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Living in a state of flux: how pay insecurity affects the choices and living standards of low income families

By Nuffield Foundation

Project overview

The nature of employment is changing. Secure, life-long employment is increasingly replaced by various forms of less traditional and often insecure work: temporary work, zero-hours contracts, self-employment, and the gig economy. The number of contracts that do not guarantee a minimum number of hours rose to 1.8 million in November 2017 while some five million workers are self-employed, many working in the ‘gig economy’. Even for workers on standard contracts pay can vary significantly due to bonuses, commission pay, shift work or overtime.

While pay volatility is not necessarily bad, we know from previous research that most people prefer income stability and the ability to budget and plan their finances ahead. Low earners are particularly likely to be negatively affected. They are both more likely to experience pay volatility and less likely to have savings that would allow them to cope with adverse income shocks. The social security safety net plays an important role by compensating workers when their pay temporarily falls. But certain features such as waiting times and assessment periods that do not fit with people’s circumstances can also exacerbate income volatility.

Has pay insecurity increased recently? How do people on low incomes cope and how might it affect people’s job search behaviour? How might we design experiments to test the link between earnings insecurity and people’s decisions to look for and stay in work? What role do employment and welfare policies play in addressing pay insecurity and what role might they play? These and other related questions will be addressed at an event hosted by the Nuffield Foundation. Researchers from the University of Essex, University of Oxford and the Resolution Foundation will present their work on pay insecurity followed by a panel discussion.

  1. Risk aversion, earnings uncertainty and labour supply
    Dr Silvia Avram, Institute for Social and Economic Research, University of Essex

  2. The Zero Hours Contract 
    Abi Adams, Department of Economics, University of Oxford


  • Dr Silvia Avram
    Institute for Social and Economic Research, University of Essex
  • Dan Tomlinson
    Resolution Foundation
  • Paul Gregg
    Resolution Foundation
  • Abi Adams
    University of Oxford
  • Location
  • Nuffield Foundation
  • 28 Bedford Square
  • England
  • WC1B 3JS
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We improve people’s lives by funding research that informs social policy, primarily in EducationWelfare and Justice. We also fund student programmes that give young people skills and confidence in science and research.

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