Stepping stones to employment
A hard copy of this report summary can be obtained by contacting Paul Noakes [E-Mail: Paul.Noakes@dwp.gsi.gov.uk] or by writing to him at the 'Social Research Division, Department for Work and Pensions, 4th Floor, Adelphi, 1-11 John Adam Street, London WC2N 6HT'.
Research Report No. 71
By Gillian Elam and Andrew Thomas
In October 1996, the Back to Work Bonus was introduced and Jobseeker's Allowance (JSA) replaced Unemployment Benefit and Income Support for unemployed people. This report looks at part-time and voluntary work people undertook whilst claiming out-of-work benefits before the 1996 changes. The study, carried out by Social and Community Planning Research, was commissioned by the Department of Social Security, the Department for Education and Employment, the Employment Service and the Benefits Agency as part of the evaluation of JSA and the Back to Work Bonus. The main findings are:
- Part-time work was often seen as 'working for nothing', both in financial and personal terms. Claimants described part-time work as low paid, exploitative and insecure, and therefore unlikely to lead to jobs that would take them off benefits.
- Claimants who worked part-time said they did so to obtain extra cash between benefit payments, to increase self-esteem, to 'keep themselves busy', enhance their long-term job prospects, or if the extra income had little or no impact on their benefit. Claimants were reluctant to undertake regular undeclared work. Some claimants saw part-time work as a stepping stone to employment, though often in terms of securing longer hours with the same employer. Other claimants saw part-time work as a stepping stone if it provided relevant skills and experience, particularly if they wanted to enter a new area of work. However, some were convinced that part-time work was permanently designated as such and viewed it as a disruption to the search for full-time work.
- Reasons for doing voluntary work while claiming included improving job prospects and breaking the tedium of unemployment. Some saw voluntary work as a stepping stone to employment which could help to increase confidence, motivation to look for a job and a feeling of being 'job-ready'.
- Barriers to volunteering or working part-time while claiming included meeting work related costs, difficulty in finding appropriate work or work which complemented child care arrangements and employer prejudices. In addition, the level of the earnings disregard was a disincentive and respondents had a limited awareness of the rules about part-time working and claiming.
Introduction
On 7th October 1996 the Jobseeker's Allowance replaced Unemployment Benefit (UB) and Income Support (IS) for unemployed people. As part of an evaluation of Jobseeker's Allowance and the Back to Work Bonus, the Department of Social Security commissioned Social and Community Planning Research to undertake a qualitative study into the role of part-time and voluntary work among unemployed people and lone parents receiving IS and/or UB.
The study, comprising 104 in-depth interviews, was conducted in 1996, amongst: (i)people who were currently unemployed and receiving benefit, and who were working part-time, involved in voluntary work, or who were not undertaking either of these activities; (ii)former unemployed people who, whilst unemployed, had either worked part-time or participated in voluntary activities; and (iii)lone parents, receiving IS, who were either working part-time or were not involved in any paid work. The lone parent group included a small number who were engaged in voluntary work.
Looking for work - the context
The decision to look for work, and the type of work sought, depends on a range of factors. For lone parents and unemployed people these included: attitudes towards unemployment and employment aspirations; state of mind; where people are in the life-cycle; child-care responsibilities; and financial circumstances. Perceptions of the local labour market, the rates of pay on offer and the value of personal skills and qualifications also affected decisions. External barriers may also prevent or hamper finding and taking-up work, for example: cost and availability of child-care facilities; ability to travel and access to transport; lack of knowledge or understanding of the benefit system; and the state of the job market, locally and in relevant skill areas.
Part-time work
For claimants and their partners, the decision to work part-time was influenced by two sets of factors: perceptions of part-time work as a worthwhile activity, and certain barriers and concerns that can prevent the take-up of part-time employment. Part-time work can be seen as 'working for nothing', in both financial and personal terms. The reasons given for this included: the low threshold of the earnings disregards can act as a disincentive to work; extra costs incurred when working, notably child-care and travel costs; low levels of pay that are offered; and a view that part-time work is exploitative, often insecure, and therefore unlikely to lead to further or full-time employment.
Barriers to working part-time
Claimants and their partners also experienced a number of “barriers ”to taking-up part-time work, which were related in part to the limited financial benefits of such work: lack of part-time work in relevant skill areas; difficulties finding part-time work which matches child-care arrangements; the cost of part-time work, exceeding the amount earned after earnings disregards are accounted for; a lack of qualifications and relevant experience; and employer preferences and prejudices. As well as disincentives from the earnings disregards, there was evidence of other disincentives in the benefit system, notably a lack of awareness and understanding about activities that can be undertaken whilst claiming and worries about disrupting benefit payments for relatively small amounts of earnings. The perception among claimants that receipt of benefit was dependent on following many rules left some fearful of exploring part-time work in case this was construed as something 'wrong' in the eyes of the Jobcentre.
Why work part-time?
However, “claimants did work part-time”, even in low paid jobs, but tended to do so only where one of the following conditions was met: part-time work had little or no impact on the amount of benefit received; the extra income derived from part-time work was not declared; individuals worked as a means of increasing their self-esteem, an opportunity to keep busy and take a break from household responsibilities; and where part-time work was felt to enhance job prospects in the long term.
One way of increasing the financial value of part-time work would be to take-up undeclared work. This was not an option claimants wanted to pursue from choice. Whilst there was understanding of those who undertook undeclared work, there was a strong view that such work was 'wrong' and that people were forced into undeclared work, generally for relatively small amounts of money, because of desperate financial circumstances, unfavourable earnings disregards or because employers would not offer legitimate employment. The risks attached to such work and the view that it was 'wrong', meant that the stress caused by undeclared work would often outweigh any perceived gains. Those who did have undeclared earnings had weighed up the risks and benefits, but were not immune to the associated stress.
Is part-time work a stepping stone to employment?
Views about whether part-time work could be a “stepping-stone ”to full-time work were mixed. There was a tendency to consider the stepping-stone effect only in terms of whether it would lead directly to an increase in hours or the offer of full-time work with the same employer. Those who did regard “part-time work as a potential stepping stone ”included those who were looking for a career change and were using part-time work as a means to gain extra skills and experience, and those for whom their activities had a direct relevance to their future employment.
Others, however, were convinced that as part-time work was usually permanently designated as such, the “stepping stone effect was unlikely”, or felt that it was disruptive to their employment ambitions. Low levels of pay associated with part-time jobs also influenced the opinion that part-time work could not lead to financially viable full-time work. Therefore casual, irregular and undeclared jobs were rarely regarded as potential stepping stones.
When making decisions about the financial value of jobs, claimants who saw themselves as breadwinners generally calculated that they would need to earn an amount which could support the household. Such amounts were usually around current benefit levels, sometimes lower, or slightly higher to accommodate work-related costs. Despite setting “low reservation wages ”, the low hourly rates associated with part-time jobs meant that few claimants could envisage how they could be built up into a full-time wage.
In-work benefits, particularly Family Credit, were claimed by the former unemployed who had been working part-time whilst claiming IS and/or UB and had since left these benefits. Among the current unemployed, judgements about the financial viability of a job were made with little or no reference to “in-work benefits”, and claimants generally calculated an amount which would replace any 'lost' benefit payments. Lack of awareness of in-work benefits, uncertainty about their value and a reluctance to pursue employment options which would entail further benefit claims partly accounted for the exclusion of in-work benefits from calculations of reservation wages. For other claimants, in-work benefits could not be considered because benefits for housing costs were unavailable for those with mortgage payments and no equivalent of Family Credit operated for people without children. The lack of any in-work benefit contributing to mortgage costs was considered a deterrent to taking up low paid work which would take the claimant off benefits.
Job search activities
Involvement in part-time work had a mixed effect on “job search activities”. In some cases such, activities were enhanced or more focused on specific types of work as claimants had a clearer idea of what they wanted to do. In others, job search activities had ceased altogether; or had declined (whilst acquiring skills, building up a business, or in anticipation of the next job move). Among the latter group, there was a view that making applications for jobs was a restrictive definition of job search and that the pursuit of qualifications or self-employment should be regarded as equally valid ways of fulfilling the 'actively seeking' rule.
Possible “changes” identified as enhancing the take-up of part-time work and its role in enabling a move to full-time work included:
- changes to the earnings disregards
- amending Family Credit such that mortgage interest is paid;
- a 'job on trial' arrangement;
- benefits advice and better-off calculations; and
- job search advice tailored to the individual which takes into account their skills, experience, financial needs and long- term employment aims.
Voluntary activities
Volunteering is an activity not only associated with unemployment, and participation in such activities often pre-dated periods of unemployment. The reasons for becoming, or continuing as, a volunteer whilst claiming out-of-work benefits were three-fold: “direct work-related reasons ”- voluntary activities were seen as part of a considered plan to find work; indirect work-related reasons - the experience of taking part in voluntary activities was considered to enhance job prospects, but plans made about employment were usually longer-term and less considered; and “non work-related reasons ” - volunteering was undertaken partly for philanthropic reasons and partly as a way of breaking the tedium of unemployment and providing an interest. The main reasons claimants and their partners gave for not participating in voluntary activities were:
- negative perceptions about volunteering and volunteers;
- a lack of familiarity with the concept of volunteering;
- the link between participating in voluntary activities and securing work, together with the potential indirect benefits of volunteering, remain unrecognised;
- concerns about volunteering, including transport and child-care difficulties, a lack of awareness about opportunities, a concern that they might be out of pocket, and a worry that they may not have the right skills to offer; and
- voluntary activities being seen as incompatible with, or irrelevant to, their particular plans for employment.
There was evidence that Jobcentre staff had dissuaded some individuals from pursuing voluntary activities. Knowledge of the impact of voluntary work on benefits was generally sparse. There was considerable confusion, by both claimants and staff, about the amount of time a person could spend on voluntary activities and the amount of notice they would be required to give their 'voluntary employer' should they wish to take a job.
Fear of not being perceived as 'available for and actively seeking employment' by Jobcentre staff was a concern for some, leading to reluctance in informing the Jobcentre about voluntary work. There was also fear of being wrongly reported for undeclared paid work. Those engaged in voluntary work included those who did not have such concerns, some to the extent that they did not regard voluntary work as any of the Jobcentre's business. Others were confident that the benefits of voluntary work for their employment prospects outweighed any concerns the Jobcentre might raise about fulfilment of the 'availability for, and actively seeking work' rules.
Are voluntary activities a stepping stone to employment?
Whether voluntary activities were perceived as a “stepping stone” to employment depended on:
- whether volunteering was part of a claimant's definite plans for job search;
- the degree of similarity between the type of voluntary work undertaken and the type of work desired by the individual;
- whether volunteering was an acceptable route into employment;
- the extent to which an individual saw volunteering as a direct stepping stone to the same type of work; and
- likely employer intentions (do these jobs exist only because they are done by volunteers?).
Volunteer work was an important factor in maintaining motivation and confidence during “job search”, and some felt it increased job search activity. For others, the voluntary activity itself was regarded as a form of job search: either a necessary, sometimes long term, stage of acquiring specific skills or becoming 'job-ready'; or as a prerequisite for some occupations. As a result, fewer job applications were made and job search was targeted on specific areas. For others, voluntary work was maintained alongside job applications and other job search activities.
Respondents suggested a number of “changes ”they thought would enhance the role of volunteering in obtaining paid work. For example:
- breaking down the stereotype of volunteering and easing access to voluntary activities;
- offering volunteering advice tailored to claimants' needs and skills;
- promoting the indirect, and direct, benefits of voluntary activities;
- ensuring that both Jobcentre staff and claimants are aware of the regulations that govern voluntary work whilst claiming IS and/or UB; and
- ensuring that a claimant's out-of-pocket expenses are covered.
Partners of the unemployed
The influences of partners on claimants' decisions to work included: male claimants commitment as breadwinner for the household; and partners in full-time work reducing the financial pressure on claimants. Female partners' attitudes towards part-time work were, on the whole, heavily influenced by their role as the main provider of child-care within the household. Partners and claimants thought it was important for at least one partner, usually the mother, to be available for child-care. The male partner was generally regarded as having the greatest earning potential, and thus his increased involvement with child-care was not seen as financially sensible. Those whose existing part-time work fitted in with child-care arrangements were reluctant to consider increasing hours and did not regard the work as a “stepping stone ”to work. Those partners with older children who were considering part- or full-time work experienced a number of barriers including: child-care costs and jobs with unsuitable hours; out-of-date skills and qualifications; and the financial disincentive posed by the earnings disregard. Although the level of the earnings disregards were resented by some of those in part-time work, partners and claimants were reluctant to give up this work as they considered that the partners' part-time earnings would be useful once the claimant found work.
Revelant Publications
McKay, S., Walker, R. and Youngs, R. (1997) “Unemployment and Jobseeking Before Jobseeker's Allowance ”(Department of Social Security Research Report No. 73). London: TSO.
Bottomley, D., McKay, S. and Walker, R. (1997) “Unemployment and Jobseeking: A National Survey in 1995” (Department of Social Security Research Report No. 62). London: HMSO.
Shaw, A., Walker, R., Ashworth, K., Jenkins, S. and Middleton, S. (1996) “Moving Off Income Support: Barriers and Bridges” (Department of Social Security Research Report No. 53). London: HMSO.
Other relevant publications commissioned as part of the evaluation of JSA:
Croft, J. (1997) “Studying Whilst Unemployed ”(Department for Education and Employment Research Studies No. 43). London: TSO.