Building a resilient workforce for the future
Summary
The Youth Employment Index, produced in collaboration with the Youth Futures Foundation, provides an important tool to measure, benchmark and monitor progress across the OECD in employing and training young people. This is key to identifying challenges and opportunities in specific economies.
The report adopts a forward-looking approach, beyond the short-term disruptions of COVID-19, to anticipate how labour markets may evolve over the next decade in response to global megatrends. This helps inform effective action to enable our young people to realise their potential – through productive careers that will also benefit our future economy and society.
Youth Employment Index UK performance
The UK ranks 18th out of 38 countries in the OECD, and has continued to improve its Youth Employment Index score gradually. Its score of 51 is just above the OECD average and is mainly driven by a high relative youth employment rate. However, the UK could improve its index score through policies that lower its long-term youth unemployment rate (ranked 22nd) and increase the enrolment rate in education for 15 to 19 year olds (ranked 26th).
Economic opportunity
Tackling youth unemployment presents a major opportunity for countries to boost their GDP in the long-term. The UK’s NEET rate for 20 to 24 year olds is currently 14%, over 5 percentage points higher than Germany, which – as the best performing large country – is our benchmark country. We estimate that closing this gap would increase UK GDP by 1.8% in the long-term, or £38bn.
Results from our cross-country econometric analysis show that youth unemployment is highly persistent and countercyclical across the OECD. Lowering youth unemployment is associated with higher GDP growth, lower previous levels of youth unemployment, and higher employment of workers aged 55 to 64.
Tackling inequalities
We also find that existing trends in the UK labour market were exacerbated by the pandemic, widening existing inequalities affecting young people, especially from minority groups:
- The youth NEET rate varies widely across regions in the UK with the North East region seeing the highest NEET rate of 13.7%, and Scotland experiencing the lowest NEET rate of 5.7% in the same period.
- Over the pandemic, white people aged 18-25 saw the highest employment rate out of all ethnic groups at 68.5%. Young people of Chinese ethnicity have the highest full-time education participation rates.
- The pandemic has reduced the gap in NEET rates between young men and women. However, young women who are NEET in the UK are more likely to be economically inactive compared to young men (63% vs 51%).
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