Labour market policy and well-being APPG on Well-Being Economics 10 th March 2014, London Saamah Abdallah Centre for Well-being nef (the new economics foundation)

Policy should seek to enhance people’s well-being: “it will lead to government policy that is more focused not just on the bottom line, but on all those things that make life worthwhile.” David Cameron, Nov 2010 …So how does that apply to labour market policy?

Key job-related well-being determinants: Work-life balance and working hours Fair pay Job security Safe working environment Achievable, job-fit and skill-use Relations at work and with managers Control Social value

Fair pay Understanding Society Survey,

Job security Having a temporary contract incurs a life satisfaction penalty beyond any impact resulting from the lower income (0.52 points biggest difference) European Quality of Life Survey, 2011

Job security How likely do you think it is that you might lose your job in the next 6 months? (13% in UK say it is likely or very likely – higher than many countries) European Quality of Life Survey, 2011

Working hours Negative effect affects over a quarter of working adults in sample Significant effect even when excluding top income quartile European Quality of Life Survey, 2011

Work-life balance European Quality of Life Survey, 2011 Work/life balance is strongest predictor of stress, fifth strongest predictor of life satisfaction and third strongest predictor of overall well-being

Unemployment European Quality of Life Survey, 2011

What are the objectives of labour market policy? Well-being Employment rate Job security Working hours Income Labour market policy Productivity

Potential applications Minimum wage Labour market flexibility Working time directive

Minimum wage Well-being Employment rate Job security Working hours Income Raising minimum wage Productivity

Labour market flexibility Well-being Employment rate Job security Working hours Income Enhancing job security Productivity - 1% + 10% per person +0.4 per person

Labour market flexibility Worked example: Assuming everyone had life sat 7.0 before intervention % affectedWB beforeimpactWB after People who become unemployed1% People who feel more secure10% Average well-being Increase in well-being0.4%

Working time directive Well-being Employment rate Job security Working hours Income Implementing working time directive Productivity

Job quality Well-being Job quality Promoting job quality Productivity Income £££ ?

Questions What would a well-being approach to labour market policy look like, and what evidence is needed to underpin it? What are the implications for this approach for: – Low pay – e.g. the minimum wage – Job security – e.g. employment protections – Working hours – e.g. Working Time Directive – Job quality – e.g. promoting employee well-being