The issue: Unequal employment/unemployment rates in neighbourhoods in the same labour markets

1. Do people from neighbourhoods with poor reputations face ‘postcode discrimination’ when looking for work? Paper presented to the 2012 Social Policy Association conference, Social Policy in an unequal world, University of York, 16th-18th July 2012 Rebecca Tunstall, CHP, Uni. of York; Anne Green, Inst. For Employment Research, University of Warwick; Ruth Lupton, CASE, LSE; Simon Watmough, European University Institute, Florence; Katie Bates, CASE, LSE.

2. The issue: Unequal employment/unemployment rates in neighbourhoods in the same labour markets

3. The hypothesis: Area reputations and ‘postcode discrimination’ Variations in neighbourhood reputations <- -> variations in employment within labour markets Explanations for variations: (Low demand for labour in whole TTWA neighbourhood is located in) Labour supply • Skills mismatches • Spatial mismatch within TTWAs (see Kain, 1968; Holzer, 1991; Houston, 2005) • Area/neighbourhood effects: - ‘Stigma’ one of 15 potential causal mechanisms for neighbourhood identified by Galster (2011) - ‘Postcode discrimination’ by employers in employment one potential consequence of stigma

4. Research methods • Review of literature • Case studies: 3 urban labour markets in England and Wales: ‘strong’, ‘medium’ and ‘weak’; 3 neighbourhoods in each area: one ‘bland reputation’, two with ‘poor’ reputations • Street interviews about neighbourhood reputations 4) Analysis of number of vacancies notified to Jobcentre Plus (on direct.gov.uk) and competition in each area, for different preferences and constraints Focus on jobs requiring limited education and skills: Sales assistants, security guards, cleaners, office admin, accounts clerks, kitchen hands and chefs

5. 5) Street survey of job ads 6) Interviews: 14 relevant employers, 11 intermediaries 57 young people – almost all job seeking, all with limited education and skills, and most with other disadvantages 7) Experiment: Fictional CVs for ‘promising’ young people purporting to live in the 3 neighbourhoods, used to apply to 667 real vacancies requiring limited education and skills.

6. Evidence to date Numerous allegations by job applicants/neighbourhood residents/those who work with residents of ‘postcode discrimination’ in employment - - from the UK: (eg. Power and Tunstall, 1995; Lawless and Smith, 1998; Social Exclusion Unit, 1998; Taylor 1998, Fieldhouse 1999, Roberts 1999; Dean and Hastings, 2000; Speak 2000, Mellor 2002; Hastings and Dean 2003; Taylor 2003; Aleksandraviciene et al., 2005, Dewson et al. 2005; Sanderson, 2006; Green and White, 2007; Fletcher, 2007, Fletcher et al. 2008) - from elsewhere eg France (Waquant 1993, Recchia 2008), Australia (Atkinson and Jacobs, 2008), USA (Tilly et al., 2001). An resident’s report of an employer’s rejection: “It’s not you, we think you’d do the job fine . . . but if you live in Benwell, [Newcastle] you either know a villain or you are a villain …” (Speak, 2000 p??) 6

7. The case study labour markets Source: www.nomisweb.co.uk, accessed March, 2011; based on 2007 mid-year populations 7

8. The case study neighbourhoods 8 I

9. The experiment Include 667 real job vacancies: Advertised on www.direct.gov.uk, gumtree.co.uk and number of other employers and aggregator sites, Aug 2010-June 2011; In which the job site appeared to be within 15 miles of the centre of the 3 labour markets; Which did not require degrees, vocational qualifications or substantial experience (office admin, cleaner, security guard, sales assistant, accounts clerk, kitchen hand and chef); In which a main decision-maker appeared to be based in the local labour market; To which applications could be made via email, upload to website or post; Which did not appear to be offers of self employment; Covered the 1st stage of candidate selection up to interview or similar stage. 9

10. The experimental candidates were strong candidates Eg Office admin: 22-24 year old women. They had at least 5 GCSEs at grade C and above, which would have put them at least in the top half or two thirds of the cohort from the TTWAs, plus either A’ levels or a relevant post 16 vocational qualification. Starting with Saturday jobs while at school, they had 5 to 9 years’ work experience, depending on age and when they completed education. Their past jobs were mostly in office settings, with some retail work. They were in work when they applied. They had no breaks in employment, no criminal records and no stated caring responsibilities. If jobs required it, they had cars and clean driving licenses. They were seeking posts similar to ones they had held in the past. Where stated, the jobs offered pay between minimum wage of £5.93 an hour and about £10 an hour (or £10,000-20,000 per year).

11. Experiment results • 17% of applications received a 1st stage positive response (usually a request to attend interview/meeting) • 13% received a negative response • 69% received no response In 475 of the 667 jobs applied to, no candidates or all candidates received a 1st stage positive response In the remaining 192 jobs, employers expressed a preference for one or more candidates over the other/s

12. Did ‘poor reputation’ neighbourhood residents have worse chances?1st stage positive response rate, all 2,001 apps, 2010-11

13. 1st stage positive response rate, 192 cases where employer expressed preference out of 667 total, 2010-11

14. Discussion Slight net preference for candidates from areas with bland reputation Not statistically significant In this case, people living in neighbourhoods with poor reputations did not face ‘post code discrimination’ in the labour market ‘Postcode discrimination’ in employment might exist outside scope of experiment: less-well-qualified candidates, other jobs, face-to-face and phone applications; at interview stage of selection However, centralised selection and electronic application and response have reduced potential for postcode discrimination outside the scope of the experiment: “you can say you’re from anywhere” (22 year old man, weak labour market) 14

15. While other sources of evidence suggest phenomenon may exist, do not suggest it is large and salient neighbourhood effect 2/14 employers hinted at postcode preferences: “There are areas where you sort of think, hmm, you know, not too sure about that … where you have a large number of unemployed people, where you have council accommodation (medium labour market). “I am not going to be that prejudiced on areas… So you get ‘em in, and see what they’re like” (emphasis added)(strong labour market). 0/57 young job seekers reported beliefs/experience of ‘postcode discrimination’ 3/11 labour market intermediaries reported beliefs/experience of postcode discrimination And other factors than stigma produced much larger and statistically significant net differences between applicants These included a different causal process for neighbourhood effects, ‘spatial mismatch’ And individual characteristics of job seekers were probably dominant. 15

16. Eg. Early apps had considerably higher chances…1st stage positive response rate by days elapsed between advert and application, experiment, 2010-11

17. Some jobs offered considerably higher chances…1st stage positive response rate by job type, experiment, 2010-11

18. Stronger labour markets offered considerably higher chances…1st stage positive response rate by labour market, experiment, 2010-11

19. Spatial mismatch: Most low skilled vacancies were not ‘easily accessible’ to poor rep neighbourhoods Eg. Weak labour market

20. Travel to work considerations were important for most experiment jobs 76% of jobs applied to in experiment not 9am-5pm

21. Most job seekers were willing to consider travelling for work… “Well, my job search [part of JSA agreement] says an hour...” (22 year old woman, medium labour market) “An hour’s commute wouldn’t be an issue…. I think the furthest one I’ve applied for is… about two hours’ commute when you’re taking buses” (24 year old man, medium labour market) “Providing the money is decent enough to allow me to travel, I’ll go wherever you want.” (25 year old woman, medium local labour market).

22. And DWP expects travelling for work… In 2011, Job Seeker’s Agreements extended potential travel requirements from 60 to 90 minutes from job seekers’ homes (Freud, 2011) (This is atypical travel-to -work: In 2009, 79% of all workers travelled 30 minutes or less to work (outside London) (DFT 2011)). In 2001, 78% of 16-24 year olds in work in the case study ‘poor reputation’ neighbourhoods travelled 10km or less (ONS 2001)). 22

23. But many employers were not willing to consider travellers, and had overt preferences for workers from convenient neighbourhoods “[Distance] matters a lot.Someone close by is better” (employer, strong labour market) “[the main considerations are] previous employment history, qualifications, and travel-to-work” (employer, strong labour market) “We know from experience that it doesn’t work if people are too far away … so we try and place them within 5 miles” (intermediary, weak labour market) See also: Green et al. (1991); Zenou (2002), Lupton (2003) Nunn et al. (2010).

24. And there were skills mismatches: The young job seekers we interviewed were not strong candidates The 57 young people we interviewed were almost all currently out of work. They were in their early 20s. Many had no GCSEs; most had fewer than 5. Some had 5 to 10 years’ work experience, in roles like those in the experiment, but it was usually episodic and marked by redundancies and contract ends, with little progression. Some had voluntary experience. Many had almost no work experience, up to 10 years after leaving school. Many women had caring responsibilities. Many had criminal records. Some had health problems. Few had cars or clean driving licenses. Most came from neighbourhoods with poor reputations, including the ones in the experiment. They were seeking posts similar to those in the experiment.

25. Their experiences of competition “You send out all these applications and you never hear anything back, so you start thinking there’s no point sending any more off” (24 year old man, weak labour market) “Once you’ve been knocked back a few times it hurts your confidence as well so I think you end up applying less and less and less, until you’re not applying at all. It hurts your confidence if you hear nowt” (25 year old man, weak labour market) “I took my CV into [name of shop], they left it on the counter; the other worker who wasn’t a manager threw it in the bin, because people are trying to protect their own jobs, it’s dog-eat-dog at the moment.” (22 year old man, medium labour market)

26. Conclusion • In this case, people living in neighbourhoods with poor reputations did not face ‘post code discrimination’ in the labour market • ‘Postcode discrimination’ in employment might exist outside scope of experiment (and there may be forms of ‘postcode discrimination’ outside employment), but it seems unlikely to be a large and salient neighbourhood effect or explanation for variations. • We found overt employer discrimination between neighbourhoods by convenience, and strong circumstantial evidence for neighbourhood effects via spatial mismatch. • We also found strong circumstantial evidence for skills mismatches and the effects of poor individual skills and intense competition.

27. For more info: ‘The task for disadvantaged young job seekers: A job in itself?’ Publication Sept 2012 For any other info, please contact: Becky.tunstall@york.ac.uk Centre for Housing Policy, University of York