The PSI Blog
5 June 2013
Moving workers out of the public sector: lessons for current policy from the 1990s recession
This project, part of the ESRC (Secondary Data Analysis Initiative 2012) ‘Understanding Individual Behaviour’ cluster, aims to use the experience of the great reduction in public-sector jobs following the 1990s deep recession to throw light on policy issues around planned cuts in the public-sector workforce, with these workers’ assumed mobility into the market sector, following the recession that began in 2007/8.
We are studying public-employee career adaptation - that is, movement between job types, industries and occupations, as a result of public-sector cuts. To do this, we are using the 20 years of data in the British Household Panel Survey, which follows a group of the same individuals over many years, selected to represent the 1991 UK population.
Notes on method
* An un-balanced panel is used and data is unweighted, following Taylor, Jenkins and Sacker (2011) and Wooldridge (2002:577-89).
* We map the individual pathways and create typologies to characterise their complexity.
* Logistic regressions are used to explore the influences on each pathway.
Early findings for discussion
* Using NBER peak-to-trough recession definition, public-sector employment fell over the period 1991Q2 to 1998Q2. Public-sector employment fell every year between 1991 and 1998, by 816,000 in total.
* Public-sector spells ending in this period define the set of individuals which we follow to identify pathways: 1,821 eligible individuals (that is, those that had a public-sector job spell which ended during the falling public-sector employment window).
* Observed all transitions between categories of public and private employment, retirement, full-time education, unemployment, other, then observed and created typologies to describe the pathways.
* The minority (40 per cent, 727 subjects) made at least one transition to the private sector in subsequent years while the majority (60 per cent, 1,094 subjects) negotiated a pathway without a private-sector job.
* Direct transition into private-sector employment was gained by 27 per cent, while 14 per cent had a more complex pathway to private jobs, combining out-of-labour market and unemployment status (indirect or both).
Exploring the job transition information for direct and indirect pathways.
Occupational change occurred more among those without direct pathways.
* Indirect pathways 'after' (activities after entering the private sector): 52 per cent remained in the private sector while 25 per cent moved back to the public sector. Nearly 12 per cent resulted in retirement with the remaining 11 per cent in full-time education, unemployment or other.
* 'Both' (indirect and direct pathways): for the minority 40 per cent, the direct-pathway component occurred before an indirect transition while for 60 per cent it occurred after an indirect transition.
* Indirect pathways 'between': many were primarily unemployment (42 per cent) or complex mixes (39 per cent) with primarily via full-time education (11 per cent), and another small group went through retirement (eight per cent).