How serious, and how recent, is the problem of youth worklessness?

As mentioned in yesterday’s posts, globalisation and technological change led to an increased demand for technological skills across the OECD nations in the period 1977-1991, which in turn led to higher incomes for a tiny elite and a lesser reduction in incomes for the lowest skilled. With other changes (demographic, taxation, etc), this led to a rise in overall OECD household income inequality (as measured by Gini coefficients, which are not very revealing, but widely used).

 

Turning now to young people not in Employment, Education, nor training (the “NEETs”, or “workless”), this is a serious issue because early unemployment can lead to a lasting damage to personal income, and wellbeing, even over 35 years later (Blanchflower and Bell 2011).

 

The best statistics we have on unemployment by age (the ONS Labour Force Survey) only go back to 1992. That data shows an initial rate of 11.9% unemployed and not in education in 1993, dropping to 6% in May 2004 and rising again to 10% in 2011. Those figures exclude those not actively seeking work and also not in education, which in 2011 took the total up to almost 20% (see next link).

 

A TUC pamphlet on this topic (“Touchstone Extras #7. Generation Lost: Youth unemployment and the youth labour market”) uses various proxy measures to get a rough figure for earlier rates:

https://www.tuc.org.uk/economic-issues/touchstone-pamphlets

The raw number of young unemployed (by different measures) started in 1969 very low by current standards (0.03M?), went up sharply between 1975-77 (0.3M), before the recession that started in 1979–80 saw it rise to 1.25 million. It then fell at the end of the 1980s, but remained above all pre-1979 figures. The 1991–3 recession saw a further rise, but did not have as bad an effect on youth unemployment as the earlier recession.

 

Over the same period (1969-2011), ONS data tells me that the proportion of the population aged 16-24 has changed relatively little (12.3% to 12.0%, ranging from 14.0% in 1981 down to 10.6% in 2002). I shall thus ignore population change and stick to raw numbers.

 

Youth unemployment (and thus presumably youth worklessness) is not new, and is better than it was in the early 1980’s (when I graduated for the first time).

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