The Government has been accused of "flying blind" on the damage being caused to the labour market by its public sector cuts.
The Work Foundation also warned that job losses could be leaving important areas with a shortage of skilled and experienced workers.
The research group said the coalition had "very little knowledge" of the impact of cuts in areas such as the police, NHS, education and social services, which it suggested were on a scale not previously seen in this country.
Ministers were urged to start monitoring the impact of job losses so that any problems could be tackled.
The report said many of those leaving the public sector were not finding new jobs.
Ian Brinkley, director of The Work Foundation, said: "The Government has some major blind spots around the impact of its public sector workforce cuts. These cuts are progressing at a rate not yet seen in the UK.
"However, the Government appears to have little knowledge of what this is doing to the labour market or the skills and experience of the public sector workforce.
"So far there has been little evidence they are driving significant changes in the way public services are being delivered, although recent events at the Department for Transport could be indicative of a wider problem.
"Our analysis of previous public sector cuts shows that the UK labour market is capable of absorbing large-scale reductions in the public sector workforce without high levels of unemployment, but only if there is strong and sustained private sector jobs growth."
More than 400,000 public sector jobs have been lost since the coalition came to power.