New Labour and the labour market

The recent run of good macroeconomic news masks mounting evidencethat worklessness is increasingly concentrated on selected individuals,households, and socio-economic groups and in geographical areas.These distributional aspects have been overlooked or ignoredover the last 20 years, but we believe they now form the mostpressing labour-market and social problems facing this administration.We focus on what we view as the government's selected priorities:the concentration of unemployment on certain individuals, groups,and areas; increasing inactivity, especially marked among lesseducated, older men; low pay, persistence of low wages, andits relationship with job loss; and the distribution of workacross households and child poverty. Many of these problemsleave lasting scars on individuals, so that successful interventionmay beneficially change an individual's life-chances. We examinethe evidence on each of these issues and the current state ofpolicy aimed to reduce their scale or intensity.