Low income by work status

Graphs on this page:

Supporting information:

Key points

  • Unless all adults in the family are working (and at least one of them full time), the risks of being in low income are substantial.  For example, in the three years to 2008/09, the risks of low income among working-age adults were: 60% for unemployed families; 45% for economically inactive families; and around 20% for both the self-employed and those with some paid work.
  • For all bar family work statuses, the rates of low income in Northern Ireland are somewhat lower than the rates for the comparable group in Great Britain.  The biggest difference is the ‘workless – economically inactive’ group (largely sick, disabled and lone parents), where Northern Ireland’s 45% rate compares with a Great Britain rate of 55%.  Since this group of people accounts for a substantial proportion of the working-age low income in Northern Ireland, it is clear that this lower rate makes an appreciable difference to the overall low income rates.
  • Half of all working-age adults in low income have someone in their family who is in paid work.
  • A further two-fifths are in ‘workless – economically inactive’ families, with only one in ten being in ‘workless – unemployed’ families.  Note that these proportions are up to 2008/09 and are therefore prior to the recession.

Definitions and data sources

In all the graphs, ‘pensioner families’ (i.e. those where at least one of the adults is of pensionable age) are excluded from the analysis.

The first graph shows the risk of a working-age person being in a low-income household, with the data shown separately for the following family work statuses: all-working (single or couple, with one in full-time work and the other – if applicable – in full-time or part-time work); part-working (couples where one is working and the other is not plus singles or couples where no one is working full-time but one or more are working part-time); self-employed (head or spouse self-employed); workless – unemployed (head or spouse unemployed) and workless – economically inactive (includes long-term sick/disabled and lone parents).  For comparison purposes, the equivalent data for Great Britain is also presented.

The second graph shows a breakdown of the low income working-age people by family work status.  The self-employed are included in the ‘part-working’ category as their risks of low income are similar, and much higher than the ‘all-working’ category.

The data source for both graphs is Households Below Average Income, based on the Family Resources Survey (FRS).  Income is disposable household income after deducting housing costs and the low-income threshold is the same as that used elsewhere, namely 60% of British contemporary median household income.  All the data is equivalised (adjusted) to account for differences in household size and composition.  Note that in 2007 DWP made some technical changes to how it adjusted household income for household composition (including retrospective changes) and, as a result, the data is slightly different than previously published figures.  The averaging over three-year bands has been done to improve the statistical reliability of the results.

The term ‘family’ is used to cover an adult and their spouse (if applicable) whereas the term ‘household’ is used to cover everyone living in a dwelling.  So, a young adult living with their parents would count as one ‘household’ but two ‘families’.  In analysing the rates of low income by work status, the work status is analysed by family whereas the income is analysed by household.  This is the main reason why the low income rates for workless families is much less than 100 per cent.  Note that an alternative – and more technically correct – term for ‘family’ is ‘benefit unit’.  For a more detailed discussion of this issue, see the page on households, families and benefit units.  Note that families where at least one of the adults is of pensionable age are excluded from the analysis.

Overall adequacy of the indicator: medium.  The FRS is a well-established annual government survey designed to be representative of the population as a whole and the Northern Ireland sample has been boosted to improve sample sizes.  However, the Northern Irish sample is a recent addition to the survey and is yet to be fully quality assured by the Department of Work and Pensions.