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The economics of public sector employment

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Our Dr Pedro Gomes has been researching public employment for nearly fifteen years. He shares why it is so important to understand how the public sector works and the key findings from his research.

Public employment is a significant consideration in any national economy. In developed countries, public employment makes up 15-30 percent of total employment and represents the large majority of government consumption. In the US, for example, the government spends 60 percent more on general government employees than on the purchase of intermediate goods and services.

The public sector also operates according to different rules than the rest of the economy, as governments do not face the same competitive forces, nor have the same objectives as private sector firms.

Considering that the public sector is responsible for delivering many key services in our society, from education to healthcare, it is essential to have a good understanding of how its employment operates. The recent COVID-19 pandemic has again put focus on the importance of having a modern public sector, with an employment force prepared to face difficult, unpredictable and unlikely crises, but its aftermath with high public debt, also puts emphasis on the costs of the public sector workforce.

Below are three of the key findings from my research into this area.

Governments hire disproportionately more educated workers

In the paper Public Employment Redux, my colleagues Pietro Garibaldi, Thepthida Sopraseuth and I explore the phenomenon whereby governments hire more educated workers than the private sector.

We noticed that governments hire very few workers with low qualifications. In the US, for example, one third of workers have a masters or a PhD qualification, and one third of these work for the government.  We documented empirical evidence for this education bias in the US, UK, France and Spain.

There are a few different explanations for this trend:

  • The government needs more educated workers to provide its highly technical goods and services, such as healthcare, education and the judicial system.
  • Higher educated workers take more of a wage penalty to work in the public sector, so are relatively less expensive to hire.
  • Public sector jobs that require low qualifications pay more than similar level jobs in the private sector, so they attract workers with more qualifications.

Within our model, we found that the technological skills needed for the public sector was the main driver of the disproportionate representation of educated workers, but that wage setting and excess underemployment explain 12-15 percent of the education bias.

Unlike other sectors, the government is able to set wages more freely, as the cost is financed from tax revenue. If the government chooses to pay very high wages, too many people will choose a skilled role in the public sector as their first choice. However, if wages are too low, too few workers will want to join the government.

In reality, a balance is needed, so the government can always attract the workers it needs, without leading to underemployment in the public sector.

Nepotism in hiring practices allows friends and family to ‘jump the queue’ for government roles

Public sector hires are often based on nepotism: Scopa (2009) found that the probability of working in the public sector is 44% higher for individuals whose parents also work in the public sector, while Colonnelli et al. (2020) found that politically connected individuals in Brazil enjoy easier access to public sector jobs.

In my research into this topic with Andri Chassamboulli, we suggest that workers can use their connections to find jobs in the public sector faster. We created a search and matching model with private and public sectors to test this theory.

Surprisingly, we encountered some positive side effects to nepotistic practices. Conditional on high public sector wages, our findings suggest that hiring through connections reduces unemployment, as people who do not have connections will instead find roles in the private sector. Conversely, if the government sets the optimal wage possible for the successful running of the public sector, nepotism is reduced.

We conclude, therefore, that nepotism is a symptom of a problem in the public sector, rather than the disease, and the problem is created when wages are set too high.

Women prefer working in the public sector

In most countries, the public sector hires disproportionately more women than men. My colleague Zoë Kuehn and I developed a model to try to make sense of this imbalance.

Our findings show that the gender imbalance in the public sector is driven by supply, meaning that women self-select to work in the public sector more than men. One explanation for this is that the type of job carried out by the government is coincidentally the type of work preferred by women, such as healthcare and education. However, even discounting these sectors, women’s public employment remains 20-25% higher than men.

This remaining imbalance can be explained by the different characteristics of public and private employment. The gender wage gap and working hours are both reduced in the public sector, making this an attractive choice for women who may be factoring family commitments alongside work opportunities in their choice of employment. Alongside reduced working hours, the public sector offers additional benefits such as more sick days, flexible hours and employer-provided childcare, ensuring an overall better work-life balance in the public sector.

 

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Examining the class system in British museum employment

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Sam Evans, a PhD researcher at the Department for Organizational Psychology, is leading a series of focus groups which will ask participants to reveal what it takes to get in and get on in the museum sector, and how social class shapes career chances and experiences.

I’m interested in how inequality is reinforced in the workplace. Class, until recently, has been surprisingly absent from the debate. Research into diversity or equality, often overlooks class, as does occupational psychology in general. Part of the reason for this absence is that class is not a legally protected characteristic, like age or gender, but also it is argued that there has been a more fundamental ‘individualisation’ of Western culture.

Class identities have become more difficult to see or express in the workplace. Our careers are thus seen as our responsibility, and we don’t often think or talk about the structural inequalities that might frame this. However, there is research suggesting inequality at work is increasing, professions are becoming more not less exclusive, and social mobility is declining.

I want to explore these issues in-depth in my research project, The Museum of Them and Us; I am interested not just in how people are classed, but also occupations, roles and organisations. I am particularly interested in why some careers and types of work favour some groups of people and not others. We assume anyone can get in and get on, no matter how tough, given they have the right personal qualities. But what is this really like for people from different backgrounds? I have chosen to look at museums, partly because I am familiar with the field, but also because visiting and working in museums is described as middle class. But why is this, does this account for all types of work, and what does this mean for people who might not be from middle-class backgrounds.

I don’t have a fixed definition of the term ‘class’ (this is a subject that has been debated for 150 years and most researchers recognise there is no one single definition), but am using Pierre Bourdieu’s concept of capital of class. This involves looking at the types of economic, social or cultural capital that are valued within different types of museum work and how this relates to the type of capital people actually have, or are able to acquire. Cultural capital is particularly important as this relates to accent, dress, education and knowledge of particular types of culture, and is often highly valued in cultural work.

I have already conducted interviews with representative bodies, trade unions and membership bodies as well as analysing reports and websites to look at how ‘getting and getting on is described’. I have found that, as with other research, museum work has become less secure and more competitive. The onus seems to be on the person to develop themselves as specialist and professional, and yet also flexible and versatile. This potentially makes it riskier and less beneficial for anyone entering the field. Class was talked about but was often described as difficult to see or measure, and most diversity initiatives were aimed at developing the individual to fit the required ways of working, rather than look more closely at how ways of working might be creating inequalities.

With the focus groups and interviews, on the one hand, I am asking people to talk about their work – what it takes to get in and on, how this might have changed, how this might be different for different roles, are some roles held in higher esteem than others and why. On the other hand, I want to talk about social class – what does it mean to people, do they think class matters and if so, how? I am also asking people to contribute images or photos that they think represent their work.

Take part in the focus groups:

If you have worked or volunteered for a museum you can take part in a focus group or an interview. If people think that class has mattered to them in particular, I am also conducting private interviews.

Taking part is confidential, enjoyable and you will be helping the sector. To take part in a focus group or an interview and for further information, please contact me or visit my website.

Thursday 5 April
6PM – 7.30PM, Birkbeck Main Building, Room MAL 420, Malet Street, WC1E 7HZ  

Wednesday 11 April
6.30PM – 8PM, Birkbeck Main Building, Room MAL 420, Malet Street, WC1E 7HZ.

Thursday 26 April
6PM – 7.30PM, Museums Association Offices, 42 Clerkenwell Close, London, EC1R 0AZ

Friday 18 May
2.30PM – 4PM, Birmingham Museum and Art Gallery, Chamberlain Square, Birmingham B3 3DH

Wednesday 23 May
6PM – 7.30PM, Museums Association Offices, 42 Clerkenwell Close, London, EC1R 0AZ

Thursday 7 June
4PM – 5.30PM, Whitworth Gallery, The University of Manchester, Oxford Road, Manchester, M15 6ER

Thursday 14 June
5.30PM – 7PM, M Shed, Princes Wharf, Wapping Road, Bristol, BS1 4RN

Or schedule an interview:
If you think social class has mattered to you personally in your work or career then you can take in part in an individual interview, by email, Skype or face to face (depending on your location).

If you are interested in finding out more, please contact Sam directly.

About Sam:

I studied History originally, and then spent about 25 years working in marketing in the museum, cultural and public sectors. A lot of my work was really about understanding people and organisational cultures as much as ‘doing’ marketing, hence my interest in studying organisational psychology.  I started studying part time about 8 years ago, first obtaining a degree in psychology at OU, then moving on to the MSc in Organisational Psychology at Birkbeck.

About the same time as graduating, I was made redundant, which forced a decision – stick to the marketing “battleship” I knew, or jump onto the less stable “raft” of psychology. I had already met some PhD students and Dr Rebecca Whiting who became my supervisor, and thought I would really like to study for a PhD here. So when I was offered a studentship, I took the leap. It’s been one of the best decisions I’ve ever made!

From Dr Rebecca Whiting, a lecturer in the Department of Organisational Psychology and Sam’s PhD supervisor:

Sam brings a wealth of experience to her research from working in this sector and an intellectual rigour from her academic training. Class is a challenging concept to research because of the many and sometimes conflicting ways in which its conceptualised and measured.

Many definitions reflect the relationship between class and socio-economic and cultural status. However, since class is not a ‘protected characteristic’ under the Equality Act 2010, it doesn’t always appear as an aspect of diversity in organizations, so is ripe for critical investigation. Museums are key locations of our socio-cultural heritage but are an under-researched context in organizational and occupational research.

This highlights the importance of Sam’s research which brings together this topic and context to explore how class impacts on museum work.

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Facing psychological coercion and manipulation has become a daily part of claiming benefits

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This post was contributed by Lynne Friedli, researcher with Hubbub; Robert Stearn, PhD candidate in English and Humanities at Birkbeck; and Dr Felicity Callard, director of Hubbub and Reader at Durham University. Hubbub is an interdisciplinary project of scientists, public health experts, clinicians and humanists funded by the Wellcome Trust and run from Durham University, with support from the Max Planck Institutes and the University of York. This blog post first appeared in The Conversation on Monday, June 8

Workfare-webCuring unemployment is a growth market for psychologists. Job Centres are becoming medical centres, claimants are becoming patients, and unemployment is being redefined as a psychological disorder.

Made-up ailments such as “psychological resistance to work”and “entrenched worklessness” feature in ministerial speeches and lucrative Department for Work and Pensions (DWP) contracts, without attracting a murmur of protest from professional psychologists.

Psychological explanations for unemployment – the failings of the maladjusted jobseeker – isolate, blame, and stigmatise unemployed people. They reinforce myths about “cultures of worklessness”; they obscure the realities of the UK labour market and the political choices that underpin it. The same is true of psychological prescriptions for treating unemployment.

Interventions

People claiming benefits are already subject to psycho-interventions through mandatory courses designed to promote “employability” and “job readiness”. And as we show in a new paper published in Medical Humanities, “positive psychology” is pervasive in Job Centres (the newly privatised Behavioural Insights Team has trained more than 20,000 Job Centre staff). A narrow set of approved psychological and personality traits are widely touted as essential to getting and keeping a job: confidence, optimism, positive, aspirational, motivated, and infinitely flexible.

Motivational “messaging” targets both staff and claimants, and is set to intensify. The 2015 budget sets out government plans to put therapists in job centres this summer. Online cognitive behavioural therapy will also be provided, in order to “improve employment outcomes” for claimants with mental health conditions. (Some of the many problems with these approaches have recently been discussed in The Conversation.)

The “change your attitude” message of positive psychology is enforced by unsolicited “positive thinking” emails sent to claimants, and in mandatory “employability” training courses promising to help with “self-esteem, self-confidence and motivation”.

Employability, workfare and sanctions

People on benefits are made to take part in various pointless and humiliating psychological group activities (like building paper clip towers to demonstrate team work), or take completely meaningless and unethical psychological tests to determine their “strengths”. But the goal is not a job with pay that you can live on. Instead, this is an intensive “change your attitude” programme, which – along with other forms of workfare – is designed to force people off benefits.

Workfare is a name for the different kinds of “work-for-your-benefits” schemes, exported from the US, which have spread to many rich democracies over the last two decades. In the UK, unemployed people are forced to work unpaid for a charity, business, or local authority in order to continue to be eligible for benefits (both Job Seekers’ Allowance and Employment and Support Allowance – the benefit paid to sick and disabled people).

Workfare also includes coaching, skills-building and motivational workshops, and schemes that are part training course, part unpaid work placement. Failure to take part in these schemes may result in harsher or more demanding workfare activities or benefit sanctions.

Sanctions amount, as David Webster has recently argued, to a “secret penal system”. Entrenched, arbitrary, and unaccountable, they deprive people of the money they need to eat and live. Workfare – backed by sanctions – also ensures a steady supply of free labour, replacing paid jobs, further depressing wages, and creating a claimant workforce without the legal status and rights normally given to workers. The unemployed person is a generator of income for everyone except themselves.

At the same time, assessing “employability” and enforcing activities said to increase it is now a central function of workfare, stimulating the growth of a state-sanctioned, state-contracted industry heavily influenced by – and reliant upon – psychological “magic” .

“Employability” isn’t a set of skills or attributes required for a specific job or job offer (receptionist, bus driver, call centre operator, care worker). Rather, it is about personality and emotions: achieving a generic upbeat state; having the characteristics, attitudes and habits of “the sort of person who can get a job” – the familiar roll call of confidence, self esteem, motivation and aspiration so celebrated by the CBI, as they lament the absence of these “job ready” attributes in young people leaving school or university and identify “a positive attitude as the key foundation of employability”.

Attitudes to work

This means that “attitude to work” – boosted by confidence courses and assertiveness sheets – becomes a legitimate basis for deciding who is and who is not entitled to social security and a condition placed on receipt of benefits.

In the past, conditionality related to things like refusing to take a job after receiving three offers of work. This was hardly beyond criticism. Now, the supposed absence of positive affect can trigger some form of sanction. “Lack of work experience or motivation” is one of the criteria for being sent on a Community Work Placement – six months’ unpaid community service for 30 hours a week.

 

https://youtu.be/GmEM1D2Im3k

Esther McVey, former minister of state for employment, talked about targeting people who are “less mentally fit, bewildered, despondent”, and about the difference between those who are “apprehensive but willing” and those who are “reticent but disengaged”. While unfit claimants will be sent on “more intensive coaching”, those who are “optimistic” can be placed on less rigorous regimes. This is how the DWP will decide who is to be punished with “extra support” – 35 hours a week at a Job Centre.

Medical professionals as state enforcers

The 2015 Conservative manifesto stated that claimants who “refuse a recommended treatment” may have their benefits reduced. This attempt to co-opt medical professionals as state enforcers is what led to the first protest by psychologists. However, while campaigns such as Psychologists Against Austerity have focused on the psychological impact of welfare reform, there has been little mention of psychology’s central role in disciplining and punishing people claiming benefits, or of the ethics of psychological conditionality.

Notwithstanding the UK’s low pay, no pay economy featuring a growing number of precarious, exploitative and part-time jobs, what employers want is “enthusiasm” and workfare is designed to ensure they get it. The “engage” training module will help job seekers achieve “a mindset that appeals to employers, assertiveness, confidence, understanding the benefits of work, motivation and coping with low mood”. In the Job Centre and at the premises of private training providers these positive psychological imperatives – frequently laughable in themselves – are plugged into a violent and coercive sanctions regime.

Substituting outcomes

The frameworks used for DWP evaluations of workfare schemes overwhelmingly focus on their psychological benefits. The explanation psychology offers, the treatment it delivers and legitimates, and the kinds of outcome it recognises, are also specified in DWP contracts worth hundreds of thousands of pounds (Focus the Mind, Achieve your Potential, Engage for Success). A programme for JSA/ESA claimants older than 50 even aims to persuade people that age discrimination doesn’t exist.

These developments raise important questions about the ethics of extending state surveillance – and state-contracted surveillance – to psychological characteristics. Psychology can offer a powerful critical perspective on these kinds of compulsion. But pressing issues of accountability and complicity have not been addressed by professional psychological bodies, in spite of persistent lobbying from anti-workfare campaigners. Boycott Workfare says that BACP – which sets standards for therapeutic practice – has been silent, and that they are still waiting for a statement from the British Psychological Society (BPS). Far from addressing the validity or ethics of assessing claimants for “psychological resistance to work”, BPS put out a press releasenoting that tests should be undertaken by qualified staff.

Psychological coercion and manipulation are part of the day-to-day experience of claiming benefits. It is time the profession took a stand against them.

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