New report: economic recovery “unlikely to solve the problem of youth unemployment in the UK”

David Kingman reports on the findings of new some research which highlights the UK’s stubborn problem with youth unemploymentUnemployed young person

Even a “full-blown” economic recovery would be “unlikely to solve the problem of youth unemployment in the UK,” according to the findings of a new report from the think tank the Institute for Public Policy Research.

The scale of the challenge

The report, which is entitled Remember the young ones: improving career opportunities for Britain’s young people, draws attention to the scale of youth unemployment in the UK.

Although the overall level of unemployment has been falling steadily as Britain’s economy has improved – total unemployment is now just over two million, according to the latest figures – the IPPR report argues that a substantial number of young people remain trapped outside the world of work, many for long periods of time.

The IPPR argues that unemployment among 16–24 year olds now stands at 868,000 (although official figures give a total of 767,000). Although both sources agree that the number has been falling, this masks a pair of concerning trends. First, there is still a wide gap between the rates of adult and youth unemployment. That figure of two million unemployed equates to 6.4% of the total workforce, whereas the share of 16–24 year olds who are out of work is still around 18%, or nearly one in five.

Secondly, the IPPR report also emphasises that there appears to be a particular group of young people among whom unemployment has become a long-term problem. Among the 868,000 young people who they say are unemployed, nearly a third have been looking for work for over a year without enjoying any success. Around 700,000 young people who would like a job have never managed to find one.

The future prospects of these young people who are trapped outside the labour market seem grim. As the report emphasises, there is a large body of research that shows how suffering a period of unemployment near the beginning of your working life can have a long-term “scarring” effect on your future earnings potential. It also means that they will miss out on valuable years of making contributions to National Insurance and auto-enrolment pension schemes. Under the worst case scenario, this could lead to a lifetime of low paid work followed by penury in old age.

Vocational training – the answer?

The report makes a number of recommendations for policy interventions which could specifically help to improve the labour market outcomes of this group of young people. The authors argue that they face particular challenges which suggest that a general economic recovery will not be enough to help them access the world of work on its own.

Like many other commentators on youth unemployment in Britain, one theme they particularly emphasise is the relatively weak level of support that Britain’s education system currently provides for young people who would be better served by following a vocational, rather than an academic, route.

They argue that apprenticeships and vocational training need to be held in much higher esteem by employers and wider society than they are at the moment, which would involve giving businesses much more input into how they are designed and implemented. The authors believe that Britain could learn a lot from certain other European countries where levels of youth unemployment are much lower, such as Germany and the Netherlands, about how to smooth the transition that young people make via vocational training routes into the world of work.

Tony Dolphin, IPPR chief economist, gave the following quote to the BBC:

“A strong workplace-based vocational education and training system, with high employer involvement, contributes more to a smoother transition from education to work and a low rate of youth unemployment than anything else.”