Youth jobs in retreat: IFS warns Britain is sliding back to Covid-era lows

The share of 16- to 24-year-olds in payrolled employment has dropped by 4.3 percentage points since December 2022, reducing the number of young people by roughly 330,000. Payrolled employment for this age group is now 50.6%, down from 54.9% three years earlier. The decline is comparable in scale to past shocks, though without a clear headline trigger. NEET numbers have risen from 760,000 at the end of 2022 to about 960,000 by the end of last year, approaching one million. Early-career unemployment can cause lasting harm, including lower earnings, more job changes, delayed progression, reduced productivity, weaker tax receipts, and higher benefits.

"Fresh analysis from the IFS, published ahead of the latest Office for National Statistics labour market release, shows the share of 16- to 24-year-olds on a UK payroll has fallen by 4.3 percentage points since December 2022, a drop of roughly 330,000 young people. Payrolled employment in the age group now stands at 50.6 per cent, down from 54.9 per cent three years earlier."

"To put the scale in context, the Covid-19 shock pulled youth employment down by 6.5 points, and the 2008 financial crisis prised away 5.4 points relative to the pre-crisis trend. The current decline, in other words, is no longer a rounding error, it is approaching the territory of a full-blown labour market crisis, but without the obvious headline-grabbing trigger that accompanied the last two."

"The cohort has swelled from 760,000 at the end of 2022 to roughly 960,000 by the close of last year, closing in on the one-million mark that policymakers had long treated as a symbolic red line. A scarring effect that outlasts the slump"

""The fall in youth employment across the UK is likely to be setting off alarm bells among ministers, not least because we know that unemployment early in one's career can have lasting negative consequences," he said. That so-called "scarring effect" is well documented. Graduates and school leavers who enter the workforce during a downturn typically earn less, change jobs more often and reach senior pay grades later than peers who began in benign conditions. The hit is not just personal: lost productivity, weaker tax receipts and higher benefits"

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