Headline statistics on youth employment - and unemployment - give a snapshot of how people at the start of their careers are faring in the labour market.
But this is just one part of a complex story.
Young people’s experiences at this early stage have implications for their long-term prospects of work and pay. Youth employment outcomes also indicate how an economy is making use of its available talent, and its future workforce.
For example, young people who spend an extended period as ‘NEET’ (not in education, employment or training) in their early twenties are at increased risk of unemployment later on, as well as lower rates of pay and job security. They are also more likely to experience other kinds of social disadvantage, and poorer mental and physical health. Economies lose out as well, through reduced productivity and earnings.
The PWC Youth Employment Index uses a range of data to rank OECD nations on their youth employment performance. Overall the UK sits 18th out of 38 OECD members. This is due in part to an impressive rate of youth employment—the seventh-highest, with just over half of people aged 15-24 in work, alongside relatively low youth unemployment (at 13.3% of the age group, compared to 17.2% across the OECD.
However, a relatively high proportion of young people work part-time, which can indicate poor-quality or precarious employment. The gap between the youth and the adult employment rates is the second highest in the OECD. Young people are around four times as likely to be unemployed (as a percentage of their age group) as those aged 25 or above. The UK’s NEET rate is a little below the OECD average, but at 14% it has changed very little in twenty years (it stood at 15% in 2001, and has risen again following a dip during the pandemic). Over the same period, Germany’s NEET rate fell from 17% to 9%.
Within the UK, employment prospects for young people are not evenly distributed. Youth unemployment is substantially lower in Scotland, the North West and the South outside London than in other parts of the North, or in the capital. The NEET rate in the North East, the East and Wales is over 13%, compared to under 8% in the South East and Scotland. Rates of worklessness vary considerably between ethnic groups, while disabled young people face challenges in finding good quality work.
An overall trend is that youth employment is associated with the general health of an economy, however it may be different in the UK post-pandemic. It rises along with the employment rate for all age groups, especially—contrary to some popular narratives—with increases in employment for people aged 55-64. In addition, countries that consistently do well on a range of youth employment measures, or that have improved their ranking have a number of policy features in common.
Substantial investment in vocational education and training are a key example. In countries such as Germany and Switzerland, ‘dual apprenticeship’ systems smooth the transition from education to work for young people, letting them combine workplace experience and learning with relevant classroom instruction. These routes are well-established and resourced. In Germany around 500,000 new apprenticeship contracts are available each year, while in Switzerland two thirds of school leavers enroll in programmes of this type.
Education systems that are flexible and accessible, and that foster lifelong learning as well as early career skills, are important as a foundation for young people’s long-term earning and learning prospects. Young people also need the right support, advice, and guidance—including financial support that helps to remove barriers to training and work.
Effective ‘skills matching’ systems also help to connect young people to jobs, and to reduce skills gaps for employers. These frameworks depend on effective data collection and analysis to provide insights that are timely, relevant, and practical for learning providers and employers, as well as young people themselves. Germany and Singapore both use skills mapping to define skill categories and measure competencies.
Effective place-based policymaking facilitates both of these approaches. To have maximum impact, local leaders need devolved powers to make decisions that leverage regional strengths within the context of national industrial strategies and levelling up and develop policy in relation to local skills ecosystems. Co-operation and integration between the multiple departments and agencies that shape youth employment is vital. This could be in the form of co-located services in dedicated Youth Hubs, as is the case at Merseyside Youth Association. This must be in the wider context of integration between regions and between government and communities with a focus on what works.
Anna Round is head of research at Youth Futures Foundation
