Youth unemployment falls but the NEETs remain.

UK Labour market data released this week, for Nov- Jan 2022, shows UK unemployment estimated at 3.9%, 0.2 percentage points lower than the previous three-month period, and returning to pre-coronavirus pandemic levels. There are now nearly as many vacancies as there are people unemployed (1.34 million).  But the UK economic inactivity rate is estimated at 21.3%, 0.1 percentage points higher than the previous quarter, and 1.1 percentage point higher than before the coronavirus pandemic, with economic inactivity for older people continuing to rise, due to ill health and retirement.

During the pandemic, increased participation in education helped to avert an unemployment crisis for young people, with joblessness peaking at 15% – well below the levels of the 2008/9 recession. At 9.7% it’s now falling back to pre-pandemic levels from 13.5% a year ago.  But most of this fall can be explained by falls in student unemployment – down from 16.2% a year ago, to 11% now. Campuses (which generate hundreds of part-time job opportunities) have reopened while employers, particularly in the hospitality and leisure sectors are being forced to rely more on students, as Eastern European labour has returned home.  The proportion of young people not in full-time education or work has fallen back from its peak of around 16% at the start of the crisis, but there remain more than one in eight young people neither in full-time education nor work, and there are now more men than women in this category.

These young people are generally referred to as NEET. As the Department for Education chart below shows, while NEET totals for England have fallen since the financial crash and the increase in the participation (school leaving) age, they remain only marginally lower than when data was first compiled. Youth unemployment may be falling, but the NEETs remain.

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