Short-term crisis - long-term problem? Addressing the youth employment challenge

a report by Neil Lee, Paul Sissons, Brhmie Balaram, Katy Jones and Nye Cominetti for The Work Foundation

Executive Summary

There are more than one million young people unemployed in the UK, representing a serious economic and social challenge. Unemployment while young can lead to long-term reductions in wages, increased chances of subsequent periods of unemployment, and poorer health outcomes. High levels of youth unemployment also have wider social and economic costs. The cost of youth unemployment over the next decade has been estimated at £28 billion.¹

Yet, while we should be concerned about all those who are unemployed while young, many of these young people are only unemployed for a relatively short period. The most difficult challenge for policy is addressing the problem of long-term youth unemployment – the 264,000 young people in this country who have been out of work for 12 months or longer. The longer a young person is removed from employment, education, or training, the worse the long-term consequences for the individual and the economy.

Government, business and the third sector needs to urgently consider this core group of long-term youth unemployed. This report – the first research report published as part of The Work Foundation’s Missing Million programme – focuses on the characteristics of this group and how policy can best be targeted at them. We do so through three research phases: an analysis of the characteristics of the long-term youth unemployed, a set of interviews with long-term unemployed young people to identify their problems, opinions and ideas to improve services, and a phase of policy mapping where we establish which interventions work best.

Young people who are long-term unemployed are more likely to be men, and are more likely to be poorly qualified. The rate of long-term youth unemployment has been rising for some time – but was exacerbated by the recession.

A significant proportion of the unemployed are not claiming benefit. Around a third of young people who are unemployed are not claiming unemployment benefit – this makes it harder for the government to reach them and help them into work.² It makes the role of the third sector vital in integrating these young people into the labour market.

Young people find it increasingly difficult to get an initial foothold in the labour market. Our interviews suggested the initial transition after leaving education or training was very difficult. Problems included a lack of qualifications and/or suitable skills. And, in the face of a double dip recession, there were often too few job opportunities for young people, particularly in deprived local economies.

Many young people were caught in a Catch 22 situation: they had no work experience, but needed this experience to demonstrate to employers they had the skills required for the world of work.

In contrast to media portrayals of young people, we found little evidence to suggest that young people have unrealistic expectations of the labour market. The young people we interviewed generally had job goals that were grounded in the type of vacancies most likely to be available locally.

Young people who are long-term unemployed are diverse in their distance from, and orientation to, the labour market. Some were committed jobseekers fully engaged in searching for work and desperate for an opportunity; others were more casual in their job search and exercised greater selectivity about what to apply for; a third group could be categorised as being harder to help, and often had multiple barriers to work.

While the introduction of the Youth Contract is a positive step, government policy for long-term youth unemployment remains inadequate to the scale of the challenge. The government needs to do more, and policy should focus on six key areas

1. Improving national coordination – we recommend establishing a new Youth Employment Unit to work across government departments. We also recommend that youth employment becomes a specified ministerial responsibility, that a national minister has this added to their portfolio with responsibility for co-ordinating policy between government departments, business and other stakeholders to facilitate long-term improvements in the transition from education to work for young people
2. Better local coordination – local services for young people are too often fragmented. More needs to be done locally to link these services. Key stakeholders in local areas need to work in partnership with each other, and with employers, to develop youth employment strategies to maximise opportunities for the long-term unemployed
3. Guaranteeing part-time jobs – the wage subsidy of the Youth Contract is to be welcomed, but it can be improved on – a part-time job guarantee for all long-term unemployed jobseekers has a number of clear advantages, in particular around having time to spend on jobsearch and the support to do this
4. Bring more young people into the employment support system – given the significant proportion of the young unemployed who are not claiming benefit more needs to be done to bring these young people into the system. The voluntary sector has an important role here and effective provision must be financially supported and ramped up
5. Addressing transport barriers – for some young jobseekers the cost of transport is a major barrier to work. Greater leverage should be used in contract and subsidy negotiations with transport providers to ensure this barrier is removed
6. Focusing on growth – the long-term solution is through greater employment growth which will enable the long-term unemployed to capitalise on the employability benefits of short-term schemes.

¹ ACEVO (2012) ‘Youth unemployment: the crisis we cannot afford’, London: ACEVO.
² Figure excludes full-time students.

Full text (PDF 50pp)

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