Youth Employment Index 2022

PwC and the Youth Futures Foundation have collaborated on the launch of the Youth Employment Index. Its aim is to measure, monitor and and benchmark youth employment and the access to education and training.

You can read and download the full report here.

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%).

Developing policy responses

The research shows current policy is already leaving behind a subsection of young people who are unable to overcome barriers to education and employment and who are disengaged from the current system. A coherent and effective youth employment policy requires a coordinated long-term strategy across government departments.

Policies also need to be comprehensive, inclusive and adaptable. As society and technology evolves, so will the needs and aspirations of our youth and policy must support this. The young people we fail to reach today could feel the negative impacts for the rest of their lives, with the reverberations reaching every aspect of the UK economy.

Our recommendations for policymakers first focus on institutional change to deliver youth employment policy more effectively. This leads to four policy areas to achieve an integrated approach to holistic policies.

Institutional change

In this report we identify five key principles to improve the overall design and delivery of youth employment policy:

  • Promote better interdepartmental and regional cooperation;
  • Build a resilient policy-making approach;
  • Make policy-making more participatory;
  • Use an integrated approach to develop holistic policies;
  • Utilise emerging technology and big data for policy making.

Holistic policy

We also recommend a wide range of policy areas to support the development of adaptable, resilient skills, empower young people to find high-productivity, rewarding work and promote their well-being through times of significant change. Our report has developed thirteen separate policy proposals – including development of existing policy and novel policy suggestions. We categorised policy under four key areas to build a comprehensive youth policy strategy:

  1. Developing skills through investing in better vocational training, improving skills matching, encouraging a more flexible education system and increasing emphasis on place-based policies;
  2. Supporting people by providing proper career guidance and mentorship, promoting well-being in young people, and addressing inequality;
  3. Supporting incomes through improving social safety nets for young people, using targeted fiscal policy during economic downturns and supporting those negatively impacted by technological innovation;
  4. Shaping labour demand by investing in high productivity sectors, improving legal and regulatory protections for all workers and developing appropriate measures of job quality.

Discover Youth Friendly Employers

Email us at info@youthemployment.org.uk or call 01536 513388.

Early careers strategy support

Youth Employment UK Membership is a strategic step for organisations of all sizes who want support and recognition for their commitment to creating quality early career opportunities in line with Good Youth Employment Standards.

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As experts on youth employment and co-founders of the Youth Employment Group, we are ideally placed to understand the complex landscape facing young people, employers and policy makers.