change”,
21
Labour Market Trends March 2003
Recent Decline in union Density, 1991-2001
Keith Brook
Labour Market Trends (2002) “Trade Union Membership”
22
Union decline: Breakdown by type of work
23
Industrial Disputes
Lindsay et al (2003) “A Century of Labour Market Change”,
24
Labour Market Trends March 2003
Other changes/factors in UK
bargaining
• Decentralisation to the firm level of
bargaining (i.e. not national or industry)
• Decline of multi-unionism
• Decline in bargaining over non-pay issues
• See WERS series for details
25
International Comparisons of unions
• Big variation in union coverage and density
across countries (see Visser, 2003)
• Density has tended to decline over time in
most countries (but coverage remains strong
in EU: about 73%)
• Variation in effects of unions across
countries (See Addison and Schnabel, 2003,
HTU)
26
Differential Rates of coverage and density in different countries
Source: Visser (2003)
27
Falling Rates of unionisation across countries
Country
Austria
Finland
France
Belgium
Sweden
Netherlands
Italy
Spain
Germany (West)
Germany
Portugal
Norway
Denmark
Switzerland
United Kingdom
Table 11.9 Union density, bargaining coverage and union centralization
Period
Union Density Rates
Bargaining coverage rate
(85-99)
52
38
99
(85-98)
69
76
95
(85-98)
14
10
87
(85-95)
51
53
90
(85-98)
82
86
86
(85-99)
29
24
80
(85-98)
43
38
85
(85-97)
9
16
70
(85)
34
78
(98)
26
(86-95)
51
25
70
(85-97)
58
56
70
(85-99)
78
75
74
(85-99)
29
22
53
(85-97)
46
31
64
EU(15)
(85-97)
37
29
Czech Republic
Hungary
Turkey
(90-95)
(85-98)
(87-99)
79
74
28
43
33
32
Australia
Canada
New Zealand
United States
Japan
South Korea
(85-96)
(85-98)
(85-99)
(85-00)
(85-00)
(85-99)
50
38
53
17
29
12
35
34
21
13
22
12
Singapore
Philippines
(85-98)
(85-96)
21
24
17
30
78
99
95
95
90
89
85
82
78
73
71
70
69
37
36
73
55
51
25
85
39
51
21
23
80
34
21
15
20
14
19
4
28
Other institutions
• Minimum Wages/Wages Councils (last 2 lectures).
Wages Councils abolished in 1994 and NMW
introduced in 1999
• Growth of contingent pay – share options, profit
related pay, bonuses, etc. Subject of 2nd half of
lectures on compensation policy
• Anti-discrimination (gender, race, disabilities,
age..)
• Employment protection – much coming from EU
(e.g. agency workers)
29
4. Productivity
• Fundamental cause of increasing prosperity
– tracks wages in the long-run
30
What is productivity?
GDP
GDP
hours
workers

x
x
Population hours workers population
Labour
productivity
Voluntary and involuntary.
labour supply, unemployment, etc.
*US has higher GDP/pop than EU, but more similar GDP/hours
This has changed a lot over time via catch up
31
4. Productivity-cont
• Growth in GDP per hour depends on accumulation of
capital (physical and human) and technological change
• UK Productivity growth (output per hour) c. 2-2.5% p.a.
• UK productivity lower than US, France, Germany
• Within OECD “convergence” to US levels over long-run
• OECD slowdown in productivity growth post 1974
• Reversal since mid 1990s in US (from 1.5% to 2.5% p.a.)
but not in EU, UK or Japan. Industrial relations related?
32
UK Productivity Gap, 1999
(UK=100)
140
120
100
output per hour
(market sector)
80
60
TFP (capital and
skills adjusted,
market sector)
40
20
0
France
Germany
US
Source: O’Mahony and de Boer (2002)
33
The long run: Catching up with the frontier
Source: Gordon, 2002.
34
US Productivity “Miracle”?
Source: Stiroh (2002), AER
35
Annex Table 13. Labour productivity in the business sector
Percentage change from previous period
Ave ra ge
a
1975-85
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
Es tim a te s a nd pro je c tio ns
2002
2003
2004
Australia
Austria
Belgium
Canada
Czech Republic
1.9
2.7
2.9
1.0
..
-2.6
2.0
1.5
-0.9
..
3.2
1.9
2.0
1.6
..
0.8
3.3
3.4
2.0
..
-0.4
3.5
2.3
0.5
..
-0.1
3.6
2.2
-0.4
..
1.5
2.2
1.3
-0.2
..
3.6
2.5
1.6
2.1
..
4.0
1.2
-0.2
1.8
..
1.5
3.2
3.7
3.1
1.5
-0.2
2.0
1.7
0.8
5.4
3.0
3.0
0.4
0.7
4.4
2.9
1.9
3.3
1.8
-0.5
4.2
3.2
0.5
1.5
0.4
2.1
1.8
2.2
2.9
3.0
0.2
2.9
1.9
2.1
4.4
1.8
0.7
-1.0
0.4
2.8
2.2
1.5
1.3
1.8
2.3
2.3
2.0
1.5
1.3
3.6
2.3
2.1
2.1
2.0
3.9
Denmark
Finland
France
Germany
Greece
2.3
2.9
2.7
2.0
1.1
0.1
3.6
2.3
0.6
0.2
0.7
4.6
2.7
0.2
-2.4
-0.5
4.6
3.6
2.6
2.9
2.0
5.1
3.2
2.3
3.9
0.5
0.6
2.0
0.9
-1.5
2.1
-0.3
1.3
2.4
6.4
1.3
5.5
2.8
4.3
-0.9
3.2
6.6
0.7
0.2
-2.7
7.7
6.5
1.9
2.7
0.1
0.5
2.6
0.8
1.5
1.2
1.8
3.0
0.8
1.1
3.1
1.7
3.4
1.3
1.6
4.8
2.8
3.2
1.9
0.8
-0.9
1.6
1.2
1.1
0.8
4.0
3.3
4.3
1.7
1.0
4.9
0.7
-0.5
0.2
0.0
4.9
1.6
2.3
1.5
0.8
3.7
2.1
2.6
2.1
1.7
3.3
2.6
2.2
2.0
1.6
3.1
Hungary
Iceland
Ireland
Italy
Japan
..
2.3
3.8
2.4
2.8
..
3.6
0.1
1.9
2.1
..
3.1
4.8
2.9
3.7
..
3.8
6.5
3.3
5.0
..
2.3
6.9
3.0
3.5
..
1.4
4.4
1.1
3.8
..
-9.9
2.5
0.7
1.3
..
-3.8
3.3
1.6
-0.2
..
0.9
1.3
2.5
0.2
..
3.9
2.7
3.8
0.9
3.7
-3.3
5.4
3.3
1.4
1.4
6.1
4.0
0.8
3.0
4.3
4.6
7.6
1.7
0.8
2.8
1.3
-1.8
0.7
-0.7
0.3
0.1
4.7
0.8
1.2
4.4
3.9
6.9
1.2
2.9
3.6
2.1
3.2
0.1
0.0
4.4
-0.1
3.1
-1.2
0.5
4.1
0.9
2.6
1.0
1.1
4.1
2.3
2.9
1.7
1.1
Korea
Luxembourg
Mexico
Netherlands
New Zealand
5.7
..
..
2.2
0.7
8.8
..
..
0.6
2.0
6.4
..
..
-0.5
0.1
8.8
..
..
0.9
3.4
2.4
..
1.3
2.9
4.2
5.2
..
2.3
1.8
-1.4
6.4
5.0
1.5
0.8
-0.9
3.8
-0.9
-0.3
0.8
-0.2
4.2
2.7
-2.0
0.7
2.9
5.5
1.4
1.2
3.9
1.1
6.5
-1.5
-6.5
0.9
-1.5
5.1
1.0
0.9
0.4
0.2
3.9
5.0
0.5
0.5
1.5
-1.5
3.5
1.5
1.5
0.4
10.2
0.8
2.6
1.9
2.7
5.6
3.5
7.6
1.5
2.4
1.6
-4.8
-0.8
-0.7
-0.1
3.5
-2.4
-0.1
-0.3
1.0
4.3
0.4
0.8
1.8
2.5
4.2
1.7
1.3
2.2
2.8
Norway
Poland
Portugal
Spain
2.1
..
2.2
3.3
-1.3
..
4.6
1.2
-0.5
..
4.2
0.8
-0.6
..
5.5
1.7
1.5
..
4.8
1.4
2.6
..
2.3
0.0
3.5
..
-0.5
1.7
3.1
..
1.4
2.8
5.6
..
-3.2
2.3
2.6
8.8
2.6
3.3
0.2
7.1
6.1
1.0
0.0
5.5
3.6
1.5
1.0
6.1
2.4
0.9
1.9
4.0
2.4
0.3
0.9
9.3
2.2
0.6
1.7
6.4
2.1
0.9
1.5
3.8
0.1
0.4
1.4
4.8
-0.4
0.6
1.3
4.0
1.0
1.0
2.0
2.6
1.1
1.0
Sweden
Switzerland
United Kingdom
United States
1.5
0.9
2.5
1.2
2.5
-0.9
5.1
1.7
2.7
-1.7
1.0
0.7
1.4
0.7
0.1
1.1
1.4
2.6
-1.0
1.2
0.1
-1.9
0.3
0.6
0.5
-3.6
1.5
0.4
3.5
1.0
2.8
3.7
6.3
0.1
2.2
0.9
5.6
2.3
3.2
1.3
2.2
0.1
1.0
0.4
1.7
-0.2
0.8
1.8
3.5
2.4
0.7
2.2
2.6
1.4
1.6
2.2
2.5
0.6
0.5
2.4
0.6
2.2
1.9
2.1
-0.9
-0.9
1.4
0.2
2.3
0.4
0.9
3.8
2.8
1.5
2.1
1.7
2.8
1.6
2.0
1.7
Euro area
European Union
2.5
2.4
1.6
2.0
1.6
1.5
3.0
2.4
2.9
2.2
1.8
1.1
..
1.6
2.8
2.7
1.0
1.3
3.1
3.1
1.7
1.7
1.0
1.1
1.7
1.6
0.9
1.2
0.7
1.1
1.3
1.6
-0.1
0.4
0.4
0.7
1.5
1.7
1.7
1.8
T otal OECD
Memorandum item
OECD less high inflation
countriesbc
2.0
1.9
1.8
2.4
1.8
1.4
1.1
2.6
1.3
1.9
1.1
1.9
1.9
1.3
1.9
2.6
0.2
2.0
1.7
1.8
2.0
1.9
1.7
2.4
1.9
1.3
1.1
2.7
1.2
2.1
1.2
1.8
1.8
1.3
2.0
2.1
0.3
2.0
1.7
1.8
c
36
Appendix: Union
membership/coverage details
• Union membership by individual and
workplace characteristic
37
Union membership by characteristics
38
Union membership by characteristics –cont.
39
Union membership by characteristics-cont.
40
Union membership by occupation
41
Union Membership by Industry
42
Union coverage
43
Union coverage – cont.
44