Not working

In recent decades, the share of young people who are workless (by which we mean outside of either work or full-time education) has fallen. In 1995, over one-in-five (22 per cent) of young people aged 18-24 were workless; by 2021, this had fallen to 15 per cent. The scale of this improvement should not be overlooked: the total number of young people who are workless has fallen by 300,000, from 1.1 million to 800,000. This is particularly impressive given the turbulence of recent years, with youth worklessness recovering from both the financial crisis and the Covid-19 pandemic to reach record lows in 2021.
This good news has been almost entirely driven by young women. Of the 300,000 fall in youth worklessness between 1995 and 2021, 280,000 of this was among young women, while only 20,000 was among young men.

These improvements have occurred across young people from different ethnic backgrounds, but are most pronounced among young people from Black, Bangladeshi and Pakistani ethnic groups, with youth worklessness having fallen by 9 percentage points, 13 percentage points and 10 percentage points respectively between 2003-2005 and 2017-2019. Although young people from these groups are still more likely to be workless than young people from White and Indian ethnic groups, the ethnicity gap is much smaller than at the start of the century. Consistent with the overall reduction in youth worklessness, this improvement has been driven by young women: between 2003-2005 and 2017-2019, worklessness fell by 13 percentage points, 23 percentage points and 20 percentage points for young women from Black, Bangladeshi and Pakistani ethnic groups. For young men from Black and Bangladeshi ethnic groups, worklessness fell by just 5 percentage points, and there was no improvement for young men from the Pakistani ethnic group. Strikingly, worklessness among young White men actually increased, by 2 percentage points, over this period.

Not only has the total number of workless young people fallen in recent decades, but so has its make-up, and in ways that mean that some of the impacts of youth worklessness have worsened.

The dramatic fall in worklessness among young women, and slow progress among young men, is better understood when worklessness is broken into unemployment and inactivity. Unemployment rates for men and women decreased in tandem, but inactivity has been falling for young women (down 8 percentage points between 1995 and 2021, to reach 10 per cent) while it has been rising for young men (up 4 percentage points, to reach 9 per cent).
This shift in the make-up of youth worklessness means that prolonged worklessness among young men has increased, with the proportion of workless young men who are workless for more than a year rising from 56 per cent in 1995 to 70 per cent in 2021. This is because inactive young people are less likely to move into work or study than unemployed young people: 80 per cent of inactive young people remain workless for at least a year, compared to 56 per cent of unemployed young people. This means that the rise in inactivity among young men is contributing to the rise in prolonged worklessness among young men.

In recent decades there have been two main trends in economic inactivity among young people, and they are acting in opposite directions: a fall in inactivity among young mothers and a rise in inactivity among other young people.

The biggest change has been the decline in the number of young women who are economically inactive for family care reasons. Between 2006 and 2021, this number fell by 220,000, a fall of 78 per cent. There are two factors behind the falling inactivity among young mothers: young women are becoming less likely to have children, and young mothers are becoming more likely to be in employment. The falling birth rate among young women is the more significant factor: birth rates among young women have fallen dramatically since 1995, from 76 per 1,000 to 45 per 1,000 for women aged 20-24, and this accounts for four-fifths of the fall in worklessness among young mothers since 1996. At the same time, the proportion of young mothers aged 18-24 who are in employment has risen by 22 percentage points, from 30 per cent to 52 per cent between 1996 and 2021 (compared to a smaller increase of 13 percentage points for mothers aged 25-54).
Meanwhile, between 2006 and 2021, inactivity due to long-term health problems has been rising for young men and women. Inactivity due to long-term health problems rose by 45,000 for young men (to reach 91,000) and by 28,000 for young women (to reach 70,000). The sharpest increase has been in inactivity due to mental health problems. The number of young people in this category was small, at 18,000 for young men and 12,000 for young women in 2006, but has grown significantly between 2006 and 2021 to reach 37,000 and 23,000 (a rise of 103 per cent for young men and 84 per cent for young women).
Mental health problems are on the rise, and young people with mental health problems are more likely to become workless and remain workless for longer
Concerningly, young people who are inactive due to long-term sickness or disability have particularly high levels of mental health problems. In 2012-2019, two-thirds (65 per cent) of those who were inactive due to long-term sickness or disability had a mental health problem, compared to 29 per cent of full-time students and 23 per cent of those who were in employment.

While the factors associated with worklessness are complex, having a common mental disorder (CMD) (such as anxiety or depression), increases young people’s odds of moving from work or study into worklessness: 8 per cent of young people with a CMD moved into worklessness one year later, compared to 6 per cent of those without a CMD.

The effect of mental health problems on worklessness does not end after one year: among young people who become workless, half of those with a CMD remain workless for at least a year, compared to two-fifths of those without a CMD. This is a concern both because it will put upward pressure on the number of young people who are workless, and because it lowers young people’s odds of escaping worklessness and moving into work or study.
This link between mental health problems and worklessness is worrying, since both the frequency and severity of mental health problems among young people are on the rise. CMDs have been rising most rapidly since the mid-2010s, with rates of mental health problems being consistently higher among young women than young men. Between 1995 and 2018-2019, the proportion of young men aged 18-29 with a CMD increased from 16 per cent to 25 per cent, and for young women, from 30 per cent to 37 per cent. Among young people with a CMD, the average General Health Questionnaire (GHQ) score, in which a higher score indicates a greater level of mental health problems, has increased by 13 per cent for young women and 18 per cent for young men between 1995 and 2018-2019.

While increasing mental health problems among young people have been pushing up on worklessness rates in recent decades, the Covid-19 pandemic, by contrast, has had a relatively small impact. Thanks to the success of the furlough scheme, the spike in youth unemployment that was feared at the start of the pandemic has not transpired. In fact, by the end of 2021, youth worklessness reached a record low of 15 per cent.

And, although young people’s mental health deteriorated at the start of the pandemic, with half of young people aged 18-21 being classified as having a CMD in April 2020, rates of mental health problems recovered quickly as restrictions were eased in the summer of 2020.

Although youth worklessness is better than was feared at the start of the pandemic, problems relating to youth worklessness remain. The trends that existed before the pandemic – rising economic inactivity linked to rising mental health problems among young people – need to be addressed. On current trends, overall youth worklessness rates are likely to rise again from 2024 as rising inactivity due to health problems overtakes the fall in the number of young women who are inactive for family care reasons.

To push back on the risk of rising youth worklessness, policy makers will want to focus their efforts on strategies that reduce economic inactivity among young people, including those with mental health problems. Policy makers should think about how to offer support to young people who are hard to reach, such as those with significant health problems who may not present to jobcentres or local authorities. In addition, when designing support for young people with mental health problems, policy makers should learn from previous successes of integrating employment support with psychological support.