Wage and Employment Dynamics - Phase 3 (WED3)

Many OECD countries have been utilising linked administrative data sources to understand their labour markets for many years, allowing them to gain a deep understanding of labour market dynamics. The UK has fallen behind due to the lack of an integrated view on the whole of an individual's labour market interactions.

The ADR UK funded projects Wage and Employment Dynamics Phase 1 and Phase 2 (WED1 and WED2) sought to address this by combining ONS survey data from the Annual Survey of Hours and Earnings (ASHE) with business data, Census 2011 data, and administrative earnings data from HMRC. The aim of WED Phase 3 (WED3) is to complete this process, creating a sustainable, integrated, documented set of datasets prepared for research, linked by a wage and employment spine (WES) held by ONS.

This has the potential to fundamentally transform GB research and policy analysis across a vast range of topics. Public benefit is maximised through the provision of high-quality information on the datasets themselves (metadata) and training for accredited researchers. Alongside the creation of data infrastructure, the project will generate its own research findings of direct interest to policy makers, to demonstrate that the data creation provides research value.
WED1 created an improved, quality-assured and reweighted ASHE, and linked to the Census 2011 and Inter-Departmental Business Register. WED2 is in the process of linking in HMRC Self-Assessment and PAYE data, so that a complete picture of the working life can be gained.

WED3 is proposing to integrate:
-Migrant Worker Scan (MWS) - Q1 2023
-Census 2021 - Q2, 2023
-Education participation and outcome data (EPO): (e.g., HESA Student Record; Longitudinal Education Outcomes data and Destination of Leavers from Higher Education/ Graduate Outcomes - Q3, 2023
-DWP Benefits and Income Data (BIDS) - Q4, 2023

By linking these datasets, the project aims to ensure that the information on individual personal characteristics remains current (Census 2021). It will also enable researchers to gain a richer understanding of the impact of education on earnings and firm productivity, as well as the individual's experience of higher education and its impact over their working lives (EPO); the experience and impact of migrant workers in the workforce (MWS) and what happens to individuals when they leave the labour market or interact with the benefits system for any reason (BIDS).

The proposed work under WED3 will enable the benefits of the WED1 and WED2 to be fully realised, enabling researchers to better understand and improve current policy challenges, such as in-work poverty, the Gender/Ethnic/Disability Pay Gap, and the impact of the National Minimum Wage. The creation of these new links will bypass limitations created by solely analysing individual datasets, thereby enabling researchers to broaden their scope and understanding of the labour market in Great Britain.

In line with ADR UK's priorities, the WED team are actively engaging with the public and organisations that represent them to understand their interests and concerns in relation to using public sector data for research purposes. The WED team has set up a governance structure of three stakeholder groups (government, academic and public) to ensure the needs of all parties are met, and to ensure that the public sector data used in the project is used ethically and responsibly. This structure also enables groups to shape research, maximising the public benefit of administrative data research.

We have strong support for WED3 from data owners (e.g. HMRC, HESA), project partners (Low Pay Commission) and strategic data users (e.g. HM Treasury and Bank of England), evidenced by signed letters of support. The project will place the UK amongst leading nations when it comes to understanding the dynamics of their labour market; and this will help inform policy, ultimately leading to improvement in the lives of its citizens.