Link between economic growth and youth unemployment is ‘broken’, says think tank

Anna Scott

Nearly one third of young people have been looking for a job for more than one year, and economic growth alone won’t get more 16 to 24-year-olds in the workforce, a report has suggested.

Despite the drop in the number of young people out of work by 9,000 to 965,000, according to the latest figures from the Office for National Statistics (see Vacancies and jobs up from this time last year, government says), the youth unemployment rate is 3.74 times that of the adult rate, the Institute of Public Policy Research said.

“In the UK, and across Europe, the labour market position of young people started to deteriorate many years before the financial crisis and subsequent recession,” said Spencer Thompson, research fellow at IPPR. “A return to economic growth will not, on its own, bring about a sustained fall in youth unemployment.

He said the position in the UK was particularly bad for young people, with countries that experienced a similar fall in GDP to that seen in the UK saw a less severe increase in youth unemployment.

The report shows that young people in the UK find a first job more quickly than in any other European country (other than Iceland), averaging around 4 months versus more than 8 months in Spain, Greece and Italy. But the report also shows that their transitions into work are riskier than in many other countries with the UK having an unemployment rate of around 20 per cent among young people who have left education, much higher than in the Netherlands, Germany, Denmark and Belgium.

“Tinkering with crisis-response policies like the Work Programme and the Youth Contract is not enough,” Thompson added. “Nor, on its own, is reforming the education system. We need to create much stronger links between education policy and labour market policy, particularly for those that do not go from school or college into university education.”

Thompson said that an all-encompassing system that provides pathways from school through to employment and stops young people from dropping out of the system is needed. This should include guarantees of quality vocational education and work experience.

“Countries such as Denmark and the Netherlands have created ‘earn or learn’ tracks for 18-45 year olds and taken them out of their adult welfare systems,” he added. “Britain should follow suit.”