Monthly Archives: October 2018

Social Insecurities and Resilience

View, print or download a pdf copy here...download link and cover image
View, print or download a pdf copy here…

Eurofound publications on the quality of life inside Europe, offer profound insights into the global ‘state of the nation’ on matters that affect the individual, society and economy.

Social Insecurities and  Resilience, the latest policy brief to be published, highlights how insecure even those perceived as comfortable and secure can be, across Europe.

Eurofound (2018), Social insecurities and resilience, Publications Office of the European Union, Luxembourg. (.pdf)

Authors: Hans Dubois and Tadas Leončikas

Whether being old and feeling exposed when out after dark, or in full employment but doubting that the employment will continue beyond six months hence, the report offers a defining argument for the deployment of economic and social initiatives that put people, their sense of well being and compassionate economic energy at the heart of government thinking.

It is interesting that even across international borders, within Europe, the similarities in unease and concerns are duplicated across communities, whatever their defining local language.

‘Most of the insecurities reviewed in this policy brief have an economic component but are influenced by other factors too. For instance, perceptions of housing insecurity are influenced by tenant protection law, perceptions of old-age income insecurity are influenced by long-term care provision, and perceptions of healthcare insecurity are influenced by the presence or absence of healthcare coverage’.

The significance of having a ‘secure’ life is widely recognised. The United Nations’ 1948 Universal Declaration of Human Rights tells us that everyone has the right to ‘security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his (or her) control’ (Article 25).

In the key findings of the report it is stressed that ‘…only 1% of the EU population enjoys the highest level of security in all five types of social insecurity studied in this brief: personal, housing, healthcare, employment and old-age income. If more types were added, there might be nobody in the EU who feels free of any form of social insecurity’.

The five key measures of insecurity that the report comparatively assesses are…

  • personal insecurity – of being personally unsafe (from crime, for instance)
  • housing insecurity – of losing one’s home
  • healthcare insecurity – of being unable to afford healthcare
  • employment insecurity (for those in employment) – of losing one’s job and
    being unable to find a new one
  • old-age income insecurity – of not having an adequate income in old age

In their policy summary the report authors point out that government and state actors in the provision of services ‘…should be careful not to underestimate how widespread feelings of social insecurity are, especially more moderate forms. These may be early indicators of problems, so preventative policy-making should try to detect better, more
muted levels, as well as higher levels of insecurity’.

This report attempts a broad assay of community feelings across Europe. No small scoping exercise in itself, but when executed as here, then it provides a wealth of evidence and support for the argument that the social enterprise model should become the defining economic and civitas service provision model.

We would argue!

Human capital estimates, UK: 2004 to 2017

The Office for National Statistics has just released updated estimates of the value of human capital. For ONS ‘… the stock of human capital accounts for what skills people have and how much they earn and what qualifications they have, as well as estimating how much longer they will continue to work’.

As such, ONS argues, the value of human capital is often higher in younger workers, which have more years in the labour market ahead of them.

We can look to the historical writings of Adam Smith for the source of the concept for Human Capital, but we owe the the modern Chicago School of economists for this contemporary application of the theory, we would argue.

Human Capital Data icon and web link
View data here

View, download or print the tables containing the ONS data for this report here.

(Spreadsheet in ODS format).

This modern theory was popularized by Gary Becker, an economist and Nobel Laureate from the University of ChicagoJacob Mincer, and Theodore Schultz. However, more recently the new concept of task-specific human capital was coined in 2004 by Robert Gibbon, an economist at MIT, and Michael Waldman, an economist at Cornell. The concept emphasises that in many cases, human capital is accumulated specific to the nature of the task (or, skills required for the task), and the human capital accumulated for the task are valuable to many firms requiring the transferable skills.

The new ONS report delineates the following key estimates…

  • In cash terms the stock of human capital in the UK grew 1.8%. However, once the effects of inflation were removed human capital actually fell by 0.8%. This was the first fall in human capital stocks since 2012, reflecting slower growth in earnings relative to inflation.
  • In 2017, the UK’s ‘real’ full human capital stock was £20.4 trillion, more than 10 times the size of UK GDP.
  • The estimates highlight that in 2004 the pay premium for obtaining a degree was 41% but by 2017 this had fallen to 24%.
  • The ONS analysis also shows that between 2011 to 2017 the average stock of individuals over 35 grew by 7.0%, while the stock of those between 16 and 35 only grew by 3.6%.

We recently published  The Size of the UK Social Enterprise in 2018 – if we believe, as we do,  that the social economy is now a significant influencer of UK trade and business development – then it is pertinent to note that the value of ‘real’ gross human capital is ten times more than GDP.

The social economy must, therefore be a contributor to this value.

Also of note, is the fact that in terms of human capital, according to ONS, … the average stock of individuals over 35 grew by 7.0%, while the stock of those between 16 and 35 only grew by 3.6% over the focus period.

Continue reading Human capital estimates, UK: 2004 to 2017