Modelling the economic benefits of the Employment Rights Bill
The government has conducted a cost benefit analysis of the Employment Rights Act but acknowledges this is incomplete because it is not able to monetise many of the wider benefits of the package.
Our analysis takes some of the benefits identified by government which have been left unquantified and produces quantitative estimates for them. This produces a central estimate for total benefits at £10.3 billion (ranging from £5.0 billion to £15.7 billion). The benefits include:
- Workplace stress: £487 million to £1.5 billion by reducing lost working days.
- Staff well-being: £310 million to £1.6 billion from improved well-being.
- Minimum wage compliance: £42 million to £293 million from better compliance.
- Strikes: £85 million to £256 million by resolving disputes.
- Industrial relations: £2.7bn to £8.1 billion from reduced conflict.
- Labour market participation: £1.3 billion to £4.0 billion by increasing employment for people looking after family or home.
The cumulative impact of even modest improvements would offset the costs of the package and stronger outcomes could generate even greater gains.
Howard Reed, Landman Economics and University of Northumbria
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