Scottish Government

Social Focus on Disability 2004

chapter five: Labour Market

The UK Green Paper Towards Full-Employment in a Modern Society set out the Government's goal with regard to employment which is to 'create and then sustain employment opportunities for all over the next decade - in every part of the country'. However, the paper recognises that 'for disabled people, the barriers to work can be formidable,' and it sets out policies for how the situation of disabled people can be improved. But how do working age disabled people in Scotland fare in the labour market?

This chapter presents data on the working age population of Scotland using annual data from the Labour Force Survey. The results show that there are significant differences between disabled and non-disabled people's experience in the labour market:

• Economic activity rates for both disabled men and women are much lower than those for non-disabled people.
• However, participation in the labour market varies markedly by type of disability or health problem.
• Unemployment rates are higher for disabled people than for the non-disabled.
• There are a higher proportion of part-time workers in the disabled population than in the non-disabled population.
• There is a difference between the average gross wages for disabled people compared to non-disabled people.

Labour Force Survey

The Labour Force Survey (LFS) is a quarterly survey of households living at private addresses in Britain. Since 1997, LFS respondents have been asked questions to identify whether they have a current disability covered by the 1995 Disability Discrimination Act (DDA) or a work limiting disability or both ( see Appendix 2 for definitions). For the purposes of the analyses presented in this chapter, all people who declare that they are DDA disabled or work limiting disabled are included in the category 'disabled'.

The questions asked in the Labour Force Survey allow for people to be classified as economically active or inactive. The active population consists of those in employment or those who are unemployed. According to the internationally agreed definitions set out by the International Labour Organisations, the unemployed are those individuals who are without a job, are available to start work within the next two weeks and who have been seeking a job within the last four weeks, or who are waiting to start a job already obtained within the next two weeks. The economic activity rate is defined as the proportion of the working age population who are economically active; the employment rate is the proportion of the working age population in employment; and the unemployment rate is the proportion of the economically active population who are unemployed.

The inactive population consists of those who would like to work, are actively looking for work but are unavailable to start a job within the next two weeks; those who would like to work but who are not seeking work and are not available to start within the next two weeks; or those who would not like to work and who are not seeking work.

The Labour Force Survey in Scotland is based on a sample size of households and all data is subject to sampling errors. To minimise this volatility, annual LFS data has been used. This will improve the reliability of the statistics as the annual data is based on a larger sample. However, for measures based on small samples, such as people with disabilities, the sampling errors will be larger. Care should be taken when interpreting these results, especially those which show year on year changes (Charts 5.1-5.4) since it is possible that observed changes could be due to sampling errors rather than real changes.

The Scottish Executive and the Office for National Statistics have jointly undertaken an exercise to boost the Scottish element of the Labour Force Survey which will produce better estimates of the measures used in this report. It is anticipated that results from the first year of the boosted survey will be available in November 2004.

The disabled population and participation in the labour market

Disabled people form a significant part of the working age population in Scotland. According to the 2003 Labour Force Survey there were 662,000 working age people in Scotland (or 21 per cent of the working age population) estimated to have a disability. ¹¹ Just under half (49 per cent) of these people were active in the labour force. This compares with a rate of 86 per cent for those without a disability and 78 per cent of the working age population as a whole. Table 5.1 provides a full breakdown of economic activity by sex and disability status.

Charts 5.1-5.4 show how these rates have changed over the time period from 1999 to 2003:

Source: Labour Force Survey

The economic activity rate for disabled people of working age has increased from 43 per cent in 1999 to 49 per cent in 2003. The rate for the non-disabled population has remained fairly steady over the four-year period.

Source: Labour Force Survey

As with the economic activity rate, the employment rate for disabled people has shown an increase from 37 per cent in 1999 to 45 per cent in 2003. The rate for non-disabled people has shown a smaller increase from 79 per cent in 1999 to 82 per cent in 2003. The employment rate for disabled people in Scotland is lower than the rate for the UK as a whole, but this difference has narrowed significantly since 1999 when the UK rate was 45 per cent (compared to 37 per cent for Scotland) to a difference of 3 percentage points in 2003 (45 per cent in Scotland compared to 48 per cent for the UK).

Source: Labour Force Survey

It is not surprising given the rise in the employment rate for disabled people over the last four years that the unemployment rate has shown a sizeable decrease from 15 per cent in 1999 to 9 per cent in 2003. The rate for the non-disabled population has shown a small decrease from just over 6 per cent to 5 per cent.

Source: Labour Force Survey

Economic inactivity for the disabled population has decreased since 1999 to just over 50 per cent. The rate for the non-disabled population has shown a very small drop to almost 14 per cent.

Reasons for economic inactivity

When a respondent to the LFS has stated that they are not looking for work or are unavailable to start work within the next two weeks, a series of further questions are asked to determine the reason for their 'economic inactivity' (e.g. whether they are students, or awaiting the outcome of a job application). Two of the possible reasons for economic inactivity are being temporarily sick or injured, or being long-term sick and disabled. Table 5.2 shows the proportion of the disabled and non-disabled population who noted illness or disability as their reason for not wanting to work or not being available to start work. Over three quarters of inactive disabled people of working age list their disability or illness as the reason for their not working compared with only 3 per cent of the non-disabled population.

Economic activity by age and disability status

Economic activity rates for both the disabled and the non-disabled population do vary considerably with age. Chart 5.5 shows that, for the non-disabled population, economic activity is lowest at 72 per cent between ages 16-24 years (due in part to participation in higher and further education), increases to its highest rate of 93 per cent for ages 35-49 years and then decreases slightly to 86 per cent for those aged 50 years to retirement.

The pattern for disabled people is different. The rate of economic participation is broadly similar for those aged 16-24 years, 25-34 years and 35-50 years at around 55 per cent. This rate then decreases to 41 per cent for those aged 50-retirement.

Source: Labour Force Survey

Labour market participation by type of disability or health problem

The LFS classifies the main type of disability or health problem reported by respondents and the prevalence of each is shown in Table 5.3. According to the LFS, the most common disability/health problem for working age disabled people are back and neck problems (14 per cent) followed by leg and feet problems, chest and breathing problems; and heart, blood pressure and circulation problems (all 12 per cent).

As already shown in Table 5.1, overall, 49 per cent of those people classified as disabled by the LFS are economically active but this varies substantially by disability type or health problem (Table 5.4). For example, 71 per cent of working age disabled people who list diabetes as their main illness are economically active compared with 25 per cent of those who have depression or bad nerves. Similarly 69 per cent of those with chest and breathing problems are economically active compared with 44 per cent of those who have epilepsy and 37 per cent of those with learning difficulties.

Employee/self employee status

Table 5.5 shows that, of those disabled people who are in employment, 87 per cent of them are employees compared to 90 per cent of the non-disabled population in employment. There is no significant difference between the proportions of disabled and non-disabled people who are self employed.

Full-time/part-time status

Table 5.6 shows that there are also differences between the proportion of the disabled and non-disabled population in employment who work full-time and part-time. Full-time working is more prevalent among the non-disabled population (76 per cent compared to 71 per cent of disabled people in work) whereas part-time working is more common among the disabled (28 per cent compared to 24 per cent).

Public and private sector employment

The proportions of the disabled and the non-disabled population working in both the private and the public sector are almost identical.

Employment by industry group

Table 5.8 shows the proportion of working age people in employment who are employed in broad industry groups by disability status. There is very little difference between the disabled and non-disabled group.

Income

Table 5.9 shows that there are differences for disabled and non-disabled people in the average gross weekly pay in the main job for all working age people in full-time employment. ¹²

The average gross weekly pay in the main job for those disabled people in full time employment is around 0.9 of that for a non-disabled person.

Qualifications and economic activity

Table 5.10 shows the highest level of qualifications gained by working age people broken down by economic activity and disability status. ¹³

There are large differences between the disabled and the non-disabled population in the proportion of people who have no qualifications or qualifications outwith those listed in the LFS: 30 per cent of disabled people have no qualifications or qualifications outwith those listed compared to 12 per cent of the non-disabled population. At the other end of the spectrum, the proportion of disabled people who are educated to degree level or above is less than half that of non-disabled people (8 per cent compared to 17 per cent). However, Table 5.10 also shows that there are differences in qualifications within the disabled and the non-disabled group. When the populations are split into those who are economically active and those who are inactive, it is clear that the economically active population have a higher proportion of people whose highest level of qualification is 'higher education' or above: 28 per cent of economically active disabled people compared to 10 per cent of inactive disabled people and 33 per cent of economically active non-disabled people compared with 18 per cent of inactive non-disabled people.

References

Disability Discrimination Act 1995
http://www.legislation.hmso.gov.uk/acts/acts1995/ukpga-19950050-en-1.htm

Labour Force Survey
http://www.statistics.gov.uk/STATBASE/Source.asp?vlnk=358&More=Y

Towards Full Employment in a Modern Society
http://www.dwp.gov.uk/fullemployment/

Contacts

Telephone contact points for information relating to Chapter 5, Labour Market:

Scottish Executive