The 1990's: sectoral rebalancing, mobility and adaptation - the employment, self-employment and training policy lessons for the current UK recession

The recent recession, beginning in 2007/8, has taken a different course from previous ones, with a relatively moderate increase in unemployment initially but large cuts in public sector employment planned over the coming years. It is anticipated that the workers exiting the public-sector will be absorbed by a recovering and expanding private sector. Studies of unemployment, while important, will provide only a partial view of the transitions that are entailed by this change. Many individuals are likely to leave their former career paths and seek new ones, such as self-employment, without necessarily appearing in official unemployment figures. So we propose a broad study of the movements between industries and occupations, and of career adaptation, in which unemployment will form only a subsidiary part.

The main objective of the research is to discover how the experience of the 1990s could be used to throw light on the policy issues around the planned cuts in the public sector workforce. Part of our aim is to use existing survey data to explore what subsequently happened to the individuals involved in the 1990s when there was also a deep recession and a great reduction in public sector jobs. We will also test whether there was a general movement into the private sector for these individuals. The research uses information from the British Household Panel Survey (BHPS) which began in 1991 and follows the same group of individuals who were selected to represent the 1991 UK population in 1991 over many years.

We will use the 20 years of data covering the 1990s and early 2000s in this survey as a window on these issues. The study will take advantage of several recent developments in mobility and career theory, and will assess the relative value of occupational and industrial position (in addition to educational and skill attainments) as resources for career continuity and adaptation. In terms of method, the long 20 year period offered by the BHPS will be used to take account of individual characteristics while estimating the effects of individual and household characteristics and employment history on a range of economic and outcomes such as earnings and wellbeing. From a policy viewpoint, the study will incorporate an emphasis on the role of training in curbing the effects of an individual's forced shift from the public sector, will estimate the relative private costs to the individual and benefits of mobility, and will also generate recommendations for career counselling for those required to move from jobs or occupations through redundancy or cutbacks. Although the value of job training has been well documented in the existing literature, here we address a new question, which is the value of job training for workers facing redundancy.

The unique aspect is that this analysis shifts the emphasis from displacement and unemployment to policy prescriptions for enhancing adaptation and resilience and pathways for mobility. One of the main aims of this research is to produce policy guidance for policy makers. The chief guidance to result will be recommendations on the form of career counselling for those displaced from jobs or occupations. This will help inform on the aspects of resilience and adaptation for the displaced and favourable outcomes and suggestions for how these eventuate and possible formulations for encouraging these. Other policy guidance will arise in the informing of the role of training in mediating or moderating the effects of displacement. Additionally, the relative private costs and benefits of mobility will be estimated and this can inform on the value of the outcomes of mobility in the economy and whether these are favourable or not. The potential impact is that such information would increase the effectiveness of policy decisions and may play more central roles in the development of policy. Generally, the impact outcome may be that this research can inform on improving the UK recovery rate from recessions.

This is still appropriate timing for research that can influence policy with regard to policy changes needed for the current recession. There are not strong indicators that the UK economy has escaped from a double dip recession. Some economists suggest the depressed economy may last 10 years. Such policy guidance can be useful for future recessions, should they not be avoided. While the pathways to impact plans dissemination and publication that will be as broad as possible, to enhance traditional research impact indicators such as number of publications in leading journals or subsequent citations, there is a growing body of evidence that this measure does not correlate well with policy influence or wider impact. There are likely to be direct impacts on policy from this research but also the indirect or induced effects on policy, given the diversity of additional factors that can influence the policy-making process. There may be less tangible impacts, such as changes in the common ways of examining policy or processes that lead to multiple changes in policy decisions across individuals, institutions or nationally. The potential impacts are likely to be realised in a period spanning from the immediate availability of early research results and their dissemination, to a much greater duration. This is because the research results can set the stage for a policy change that occurs at a much later date when the original research results are quite dated. However linked to this is the 'Cassandra problem' (Ryan and Garrett, 2004); is it possible to capture and value 'good research advice' that is not taken? Or delays in taking the advice?

This research is likely to produce benefits for society. It is often difficult to quantify such benefits as they tend to lack market values, however improving the recovery rate from recessions could be expected to have benefits for economic prosperity, performance and social welfare with by products being improved health and wellbeing of the population.

Others users who will benefit from this research will be academics in the fields of economics, sociology, public and social policy. The findings should develop understanding in the areas of mobility theory and career theory through the UK empirical results produced.