Guest blog – Disability Employment in Scotland: Initial Findings

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This guest blog is from the Fraser of Allander Institute, working with SPICe on an academic fellowship to explore the disability employment gap in Scotland. The authors are Allison Catalano, economist , and Chirsty McFadyen, Knowledge Exchange Associate. As with all guest blogs, what follows are the views of the authors and not those of SPICe or indeed the Scottish Parliament.

Introduction

Disabled adults are significantly less likely to be in work compared to adults without disabilities. In Scotland, 81% of working aged adults without disabilities had jobs in 2021, compared to just under 50% of adults with disabilities. This discrepancy of 31 percentage points – called the “employment gap” – is larger in Scotland compared to the UK (Chart 1).  The Scottish Government set  a goal of reducing the employment gap by half between 2016 and 2038. The 2021 numbers, encouragingly, show an improvement of six percentage points. A higher proportion of disabled people moved into work in Scotland between 2014 and 2021 compared to the UK as a whole as well.

In 2023, the Department for Work and Pensions (DWP) published a report on the state of disability employment in the UK. This report looked at the reason why employment among people with disabilities increased, while employment for the rest of the population stayed roughly the same.

The DWP report highlighted four reasons behind the growth in the number of disabled people in employment:

1. Disability prevalence has increased in the UK, and the most common types of disabilities have changed.
2. The non-disabled employment rate has increased, implying that more jobs are available to both groups.
3. The disability employment gap has been narrowing overall.
4. There are more individuals in the working-age population.

Disability prevalence, in particular, is thought to have contributed to the employment of just under 300,000 people in the UK. As of 2022, around 22% of the UK-wide working-age population is classed as disabled, which has grown from 17% in 2013. Increases in mental health conditions – particularly depression and anxiety – have contributed to the growth in disability prevalence.

There is a notable gap in this analysis, however – Scotland has a very different health and policy landscape and it’s likely that there will be a different relationship between work and disability.

This leads to several questions:

1. What is the state of disability employment in Scotland, and how does it differ from the rest of the UK?
2. What has changed in Scotland in the policy space for disability employment?
3. Where are there gaps in our knowledge about disability employment in Scotland?

Our upcoming research project will seek to understand why Scotland has seen this dramatic increase in disability employment. In the meantime, this blog article sets the scene about the scale of the issue in Scotland and the UK based on what we know from data currently available.

The Scottish Parliament’s Economy and Fair Work Committee held an inquiry into the disability employment gap earlier this year. The Committee heard that progress has been made towards the Scottish Government’s target of halving the gap by 2038, but that there is a lack of clarity on exactly what has driven the reduction. Progress has been inconsistent across different groups of the disabled workforce and across different geographical regions.

Following the inquiry, the Convener issued a letter to the Cabinet Secretary for Wellbeing Economy, Fair Work and Energy, and received a response in May 2023, and the Committee intends to return to the issue at a later date.

What’s the state of disability employment in Scotland?

Scotland has a higher proportion of working-aged disabled people compared to the UK as a whole. It also has a lower rate of employment among disabled people, and a larger gap in employment between people with and without disabilities. Employment rates are noticeably different for different types of disabilities in Scotland compared to the UK, and disabled people are less likely to have educational qualifications in Scotland.

How is disability defined?

The current definition used in UK (and Scottish) surveys comes from the Government Statistical Service and the 2010 Equality Act. This definition started being used on surveys beginning in mid-2013, meaning that it’s not possible to compare current data to data before 2013. Our analysis therefore looks at 2014 and beyond.

This definition covers people who report:

“current physical or mental health conditions of illnesses lasting or expected to last 12 months or more; and that these conditions or illnesses reduce their ability to carry out day-to-day activities.”

Previously, the definition was based on the Disability Discrimination Act (2005) (DDA), which applied to “all people with a long term health problem or disability that limits their day-to-day activities.” The slight difference in these terms means that some people may qualify as DDA disabled but not as Equality Act disabled.

Scotland consistently has a higher proportion of working-aged disabled people.

In 2014, around 18% of the Scottish working-age population were classified as Equality Act disabled.

Since 2014, the number of disabled people has grown by around 222,000 people, making up over 24% of the working-age population as of 2021 (Chart 2a). By comparison, the total size of the working-age population only grew by around 31,000 people over the same time period.

 Scotland has a higher proportion of disabled people compared to the UK, and this population has increased at a faster rate in recent years. This may be due to issues with data collection around the pandemic, and may not persist (Chart 2b).

Scotland has a higher disability gap and a lower rate of employment among disabled people

Employment rates for working-aged people without disabilities in Scotland are roughly the same as in the rest of the UK. Employment rates for disabled people are much lower, however.  

Since 2014, disabled people moved into work faster in Scotland compared to the rest of the UK. The employment gap fell by around 6.5 percentage points between 2014 and 2021 in Scotland, compared to a fall of around 4.5 percentage points for the entire UK (Chart 3).

Scotland has different employment rates for people with different types of disabilities.

Unsurprisingly, Scotland has lower employment rates than the UK as a whole for the vast majority of types of disability.

The largest differences in employment rates are for people with diabetes, chest or breathing problems, and difficulty with seeing, hearing, or speech. Scotland fares slightly better in the employment of people with issues relating to the stomach, liver, kidney, or to digestion (Chart 4).

Disabled people have lower qualification levels in Scotland.

Disabled people are more likely to have no qualifications than those without disabilities, both in Scotland and the UK. Scottish adults are also more likely to have no qualifications compared to the rest of the UK, although the gap in qualifications is larger for Scotland than for the rest of the country (Chart 5).

The proportion of people with no qualifications has also been falling in recent years. This may be due to a trend where older people are less likely to have formal qualifications, and as they move to retirement age, the number of people without qualifications goes down.

For disabled people, it may also be true that the increase in the number of disabled people have changed the make-up of the disabled population, especially for people who are becoming disabled later in life (for example, due to mental health issues that present post-education).

What has changed in the disability employment space over time?

Since 2013, Scottish policy has focused on improving the gap in employment between disabled and non-disabled workers. The work in the disability space from the Scottish government over the last ten years can be divided into two categories:

1. Laying out theoretical goals for improving work access among the disabled. This resulted in several important publications in this space, which highlighted some areas for opportunity in improving work outcomes for this population.

2. Changing funding and organisational structures for disability benefits and employability services. Most policy from 2013-2020 involved changing these structures rather than changing funding streams or volume.

A timeline of developments in these two areas is as follows:

2013

Keys to Life Strategy (publication): this mapped out goals on employability for people with learning disabilities.

2016

Scotland Act (policy): This act devolved social security to Scotland and allowed Scotland to develop new policies and benefits, including employability services.

Fairer Scotland for Disabled People (publication): This document stated Scotland’s goal of reducing the disability employment gap by half. It also extended the age limit on modern apprenticeships for disabled people and introduced work experience schemes and employability programmes.

2018

Fair Start Scotland (policy): This programme provides supported employment services in Scotland. 44% of FSS users are disabled.

Fairer Scotland for Disabled People: Employment Action Plan (publication): This publication outlines the Scottish government’s action plan for getting more people in work. In particular, it mentions Fair Start Scotland, No One Left Behind, and Keys to Life.

Social Security (Scotland) Act (policy): This policy lays out social security benefits set up by Scotland, which includes certain disability payments. Most payments began in 2020.

2019

No One Left Behind (policy): This programme is essentially a funding stream and an organisational structure that gives local authorities money for employability programmes. Local authorities then determine what programmes to fund and which demographics to focus on.

2020

Parental employability support fund (policy): This payment offers support to disabled parents or parents of disabled children to upskill or retrain.

2023

The Economy and Fair Work Committee hearings on disability employment (hearing): The Economy and Fair Work Committee in Scottish Parliament heard evidence on the employment of disabled people across two sessions in early 2023.

Where are there gaps in our knowledge?

As discussed at the start, publicly available data on disability types is severely limited. For example, survey data in Scotland has detailed disaggregation on different types of disability, but only publicly provides information on whether or not someone qualifies as disabled under the 2010 Equality Act definition. The Scottish Government has been making strides to improve this data, however – a 2023 publication analyses disability employment by type of disability, but only examines one year.

The main survey used to understand disability employment across the UK is the Labour Force Survey. This survey cannot be used to look at Scotland’s disability employment due to small sample sizes. Instead, we use the Annual Population Survey which asks a subset of the questions asked in the Labour Force Survey but has boosted sample sizes for Scotland. Scotland’s census is also useful for understanding disability employment.

Our next phase of research will look at how employment levels for people in Scotland living with different disabilities have changed since 2014 using secure data from the Annual Population Survey. With access to secure data, we will pull out analysis where sample sizes are large enough and highlight areas where they are too small to draw conclusions.

Allison Catalano and Chirsty McFadyen, September 2023

The cover image is Sherm and Aisha Akeju for Disabled And Here.