The 1990s: sectoral rebalancing, mobility and adaptation - the employment, self-employment and training policy lessons for the current UK recession

Funded by: ESRC


October 2012 to August 2013

PSI researchers:

Genevieve Knight

Sergio Salis

Karen Mackinnon

Michael White

Background, summary and aims

Background, Scope and Aims

The recent recession, beginning in 2007/8, has taken a different course from previous ones, with a relatively moderate increase in unemployment initially but large cuts in public sector employment planned over the coming years. It is anticipated that the workers exiting the public-sector will be absorbed by a recovering and expanding private sector. Studies of unemployment, while important, will provide only a partial view of the transitions that are entailed by this change. Many individuals are likely to leave their former career paths and seek new ones, such as self-employment, without necessarily appearing in official unemployment figures. So we propose a broad study of the movements between industries and occupations, and of career adaptation, in which unemployment will form only a subsidiary part.

The main objective of the research is to discover how the experience of the 1990s could be used to throw light on the policy issues around the planned cuts in the public sector workforce. Part of our aim is to use existing survey data to explore what subsequently happened to the individuals involved in the 1990s when there was also a deep recession and a great reduction in public sector jobs. We will also test whether there was a general movement into the private sector for these individuals.  The research uses information from the British Household Panel Survey (BHPS) which began in 1991 and follows the same group of individuals who were selected to represent the 1991 UK population in 1991 over many years.

Project Design

We will use the 20 years of data covering the 1990s and early 2000s in this survey as a window on these issues. The study will take advantage of several recent developments in mobility and career theory, and will assess the relative value of occupational and industrial position (in addition to educational and skill attainments) as resources for career continuity and adaptation. In terms of method, the long 20 year period offered by the BHPS will be used to take account of individual characteristics while estimating the effects of individual and household characteristics and employment history on a range of economic and outcomes such as earnings and wellbeing.

Importance of Research

From a policy viewpoint, the study will incorporate an emphasis on the role of training in curbing the effects of an individual's forced shift from the public sector, will estimate the relative private costs to the individual and benefits of mobility, and will also generate recommendations for career counselling for those required to move from jobs or occupations through redundancy or cutbacks. Although the value of job training has been well documented in the existing literature, here we address a new question, which is the value of job training for workers facing redundancy.