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Issue 4, July 1999, pp.12-14.

Longterm illness: studying social consequences and policy impacts
Bo Burström, Margaret Whitehead and Finn Diderichsen

Background to the project
This Anglo-Swedish project, co-funded by the ESRC Health Variations Programme and by Swedish research grants, has the overall aim of exploring the impact of social welfare policies on inequalities in health in Britain and Sweden. A cross-country comparison was designed to make use of 'natural policy experiments' in which contrasting policies were being pursued in the two countries as they sought to deal with changing patterns of employment and family life. Two population groups were selected for whom the functioning of the social welfare system was considered particularly important: lone parents and people at risk of and experiencing unemployment. This article focuses on one of our studies of people at risk of unemployment and focuses on how people with chronic illness fare in the two countries.

Dropping out of employment
Unemployment is a serious problem for many industrialised countries, and has been for the past 20 years. There has been a rising trend in the number of people unemployed in the countries of the OECD - remaining fairly stable at around 10 million from 1950 to 1974, but then increasing dramatically after the first oil crisis in 1974 and again after the second crisis in 1979, to stand at more than 30 million by the mid-1990s.(1) The level has remained stubbornly high in many countries, and has not settled back to its original level after each peak. Within the industrialised world, European countries have been hardest hit: the unemployment rate in the EU has risen from less than 3% in the early 1970s to around 11% by the mid-1990s.(2) The European Commission acknowledges that 'unemployment remains the major economic and social problem confronting the Union.'(3)

Because the rise in unemployment is linked to the collapse in demand for unskilled labour across the industrialised world, the effect has been much greater in the industrial sector and has hit manual workers with less skill and education the most.(4) At the same time, economic inactivity among men of working age has been rising across Europe, adding to the proportion of men who are not in employment for one reason or another. Neither Sweden nor Britain has escaped the influence of these macro-economic developments. Both have experienced increases in male economic inactivity and both have seen unemployment rise, though in different periods (see Figure 1).

Figure 1: Unemployment rate, population aged 16 years and over, England and Sweden 1961-1995
Figure 1

In Sweden unemployment rates have traditionally been very low in comparison with other Western countries ever since World War II. At the end of the 1980s, workforce participation rates were at their highest. The economic crisis at the beginning of the 1990s, however, interrupted this favourable long-term trend and unemployment rates increased sharply from less than 2% to over 8%, accompanied by a 10% reduction in total employment.(5) In Britain, a rapid growth in unemployment was experienced between 1979 to 1985, followed by a fall and then another peak in 1991, before starting to decline again after 1993.(6)

The fate of people with chronic illness
It could be predicted that these adverse trends would hit people with chronic illness even harder, as they are likely to fare badly compared to healthier workers in any competition to get and to keep jobs. Mel Bartley and Charlie Owen have shown that this is indeed the case in Britain. Furthermore, they concluded that socio-economic status makes a large difference to the impact of illness on the ability to remain in paid employment, and that this impact increases as unemployment rises.7

Policy influences
How people with chronic illness fare in the labour market depends on several factors, including macro-economic developments, but also on labour and social policy measures which may vary between countries.

Sweden has one of the most regulated labour markets in Europe: Britain has one of the least regulated. In addition, Sweden has launched active retraining and rehabilitation programmes to help unemployed people with chronic illnesses get back to work, as a part of its commitment to state support and welfare provision. Retraining and rehabilitation are seen as one potential way in which the health sector can help to tackle the continuing rise in the proportion of the population classed as permanently sick.

In recent years, there has been a two-way traffic between Britain and Sweden in ideas and political debate about possible policy solutions to these pressing problems. British policy-makers have been attracted to Sweden's regulated labour market and associated social and health policies, seeing them as providing greater security of employment for older workers and for people with chronic illness. In turn, some Swedish commentators have been attracted to Britain's more flexible, deregulated labour market, seeing it as offering better employment opportunities for unskilled workers and for those with chronic illness. Two contrasting hypotheses may be formulated in this context:

1. that the more flexible, deregulated labour market in Britain would result in higher employment rates than in Sweden, for those with and without limiting long- standing illness;

2. that, because of active labour market measures and associated policies, people with limiting long-standing illness would have a stronger attachment to the labour market in Sweden than in Britain, even during periods of reduced demand for labour.

Figure 2: Employment rates among men aged 25-29 years with and without limiting longstanding illness (LLSI), by socio-economic group, Sweden 1992-1995
Figure 2

Studying social consequences and policy impacts
To explore these hypotheses, we compared the social consequences in terms of attachment to the labour market (employment, unemployment and economic inactivity rates) among people with and without limiting long-standing illness in different socio-economic groups in Britain and Sweden during the period 1979-1995. Empirical analysis of the British General Household Survey (GHS) and the Swedish Survey of Living Conditions (ULF) was carried out, together with an assessment of the Swedish policy experiments on rehabilitation carried out in the 1990s and their potential role in helping different groups back into work. As the patterns and policy impacts were likely to differ by gender, separate analyses were carried out for women and for men.

Figure 3: Employment rates among men aged 25-29 years with and without limiting longstanding illness (LLSI), by socio-economic group, Britain 1992-1995
Figure 3

Figures 2 and 3 illustrate some of our findings in relation to employment for men with and without limiting longstanding illness (LLSI), during the early 1990s when the overall unemployment rates were at similar levels in the two countries. During this period, Sweden had higher levels of employment than Britain for both healthy and sick men. Furthermore, the figures illustrate that Sweden had smaller socio-economic differentials in employment rates than Britain: ranging from 87% of Swedish men with LLSI in professional and managerial occupations to 75% for less skilled manual workers. In comparison, the differential in employment rates for British men with LLSI ranged from 75% for professionals and managers to 40% for less skilled manual workers.

Conclusions
These and further findings from our study lend no support to the first hypothesis: there would appear to be no benefit for Sweden in copying British de-regulation policies in terms of opportunities for people with LLSI to get and to keep jobs. In relation to the second hypothesis, we then asked what had the Swedish policy experiments on rehabilitation to offer in terms of lessons for Britain and other countries? We are currently exploring this issue and our evaluations of these experiments indicate both positive and negative impacts, and highlight above all the importance of taking account of the wider macro-economic and policy context in which specific initiatives take place.

Bo Burström and Finn Diderichsen are based at the Department of Public Health Sciences, Karolinska Institute, Stockholm.
Margaret Whitehead was based at the King's Fund, London for the duration of this project and is now Professor of Public Health at the Department of Public Health, University of Liverpool.

References:
1. OECD (1994) The OECD Jobs Study, Paris : Organisation of Economic Co-operation and Development.
2. Martin, R. (1998) 'Regional dimensions of Europe's unemployment crisis' in P. Lawless, R. Martin and S. Hardy (eds.) Unemployment and Social Exclusion: Regional Policy and Development 13, London : Regional Studies Association.
3. European Commission (1995) Employment in Europe, Luxembourg : European Commission.
4. Nickell, S. and Bell, B. (1995) 'The collapse in demand for the unskilled and unemployment across the OECD' in A. Glyn and K. Mayhew (eds.) Oxford Review of Economic Policy, II (I) Unemployment pp.40-62.
5. Statistical Yearbook of Sweden (1995) Stockholm : Statistiska centralbyran, 1994.
6. Office for National Statistics (various years) Regional Trends, London : The Stationery Office.
7. Bartley, M. and Owen, C. (1997) 'Relation between socio-economic status, employment, and health during economic change, 1973-1993' British Medical Journal, 313 pp.445-449.