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Video Summary - Moving between unemployment and employment

Released: 07 November 2013

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Welcome to this short video looking at movements between unemployment and employment.

In April to June 2013 there were 40.2 million people in the UK aged 16-64. Of which, 28.2 million were employed, 2.5 million were unemployed and 9.0 million were inactive, for reasons including looking after the family or being sick or disabled.

People are constantly moving in and out of the labour market, as well as within it, for example between employment and unemployment. We can therefore, using this diagram, look at the flows between the three labour market states. Comparing Q1 2013 with Q2 2013 we can see that 27.8 million people remained employed, 1.5 million remained unemployed and 8.0million people remained inactive.

Looking at the flows between employment and unemployment we can see that 545,000 people moved between unemployment and employment over the period, with 404, 000 moving in the opposite direction. This results in a net flow into employment of 141,000.

Next, looking at the flows between employment and inactivity ,we can see that 466,000 people moved from employment to inactivity, for example to look after the home.  433,000 people moved in the opposite direction, for example because they found employment directly from finishing full time education. This results in a net flow from employment to inactivity of 33,000.

 Looking at the flows between unemployment and inactivity we can see that 398,000 people moved from unemployment into inactivity with 523,000 moving in the opposite direction. This results in a net flow from inactivity into unemployment of 125,000.

Therefore the general direction is a net flow from inactivity into unemployment as people who were not available or looking to work begin their job search, as well as, those people who have turned 16 or have left full time education. This is followed by a net flow from unemployment to employment as people then find work and finally there will be a net flow from employment to inactivity as some people in work choose to leave the labour market, for example to look after the family or home, or to retire.

Next we will use this graph to look at the number of people that have moved between unemployment and employment between 2002 and 2013, using this graph. The lines show that except during the economic downturn in 2008/09 more people moved from unemployment to employment than in the reverse direction.

Next we can look at the percentage of people who are employed but become unemployed over the next 3 months. This is known as the unemployment hazard rate. The unemployment hazard rate peaked at 1.9% during the downturn. This means that for every 100 people who are employed around 2 will lose their job over the next 3 months. The current level is 1.4% which is still above its pre recession level.

Now we will look at the percentage of those unemployed who moved into employment over the next three months. Since the end of the downturn, for every 100 people who were unemployed between 20 and 25 people moved into employed over the next three months. However this is lower than it was before the downturn where it was closer to 30 in every 100 unemployed who would find a job.

The reason why the percentage of unemployed moving into employment is higher than the percentage of employed moving into unemployment is because the number of people employed is much higher than the number unemployed.

Looking at the top job areas that people entered and exited, for each year from April 2002 to April 2013, the top two job areas, in terms of numbers of workers, that people entered and exited were Sales and Retail Assistants and Elementary Personal Service Occupations such as Bar Staff and Waiters/Waitresses.

Lastly, it is possible to look at the impact that specific individual characteristics have on the likelihood of moving between labour market states. This is done using a statistical technique known as a logistic regression. The results of this will show how many times more likely one is to make a particular flow depending on the specific characteristics.

Firstly, looking at qualifications, between 2012 and 2013, one was around 2.6 times more likely to move from unemployment to employment if they had a degree compared to someone with no qualifications.

Next, looking at job skill, between 2012 and 2013, one was around 1.4 times more likely to leave a low skilled job compared to a high skilled job.

Looking at employment length, between 2012 and 2013, one was around 8.5 times more likely to become unemployed if they had been employed for less than 6 months compared with someone who had been employed for between 5 and 10 years.

Finally looking at unemployment duration, between 2012 and 2013, one was around 3.2 times more likely to move into employment if they had been unemployed for less than three months compared to someone who had been unemployed for over two years.

That was a look at movements between unemployment and employment.

Source: Office for National Statistics

Background notes

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    These National Statistics are produced to high professional standards and released according to the arrangements approved by the UK Statistics Authority.

Content from the Office for National Statistics.
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