Rise in state pension age a factor in record employment

The rise in older women in the workforce has been partly responsible for the UK’s record employment rates in recent years, according to a new report which finds that falling incomes since the 2008 recession have driven the work boom.

The report, Feel poor, work more, by the Resolution Foundation says employment rates have been driven by workers feeling pressurised to work more to compensate for lower earnings and a squeeze on working age benefits over the past decade and by new workers coming into the labour market, including second earners and older women affected by rises in the state pension age.

The report highlights three key trends:

• More hours. Working more hours is the easiest way for workers to respond to an income shock
• More workers. Another key route to boosting family income is to raise employment within the household. The report shows a major, and new, rise in second earners. While the employment rate of coupled mothers saw no increase pre-crisis, it has increased by over five percentage points over the past decade. At the same time their average working week has increased by over two hours.
• More employment across crisis-affected economies. The report shows that other countries experiencing a similar income shock over the past decade have also seen employment levels rise significantly, bar a few exceptions in Southern Europe.

The Foundation notes that the combination of more people working (37 million hours) and people working more than they might have otherwise done (28 million hours) together mean that Britain is working 65 million more hours each week than they would be had the 2008 employment rate and pre-crisis hours-reduction trend continued.

The report says that while the employment boom has had an unwelcome cause, it should still be welcomed as it has helped households protect their living standards and closed employment gaps between places and groups.

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