Income and employment: introduction

Income and employment are, along with education, key social determinants of population health and health inequalities (Macintyre, 2007). This has been recognised at many levels, for example by the Final Report of the WHO Commission on Social Determinants of Health, the Marmot Review in England and the Scottish Parliament report on Health Inequalities. Income and employment are considered to be so essential to official approaches to tackling inequality that income deprivation and employment deprivation are two of the main domains of the Scottish Index of Multiple Deprivation (SIMD), which provides these types of data broken down to a small area level (data zones) across the whole of Scotland. 

Income

Income matters for child health and has well evidenced direct and indirect links with children’s outcomes, especially their social and emotional development.  It also has important links with cognitive development and educational attainment, with long-term consequences for health inequalities as children move into adulthood.  Increased household income is also beneficial for adult mental health and wellbeing (in particular, reducing anxiety, stress and depression), as well as broadening choice on education and employment, with likely further positive impacts on health.

Mack (2016) provides a useful introduction to different ways of different ways in which income levels can be defined.  The most commonly used are:

  • Relative and absolute poverty lines, based on an arbitrary income threshold (currently 60% of median income, adjusted for household size and composition).
  • ‘Consensual approaches’, such as the Joseph Rowntree Foundation Minimum Income Standard, which use public opinion to identify income levels that will allow people to achieve a minimal, socially acceptable standard or living.

A third approach is the minimum income for healthy living (MIHL), proposed by Morris et al. (2000), where the minimal costs required to obtain “the major personal requisites for health and nutrition, physical activity and psychosocial relations…plus a home and other necessities” are set by expert opinion. 

Using the 60% of median income measure, 17% of the Scottish population (880,000 people) were living in relative poverty before housing costs in 2015/16.  After housing costs, the number of people living in poverty increased to one in five (1.05m).  A majority of working-age adults and children living in poverty in Scotland in 2015/16 lived in households where someone was in employment.    

The 2016 report on the Minimum Income Standard concluded that: "in a tough economic environment, it is becoming harder for many families to achieve a minimum income", with childcare costs and cuts to the value of social security benefits in and out of work contributing to this.  However, the authors of that report argue that continuing to expand the availability of free or low-cost childcare, especially to low-income families, and increasing the work allowance in line with the National Minimum Wage, would help improve matters.

In addition, out of work benefit levels are set at too low a level to allow for working-age people to maintain an adequate standard of living.  For a single adult, after housing costs, a minimum income for healthy living (MIHL) for a single working-age adult would be around £128 per week, while the Minimum Income Standard would set a higher threshold, of £186 a week (2016 figures).  Current benefit levels (excluding housing benefits) for adults over the age of 25 are ~ £73 per week for those in the Employment Support Allowance (ESA) assessment group or claiming Job Seeker’s Allowance, £102 per week for those in the ESA Work-Related Activity Group and £109 per week for those in the ESA support group.  New claimants in the ESA-WRAG group saw the weekly value of their benefit cut to £73 in April 2017.  McAuley et al. (2016) present evidence to show increasing the value of benefits for working-age adults is likely to have a large impact on reducing health inequalities.

Employment

For working-age adults, being in employment can dramatically reduce the risk of premature mortality and morbidity. A 2011 systematic review summarised that, on average, mortality rates in the unemployed increased by 63% compared to those in continuing employment, with the association supporting a causal link from unemployment to higher mortality (Roelfs et al, 2011).

This is also a challenge since in 2016, 388,936 people in Scotland (11.1% of the working-age population) were claiming key out of work benefits.  More than two-thirds (272,330) were claiming Employment Support Allowance (ESA), a long-term sickness benefit paid to working-age adults whose health problems limit their capacity to work and the limitation means it is not reasonable to require them to work.  There are three categories of ESA claimants: those in the assessment phase, those in the Work Related Activity Group (WRAG) and those in the support group.

However, jobs which increase the risks of physical or mental harm to workers, or which expose working-age people and their families to in-work poverty, are also damaging to health. Before housing costs, 320,000 Scottish working-age adults in employment were in in-work poverty in 2015/16. The European Work Conditions Survey (EWCS) has also estimated that in 2010, one third of people in employment in the UK worked in occupations with multiple disadvantages, characterised by a lack of control and managerial support, poor earnings and prospects (including access to training).

The chance to work is not distributed randomly across the population, but is lower among certain groups (the young, the unskilled and those with significant health problems or caring responsibilities), in certain places (deprived communities and older industrial regions) as well as during recessions and periods of weak growth.   

This section will present a range of illustrative data on levels, trends and patterns in income and employment within Scotland, while the Key data sources page provides links to related information on other websites. Given the breadth of this area, there are related pages in other parts of this site, including Deprivation. Note too that the Informing Investment to reduce health Inequalities (III) tool on this website provides evidence on the health impacts of a range of income interventions and changes in employment.