Labour market and skills
There have been several developments in the UK economy that will underpin medium to long term changes in the labour market. Although the impact of these developments will vary in each of the regions depending on its industrial structure and the flexibility of its workforce, there are some common themes that emerge which have implications for employment and skills policy. The challenges policy makers face include the existence of unemployment hotspots, high rates of unemployment within disadvantaged groups such as lone parents and the long-term unemployed, high rates of part-time working (which may be an indicator of under-employment), wide intra-regional variations in average earnings and relatively high levels of hard-to-fill vacancies.
CE offers core expertise in using modelling and statistical analysis to support planning and policy analysis. Specifically, we offer expertise in developing models of the district, regional and national economies to provide short and medium term forecasts of unemployment and other labour market indicators of interest.
CE’s Local Economy Forecasting Model (LEFM) is an efficient means of generating economic projections for the local economy and it provides a high level of sectoral detail, demographic information, and substantial labour market detail covering occupations, skills and qualifications.
Examples of recent projects undertaken in this area:
2008 UK Skills Assessment
Sector Skills Development Agency
This project, led by CE in collaboration with IER and SQW, presented an updated assessment of the UK skills and productivity performance for the Sector Skills Development Agency (SSDA). Apart from the overall management of the project, CE was responsible for 1) gathering data to assess recent and future progress towards the five ambitions set out in the Leitch Review; 2) collating data on demographic and general economic trends and conditions, including sectoral details and productivity and performance; 3) updating the basic skills model used in the Leitch Review and extending it to the UK nations; 4) identifying further research/ analysis required to improve the quality of such assessments in future. The report acted as preparatory work to support the UK Commission for Employment and Skills' responsibility to assess progress towards the UK's world class ambitions for 2020 set out in the Leitch Review.
Thames Gateway South Essex Economic Analysis
and Baseline Study, 2005 (see video clip below)
East of England Development Agency
This project, led by KPMG LLP, reviewed the economic and property context for the development of the Thames Gateway South Essex (TGSE) and developed various scenarios for the future of the area. CE's role was to provide a full economic baseline projection and scenarios for employment by sector and local area in the TGSE, reviewing the influence of international investment and major employers, to undertake an analysis of labour market activity and industrial establishment activity, and to project key skills gaps. Three different economic scenarios were developed in order to assess the potential growth/decline in existing sectors, suggest new sector and cluster opportunities and inform priorities for target markets for inward investment and infrastructure development. The three scenarios comprised: a 'Business as Usual' scenario based on CE's latest regional projections (published in Regional Economic Prospects) and on the assumption of no additional regeneration activity in the Thames Gateway area; an ‘Enhanced Growth Scenario’ in which the East of England region moves into the ‘top twenty’ EU regions by 2010, as measured by GVA per capita; and a 'Regional Spatial Strategy Scenario' which matches the planned outcomes of the policies for employment and housing in the draft East of England Plan published in December 2004.
A film was produced by HBL Media for the Local Government Channel in which the project was shown in the context of the planning needs of Thames Gateway South Essex, illustrating the importance of this kind of contribution.
To view the video clip please select one of the options below.
Low resolution (1Mb)
Dial-up access
Medium resolution (5Mb)
Skills in England, 2006
Learning and Skills Council
This project, led by the Warwick Institute for Employment Research, produced the 2006 edition of the (national) Learning and Skills Council's annual report reviewing skills needs. The project reviewed the existing evidence for the supply of and demand for skills and identified the main areas of skill deficiency. CE's role was to review the evidence relating to (a) 27 detailed industry sectors across the UK, (b) SSC footprints across the UK, and (c) the 47 local learning and skills council areas. The analysis identified and summarised the main economic trends in sectors, regions and local areas, and extracted for policy-makers the key implications for skills needs in each case.
Working Futures 2: Projections of Employment
by Sector and Region
Sector Skills Development Agency
This major project, led by the Institute of Employment Research at the University of Warwick, involved the provision of projections of employment by sector and occupation for the forthcoming decade. The projections also included a spatial dimension down to a regional and LLSC area level. CE's role, as in the earlier project Working Futures 1, was to provide the regional and local projections for economic activity and employment by detailed sector. In addition, CE's Multisectoral Multiregional Dynamic model of the UK economy (RMDM) was extended to generate projections of demographic change, economic activity rates, labour supply and unemployment by gender and age group.
Developments in skills policy and implementation had placed increasing demands on the projections, including a need for the data to be available at a more detailed regional and sectoral level. The project addressed these requirements, which had arisen as a result of the development of the LSC and its local arms and of the SSDA and the Sector Skills Councils. The results included detailed projections of employment to the year 2014, for the UK, the regions and the LLSCs. The forecasts were disaggregated by gender, status, industry (based on SIC2003), occupation and qualifications.
Evaluation of Jobpoints in Pathfinder Offices
Jobcentre Plus
This study provided an assessment of the impact of the introduction of 'Jobpoints' (which provide an ICT-based system for job-seekers to identify suitable opportunities) on Jobcentre Plus business in the first year of their installation. The study built upon an earlier assessment of the effectiveness of Jobpoints which examined the probability of finding employment in Pathfinder (pilot) offices and compared it with selected 'control' offices (where the policy was not implemented). The multivariate approach adopted in the earlier study was extended to take account of the influence of socio-demographic and economic factors on outcomes so as to present a more complete and realistic picture of the labour market and thereby to provide a more robust assessment of the contribution to improved performance made by the new policy.
Project: Understanding Performance Variation
Jobcentre Plus
Jobcentre Plus wanted to 'level up' jobcentre performance across areas. In this project an econometric study was undertaken to explain the performance of each local office on the basis of the environment in which it works (eg labour market, demographics) and actions which are under the control of the local office (including its efficiency of operation), and then suggest policy actions to bring about improvement in underperforming areas. Specifically, the analysis assessed the degree of spatial variation of jobcentre performance, analysed the extent of correlation between a selection of output and input indicators to explain variation in performance, and constructed a model to identify the characteristics that have a significant effect on performance and, of these, the characteristics that are most important in scale and relevance to policy.
Employment and Housing Growth Implications of
Second Runway at Stansted
Government Office for the East of England
This project, jointly funded by the Government Office for the East of England and the East of England Development Agency, looked at the employment and housing implications of a second runway at Stansted airport. The context for the study was that the original Regional Planning Guidance (February 2004) was prepared on the assumption of only one runway. A study commissioned from Colin Buchanan & Partners (The Buchanan Study) and published in December 2003 looked at development options of a second runway, and CE (in collaboration with York Consulting) was chosen to apply an alternative methodology which would provide a different way of viewing the impact of the expansion on employment and housing demand. The CE study used an econometric approach to isolate direct from indirect sectoral employment effects by district across the whole of the South East, and was thus able to condition the findings on the gravitational affects of other London airports which could be seen to be in competition with Stansted for freight and passenger flow. The final report was presented to a key stakeholder meeting containing representatives from the main regional institutions.
Labour Market Briefing
Jobcentre Plus
The briefing provides short and medium-term forecasts of unemployment statistics at a national, regional and district level. It explores possible explanations for any recent or expected developments in the labour market, and analyses factors that may influence Jobcentre Plus progress in meeting its performance targets and wider objectives. The forecasts and analysis are presented in the form of a written briefing, capable of being understood by non-specialists involved in a wide range of activities from policy formulation to the actual delivery of help for unemployed people.
To produce the forecasts CE produced a model which tracks Jobcentre Plus clients by age, unemployment duration and region. The system not only looks at how claimants move in and out of unemployment; it also examines how unemployed clients move within the unemployed stock (ie to different age and unemployment duration categories), which helps to identify the core client base to be targeted.
The model produces quarterly forecasts based on CE's twice-yearly regional and sectoral forecasts of the UK economy, closely matching the planning cycle of DWP.
Review of Britain's Skills Needs
HM Treasury
The study was commissioned to contribute to the Leitch Review of Skills and was undertaken in collaboration with the Institute for Employment Research. The study examined the implications for the pattern of employment by sector, occupation and skills in a future in which productivity growth is higher as a result of greater investment in human capital. The study developed quantified projections and scenarios, and drew out the qualitative implications of these alternative futures. The methodology used built on the approach adopted for the SSDA in Working Futures by developing sectoral projections within an integrated sectoral economic model of the UK, namely Cambridge Econometrics’ Multisectoral Dynamic Model, MDM and extended the projections presented there to 2020 as a ‘baseline’ projection against which two alternative ‘high skills’ scenarios were compared. Summary results were incorporated in HM Treasury's December 2005 Pre-Budget Report, and in the accompanying Interim Report of the Leitch Review of Skills, Skills in the UK: The long-term challenge.
For further information contact:
Sadia Sheikh
Manager, European Regional Service
 |
 |