Report highlights positives and negatives of increasing job mobility

A new report from the Resolution Foundation think tank and the Centre for Economic Performance at the London School of Economics looks at the likelihood of increasing job mobility in a changing labour market and how older workers, though less likely to change sector, are more likely to make bigger moves when they do.

Older man and younger woman looking at a computer


Younger workers are more mobile in terms of changing occupations than older workers, but when older workers do change occupations they are more likely to move to occupations with significantly different tasks, according to a new report which looks at how the UK can make labour market changes work for the benefit of workers.

The report by the Resolution Foundation and the Centre for Economic Performance at the London School of Economics, part of the Economy 2030 Inquiry project, finds that the rate of structural change in the labour market is likely to increase in the coming years – perhaps as much as or more so than during the 1980s – and that policymakers need to ensure that the positive effects outweigh the negative by encouraging movement away from declining sectors to higher paid ones.

Although current rates of change and mobility are low, the research finds that young workers are much more likely to move occupations when they move jobs – from 2002 to 2020, 70 per cent of 25-year-olds’ job moves involved changing occupation, compared to 55 per cent of 60-year-olds’ moves. However, when older workers do move occupations, they tend to make more significant occupational transitions.

The report also finds that pay increases faster when people move jobs than when they stay put. On average, from 1975 to the present day, it finds individuals who moved jobs enjoyed typical pay growth 4 percentage points higher than individuals who stayed in the same job. The “movers’ bonus” is even higher when workers move to a job in a different sector or region. The report says this suggests that economic change, and changing patterns of demand for workers across sectors, is likely to create opportunities for some workers to move to where demand and pay is higher, even if housing costs might be higher.

However, it also finds that forced moves, ie through redundancy, tend to take longer to find a new job and on average return to a job on lower pay than the one they left. Moreover, the report finds that 40 per cent of workers in declining sectors who experience involuntary job loss either return to work in the same sector or in another declining sector. They also typically move ‘away’ from jobs placing emphasis on analytical and personal tasks and ‘towards’ jobs involving manual work. This is unlike those who make voluntary job moves who tend to move towards more analytical jobs.

The report says rates of worker mobility are likely to rise again due to changes in the labour market. “While some workers will be able to turn economic change to their advantage and make pay-enhancing job moves, many won’t,” it says. “And involuntary job losses are costly for workers, both in the immediate sense, but also because those experiencing them are likely to make ‘bad’ job moves on re-entering employment.”

The report says policymakers need to consider how to promote the positive opportunities such change presents some workers, while mitigating the negative impact on others.

Meanwhile,  a 75-year-old worker has successfully sued Asda for age discrimination after her boss asked if she wanted to retire. Joan Hutchinson, who suffers from dementia, resigned after her manager made her feel she was being “pushed out of the business” and was “too old to be there.” A tribunal heard that she had worked at the supermarket for 20 years but colleagues began to notice her slowing down at work, becoming “flustered” and losing her personal belongings. However, she refused to speak to the supermarket’s occupational health department, or have her bosses speak to her family. Hutchinson could be in line for compensation, but any potential payout may be reduced as the tribunal noted that if she had carried on working at Asda it was likely she would have been fairly dismissed “for reasons of incapacity owing to the deterioration in her condition”.

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