How do labour market frictions affect employees in the UK?

This paper offers the first individual-level measure of labour-market frictions among UK employees. Using survey data from over 4,000 employees, we operationalise three specific types of frictions (information frictions, skill frictions and geographic frictions), and construct a composite index (0–100) that captures frictions as a whole.

We estimate hierarchical linear models for the index and logistic models for each friction. Frictions are common but uneven, with difficulties finding local opportunities and time constraints being the most prevalent, and an average score of M=35.6. Lower pay consistently predicts higher odds across all frictions, and longer tenure raises information frictions.

Technology exposure is generally protective – especially regular exposure to digital ICTs and AI/ML software. Organisational factors appear as the strongest determinant of frictions: employee-centred HR, different types of training, and representative structures (including unions) are associated with significantly lower frictions. We found modest gender differences on the aggregate experience of frictions but a few notable gendered patterns in the effect of household, sectoral, and technology.

These results highlight the importance of material resources, digital inclusion, and organisational support in reducing barriers to labour market mobility.

‍