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Ian Brinkley
Economic Advisor
Ian Brinkley

Women and the Autumn Statement

Authors: Ian Brinkley

23 October 2014

The Treasury has published a briefing note showing the growth in women’s employment since 2010 as background to a series of visits the Chancellor is making to gain insights into how the government can do more to support women in work as part of the preparation for the Autumn Statement. The attention of such a senior Minister to women’s employment prospects is very welcome, especially if it leads to additional support for working women and for women who would like to work.

And the Treasury note includes a lot of good news. The employment rate for women is at an all time high and the vast majority of new jobs filled by women have been high skilled jobs.  It might have been more balanced to also acknowledge that the UK has a large share of low paid jobs compared with some other OECD economies and that they are disproportionately held by women. Even so, there is clear evidence of progress for better educated women since the end of the recession.

The Chancellor in particular has highlighted a possible extension of the Business Childcare Grant which could, if implemented, secure up to 50,000 childcare places according to Treasury estimates. This may or may not be the best way to increase the employment rate. The Childcare Grant is a modest scheme that provides a small sum of money to help child-minders get started and also for those who wish to set up a nursery. However, there seems to be no assessment of whether the grants lead to additional provision (in other words, are more people offering child-care services than would otherwise be the case and if so how much) and what impact that provision has on the employment rate for women?

It is also worth pointing out that a significant contribution to the recent growth in the UK female employment rate has come from older workers. The measure highlighted is unlikely to have much impact on this age group. It is important to sustain the DWP’s efforts to improve the employment prospects for older women alongside more targeted help with childcare.

The Treasury claims that the UK will overtake the current German female employment rate at the start of 2015 and that the UK would have the highest employment rate in the G7, although this would presumably also mean overtaking Canada which has a higher employment rate than Germany. It also seems to assume that the current German employment rate will not change. This may indeed prove the case, especially if Germany flirts with recession. But in 2007 the UK employment rate was higher than in Germany. Germany overtook the UK because between 2007 and 2013 the German female employment rate increased much faster than in the UK, so it may be a little premature to claim the crown.

The UK’s expected position as top of the G7 – should it be realised  - is a slight improvement on the relative position in 1984 (the furthest back we can go for the UK in the OECD database)  when the UK female employment rate was then joint second in the G7 along with Canada, and second only to the United States. It would also be slightly better than in 2007, when the UK was second behind Canada, having overtaken the United States. The actual position today is that the UK is in a slightly worse relative position than it was in both 1984 and 2007, ranking third. The table below gives the figures, drawing on annual data. This is not quite as up to date as the Treasury note, but the relative positions do not change significantly.

The UK has undoubtedly made significant progress under successive governments, but so too have many other OECD economies.  Hopefully we will see further practical and effective support measures to help achieve the commendable goal of having the highest female employment rate in the G7 set out in the Autumn Statement.