Headlines: March 15th, 2011

The Chartered Institute of Personnel and Development has called for a more measured debate on youth unemployment in the light of its Work Audit report on official labour market statistics. The report shows that youth unemployment has been over estimated and fewer young people are unemployed. The Institute emphasises that the problem is severe, but argues that solutions should be sought in the light of the actual situation.

The Work Audit report shows that the UK clearly has a serious youth unemployment problem but severe difficulty is being felt by only a relative minority of young people and the current situation is not worse than ever before. The widespread perception that 1 in 5 16-24 year olds are unemployed is based on a narrow and somewhat misleading interpretation of official statistics while talk of a ‘lost generation’ of young jobless people is simplistic.

The report finds that the current scale of youth unemployment is only properly understood in the context of greatly increased participation in post-16 education in recent decades. This, plus the fact that almost 30% of young people classified as unemployed by the Office for National Statistics are in full-time education, distorts public perception of both the level and rate of youth unemployment. According to the Institute it is at present more accurate to say that 1 in 8 rather than 1 in 5 16-24 year olds are unemployed. The Institute is therefore calling on the ONS and the Department for Work and Pensions to issue a joint statement on the measurement of youth unemployment to help establish a better informed policy narrative on causes of and solutions to the problem.

Dr John Philpott, The Institute’s Chief Economic Adviser said “The conclusion that 1 in 8 young people are unemployed rather than the frequently cited but misleading figure of 1 in 5 provides no comfort to those without work. But a more realistic picture of the scale of the problem would help move the policy narrative beyond the simplistic ‘lost generation’ rhetoric. Aside from ensuring that fiscal and monetary policy are conducive to growth and job generation the principle policy focus should be on how best to reduce underlying structural youth unemployment which is probably close to the 9%-10% rate observed prior to the recession and likely to persist even when the demand for labour eventually picks up.”