Skills, Knowledge and Organisational Performance

What Incentives to Learn at the Bottom End of the Labour Market?

UK policymakers desire to see more and better jobs in the labour market mirrors deepening concern that the quality of much employment is poor, wages are low and opportunities to progress are limited. The result is social inequality, growing and highly persistent income inequality and a lack of social mobility. The focus of current policy is on the need to ensure that those at the lower end of the labour market invest in their human capital through re-engaging with learning, which is assumed to enable progress into better-paid employment. This paper argues that a set of mutually reinforcing factors reduces the incentives acting on individuals and in many cases employers, to participate and invest in education and training. Each of these factors, on their own, would be sufficient to cause problems at the lower end of the labour market. Acting in concert, as a mutually reinforcing matrix, they produce powerful reasons why many individuals perceive that the incentives to learn are weak. Our argument suggests that the fundamental causes of low pay and rotten jobs have been misdiagnosed and policy interventions that inject more workers supplied with lower level vocational qualifications into the labour pool are unlikely to produce a shock to the system that would be sufficient to engender lasting and widespread change.

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