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Connecting People with Jobs

Activation Policies in the United Kingdom

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This report examines recent activation policies in the United Kingdom aimed at moving people back into work. It offers insight into how countries can improve the effectiveness of their employment services and also control spending on benefits. The United Kingdom's policies have helped limit the rise in unemployment during the crisis. It has been at the forefront of reform efforts by OECD countries to transform and modernise policies designed to help the unemployed find work, through major new programmes such as Universal Credit and the Work Programme. Although time is needed for these to gain momentum as well as for a full evaluation of their impact to be carried out, the report identifies a number of areas where consideration should be given to additional measures or adjustments to existing ones.

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The background to active labour market policies in the United Kingdom

The UK labour market weathered the recent recession moderately well: unemployment continues to fall and the employment rate is close to its pre-recession level, and is above the international average although still some way below the highest rates in the OECD. The fall in productivity growth in the United Kingdom has been particularly sharp, with GDP expected to surpass its 2008 level only in 2014. The other salient features of the UK labour market include a fairly high level of female employment, albeit somewhat below the EU average for mothers with younger children, and comparatively low for lone parents. Immigration and natural growth notwithstanding, the United Kingdom will experience significant ageing in the next few decades. Despite high tertiary education attainment rates there is a risk that the pool of highly skilled adults in the United Kingdom will shrink relative to that of other countries. The United Kingdom is characterised by flexible labour market regulation for both permanent and temporary contracts. A minimum wage was introduced in 1998; its level relative to the median wage is towards the middle of the range among OECD countries.

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