What if Britain isn't really the sick man of Europe?

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Last month, the British government announced a series of proposals to help Britain get back to work, premised on claims that economic activity was surging as people lost their jobs due to long-term illness.

Regular readers of this column will recognize these themes from a series of articles I wrote in 2022 arguing that the UK faces a unique crisis among developed countries. The continued contraction of the workforce since the pandemic has been driven by a rapid increase in chronic health problems in the working-age population, including a mental health crisis among young people. But with the help of more and better data, I now believe that both parts of that story are wrong, or at best exaggerated.

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First, and most notably, the apparent increase since 2019 in the proportion of working-age Britons neither working nor looking for work is now thought to be an illusion caused by the fragmentation of response rates to Britain's Beleaguered Workforce Survey. It distorted the results. My analysis of the UK Household Longitudinal Study, an alternative source of socio-economic data with much higher response rates, shows that inactivity rates in the UK last year were slightly lower than before the pandemic. This is consistent with the Resolution Foundation's analysis of administrative data, which estimates that current inactivity is at about the same level as in 2019.

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But perhaps more importantly, a closer look at multiple data sources shows that the recent sharp rise in unemployment due to long-term illness among the UK's working-age population is not what it seems. An international comparison of the proportion of working-age adults who say they are unable to work because of long-term health problems raises immediate suspicions. While most countries' trends are exactly what you would expect from chronic disease measures, the UK has a very gentle upward slope over several decades, a roller coaster ride that rises in the 1990s, falls in the 2010s, and then surges again from 2019. no see.

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In fact, the peaks and troughs of the UK's disease-related inactivity trend coincide almost exactly with a completely different statistic: the proportion of working-age Britons receiving incapacity payments. This is important because research has consistently shown that increases or decreases in the number of health-related benefits across countries are almost always driven primarily by changes in the incentives and stringency of different parts of the benefits system, rather than changes in people's health. .

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The UK is no exception. Reopening plans in the 1980s made unemployment benefits relatively unattractive, encouraging long-term unemployed people to turn to invalidity benefits in droves. The move to disability benefits in the 1990s made medical screening procedures more stringent, and the increase in workload came to an abrupt halt. The move to Employment and Support Allowance in 2008 saw existing benefit recipients reassessed under new, more stringent criteria, and certainly reduced their workload.

Crucially, each time the system was adjusted, the proportion of Britons who said their illness prevented them from working increased or decreased with workload, despite minimal changes in their self-reported baseline health. The rise did not reflect a dramatic increase in morbidity, and the fall did not reflect a dramatic improvement in health.

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It was the same pattern for the past five years. In a system where health-related payments were already more generous than unemployment benefits, the move to universal credit and the shift from face-to-face to online assessments will once again align incentives, forcing people already long-term unemployed to box up for health reasons. It is done. . Strict conditionality requirements that threaten to deprive someone of their benefits if they wish to re-enter the labor market effectively lock the door behind them.

Of course, if we move away from the Labor Survey, which asks about the interplay of health, work and the constantly changing benefits landscape, and simply ask people whether they have long-term illnesses, we see little change in the health of working-age Britons. In recent years.

It turns out that the apparent rise in disease-related inactivity in the UK is largely not about poor health, but about incentives within the benefits system. Policies focused on the latter are most likely to put Britons to work.

[email protected], @jburnmurdoch

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