Constraint and Opportunity:Identifying Voluntary Non-Employment

This paper is an attempt to assess the extent to which the behaviour of anindividual is the result of the constraints that he or she faces – factorsbeyond individual control - or the result of the exercise of his or herpreferences. The study concentrates on participation or non-participationin employment, with non-participation defined broadly to include fulltimeeducation, caring or early retirement, as well as unemployment.Following a discussion of potential methodological difficulties, data fromthe British Household Panel Study are used to construct models of theprobability of being in employment, controlling for various constraints.Starting from the position that all non-employment is voluntary, possibleconstraints are introduced in layers corresponding to the degree to whichthey are regarded as beyond individual control. The layered approachallows for the fact that opinions vary as to what factors it is appropriateto regard as constraints. Predicted probabilities of being in employmentare then compared to each individual’s actual state. If the model predictsthat he or she has a high probability of being in work, and in fact he orshe is not, then there is a prima facie case that she or he is voluntarily outof work. However, since there may be unobserved constraints, theoutcome is cross-checked by starting from the opposite position, namelythat all non-employment is involuntary, then gradually subtracting thosefor whom there is evidence of having chosen to be out of work. Onlythose who are found not to face significant constraints and who state thatthey do not want work can with confidence be asserted to be voluntarilynon-employed. The results suggest that after taking into account as manyconstraints as possible, one-tenth of the non-employment in our sampleis unambiguously voluntary, with a further one-tenth beingindeterminate.[...]