Working paper 00/019 - Abstract

New Labour and the Labour Market

Richard Dickens*, Paul Gregg and Jonathan Wadsworth**

*Centre for Economic Performance, London School of Economics
**Centre for Economic Performance, London School of Economics and Royal Holloway College, University of London

The recent run of good macro-economic news masks mounting evidence that worklessness is increasingly concentrated on selected individuals, households, socio-economic groups and geographical areas. Simply focussing on the aggregate unemployment rate bypasses many of these issues. Likewise, concentration on average wages and wage growth obscures the highest level of wage inequality ever statistically observed. These micro aspects have been overlooked, or ignored, over the last 20 years, but, we believe, now form the most pressing labour market and social problems facing this administration. It is this legacy and the current governments' response that this paper is concerned with.

For brevity, in this paper, we focus on what we view as the governments selected priorities. They are the following areas of concern:

This paper looks in turn at the evidence for Britain on what lies behind each of these issues and at the current state of policy to reduce their scale or intensity. The paper documents the mounting evidence that many of these problems leave lasting scars on peoples' lives. Successful intervention could thus change the people's future life-course trajectories. Here then the inter-connections among these issues could create virtuous circles. However, if policy is under powered at one or more stage in any cycle, then such interventions are prove at best partially successful.

published in Oxford Review of Economic Policy 16 (1) (2000)

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