Yesterday the Resolution Foundation launched their Briefing Paper – Class of 2020 – Education leavers in the current crisis. The paper looks at the impact of the Coronavirus on those young people who are leaving education this year. The paper uses evidence from the 2008/9 recession to predict the challenges facing young people this year.
Education leavers are the hardest hit, both in terms of the volume affected but also the impact and the long-term scarring effects unemployment has on those newly leaving the education system.
Data from the 2008/9 recession shows that those young people who left education during the downtown were at greater risk in the short and long term of being affected by the recession. More so those young people who did not go to university and left education after compulsory leaving age. Graduates were affected but in slightly different ways, they were more likely to work in unskilled jobs and experience lower pay than their counterparts who left outside of any recession.
This Resolution Foundation Briefing Paper focuses on those leaving education this year and uses OBR data to predict the employment and pay scarring effects of the Coronavirus Crisis on this cohort.
Startlingly, the findings identify that for young people leaving education with with mid-level (some higher education or an A level equivalent education) and lower-level (GCSE-equivalent or below) qualifications are three times more likely to to face reduced employment opportunities not just in the here and now but for years to come. This is also true for their pay prospects, lower-skilled young people will experience poor pay and development opportunities.
Whilst graduates will also be adversely affected the impact is likely to be less than it is for lower-skilled young adults. Although, what is harder to predict is that unlike with the global recession, Coronavirus will adversely affect some specific sectors such as hospitality, leisure and retail. These are sectors that have significant young workforce’s and so the impact of the closure of some of these sectors will again be felt greatest by young people, including graduates.
The impending recession may sway young people to stay on in education, in the hope that delaying their exit into the labour market will provide greater opportunities down the line.
This is something we are already hearing about at Youth Employment UK where young people are sharing with us their decision to stay on to complete Masters or a further year in education to protect themselves from the damaged labour market.
But making this choice will also bring with it challenges according to the Resolution Foundation:
- Those young people considering apprenticeships may find that there are not the options available to them as there were pre-crisis
- Those who choose to move on to a University education may now find it is too late to apply for the Autumn term
- Those choosing to study in FE may find the financial burden too great as unlike HE students will not be entitled to any education grants
These challenges are the focus of the Resolutions recommendations to government calling for:
- Any spare capacity in HE (due to fall of international students) should be prioritised and made available
- Creation of an education leaver innovation fund so that schools, colleges and universities can identify new and creative ways to support this years educations leavers with additional IAG, Work Experience and other services
- Develop a job guarantee programme under which public and private sector employers offer temporary paid jobs to unemployed young adults, with the government covering the wage cost
- Protect apprenticeship opportunities for young people
We are very concerned about the impact Covid-19 will have on young people, it is one of the reasons we co-founded the Youth Employment Group with partners Impetus, Youth Futures Foundations, Princes Trust and IES. Within this work we are looking at research such as this from the Resolution Foundation and others to develop some clear policy recommendations for the government to help mitigate the potential youth unemployment crisis.
Youth Employment UK agrees to the key findings and recommendations of this briefing and would add the need for the government to look at further stimulating the employment market and ensuring that there is a razor like focus on economic growth and quality employment opportunities.
We are working closely with our network of Youth Friendly Employers to ensure that young people are being supported as much as possible, including workforce development planning, education outreach and ongoing support.