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Understanding the long term impacts of the recession (and recovery)

Posted on 06 November 2014 by Kirby Swales, Director of Survey Research Centre
Tags: underemployment, Understanding Society, inequality, intergenerational, longitudinal, methodology

Kirby SwalesThe recession has been a defining feature of UK society in the last half decade, and with an election in sight, politicians of all stripes are keen for their account to be the one that makes the history books. From the enduring nature of the recession, to the recovery, to a squeeze on living standards, the constant stream of economic data offers many narratives. But we need much more than purely economic data to truly grasp understand the impacts of the recession, and there’s no better data out there to do this than Understanding Society.

It’s this, the balance of the recovery and the launch of new data, which was being discussed by an expert panel last Thursday with Mark Easton, Paul Johnson, Ann Berrington, Philip Blond and Nick Pearce. There was lots of talk of how this recession differed to previous experience, with employment remaining relatively high, front line public services relatively intact and no major lurch to extremism (although some would argue that UKIP are symbolic of this).

That said, the view was very much that this was not a balanced recovery and that there are some new structural trends specific to this recession – these should, in my view, be high on the longitudinal research agenda:

‘Under-employment’ rather than unemployment

While employment has not necessarily fallen to the lows seen in other British recessions, there is a new problem: a more casual labour market sees more people under-employed. We already know from the Work Employment Relations Study that the number of people on zero hours contracts has doubled between 2004 and 2011 (from 4% to 8%). 14% of companies told us that they’d reduced basic hours as a result of the recession and 41% had cut or frozen wages.

While fewer people became out of work as a result of the recession, more people want more work. It’s really important that we understand the psycho-social effects of underemployment and explore hypotheses like whether underemployment is less scarring than unemployment in term of returning to employment, and the impact of family relationships.

New inequalities: intergenerational inequalities

Where old lines may have been drawn along class, economic or occupational boundaries, new cleavages are emerging between generational groups. This is most acute in house buying, where previous research has shown that young people are locked into a vicious cycle of high rents making saving difficult, all this only compounded by soaring housing prices. Ann Berrington argued that the solution for a secure and regulated private rented sector to make renting a more viable permanency

Solutions to this can only come from and understanding of how the population moves through the life phases. We need to know whether the term generation rent will stick to today’s young people, or whether renting for longer will be an enduring feature of youth – this is what longitudinal research was designed to do.

The changing shape of the central state

Paul Johnson explained how a combination of ageing and vastly under-estimated future pressure on public sector budgets will see an ever increasing share of central government expenditure will be on health and pensions. An ageing Britain will have greater new care needs and a greater proportion of the population will be service-users. And while cuts may be a necessity, we know that the overwhelming majority continue to say that it is the government which is primarily responsible for sick people.

Longitudinal data will add a lot to the picture, as people live longer and more of society is older, health behaviours and attitudes to old age are set to change hugely. By following individuals through transitions, we should be able to understand the impact of changing state provision on how  peoples’ well-being and behaviours.

Understanding Society is already helping monitor these and other impacts from the recession, including research into personal finance we did last year. Understanding Society and other longitudinal surveys add perspective to the constant stream of ‘cross-sectional’ economic data (comparing year-on-year rather than from year to year) helping us to unpick transitions and the process of social change

However, longitudinal survey data is inevitable retrospective and we need ways of looking forward too. Nick Pearce made a powerful case for moving away from traditional measures of inequality to a focus on the quality of social relations in the UK.  Phillip Blond argued for a change in our thinking from income to assets. The discussion highlighted to me how the combination of social and political commentary with the latest empirical data makes for better insights.

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