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What explains the growth in ‘never-worked’ households? Summary

“The number of homes where no one has ever worked has doubled in little more than a decade.” Government ministers and the press have often cited this statistic as evidence of a growing problem of welfare dependency in the 2000s. This research investigates what drove the substantial increase in ‘never-worked’ households between 1996 and 2005.

Key points
• Most never-worked households comprise lone parents and younger single people; this has not changed significantly since 1996. The phenomenon largely reflects life stages rather than being a persistent state.
• The increase in never-worked households did not appear to be driven primarily by changes in family structure, but by a greater proportion of these two key groups having never worked.
• The increase in the proportion of never-worked households in metropolitan areas – above all in Inner London, but also in some other big cities – was particularly notable.
• A substantial majority of never-worked households were white, UK-born and Christian/no religion. Never-worked households were highly concentrated in London and disproportionately likely to be of (non-EU) immigrant origin, non-white and/or Muslim. These were all highly correlated factors.
• More recent falls in never-worked households may have been partly driven by a drop in the number of single-person households comprising people who have never worked. This could reflect in part slower rates of formation of single-person households, combined with greater labour market participation among single parents.
• Explanations of the growth (or more recent falls) in the number of never-worked households which refer to a ‘culture of worklessness’ or ‘intergenerational worklessness’ are not consistent with the data.