Reconciling workless measures at the individual and household level. Theory and evidence from the United States, Britain, Germany, Spain and Australia

Abstract

Individual and household based aggregate measures of worklessness can, and do, offer conflicting signals about labour market performance. We outline a means of quantifying the extent of any disparity, (polarisation), in the signals stemming from individual and household-based measures of worklessness and apply this index to data from 5 countries over 25 years. Built around a comparison of the actual household workless rate with that which would occur if employment were randomly distributed over household occupants, we show that in all the countries we examine, there has been a growing disparity between the individual and household based workless measures. The polarisation count can be decomposed to identify which household groups are exposed to workless concentrations and can also be used to test which individual characteristics account for any excess worklessness among these household groups. We show that the incidence and magnitude of polarisation varies widely across countries, but that in all countries polarisation has increased. For each country most of the discrepancies between the individual and household workless counts stem from within-household factors, rather than from changing household composition.

On Why Gender Employment Equality in Britain Has Stalled Since the Early 1990s

“…A more recent literature has suggested that the economic nature of households, and especially the differences between them, has changed markedly in recent decades. Gregg et al (2010) document the conflicting trends between individual and household labour market outcomes for the United States, Britain, Germany, Spain and Australia. In these countries, individual worklessness rates have fallen over the past two decades, while household-based rates have not.…”

A Study into the Persistence of Living in a Jobless Household

“…In the past decade, household joblessness has been raised as a concern in a number of countries due to its association with a wide range of adverse outcomes. In particular, research shows strong links between household joblessness, that is, households where no member is working in the labour market, on the one hand, and poverty and welfare dependence on the other hand (Organisation for Economic Co‐operation & Development, ; Dickens & Ellwood, ; Nickell, ; Gregg et al ., ). Gregg et al .…”

“…For the United States, Britain, Germany, Spain and Australia, Gregg et al . () find that individual jobless rates have fallen over the 20 years to 2005 but household‐based jobless rates have not. The study also reveals a few patterns specific to Britain and Australia.…”

“…Gregg et al . () note that household joblessness is also an important factor in the intergenerational transmission of poverty and poor outcomes, given the widespread evidence that parental income and background can have significant effects on the future welfare of children.…”

Children and Dual Worklessness in Europe: A Comparison of Nine Countries

“…However, the cross-national variation can be remarkable, as will become evident later in the paper (Figure 3). Some results also suggest that joblessness accumulation may be stronger when children are present (Bingley and Walker 2001;Gregg, Scutella and Wadsworth 2004). Furthermore, dual joblessness tends to last longer in households with small children (Härkönen 2007).…”