Cutting youth NEET rate could save UK £38bn, research finds
Joe Lepper
Wednesday, April 6, 2022
The UK economy could be boosted by £38bn through improving the employment and training prospects of young people, according to economists.
A study into youth employment across Europe has found that if the UK could cut the current rate of 20- to 24-year-olds not in education, employment or training (NEET) by five percentage points it would create a £38bn a year increase in gross domestic product (GDP).
This would see the UK equal Germany, which has the third lowest NEET rate among 20- to 24-year-olds among 38 developed countries.
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The UK is currently ranked 18th out of 38 developed countries in terms of youth employment.
The research has been carried out by PwC and Youth Futures Foundation and found that the UK has improved over the last two years among the 38 OECD (Organisation for Economic Co-operation and Development) countries looked at.
However, the analysis warns that the growth of part time and insecure work in the UK “may affect young workers’ long-term prospects”.
PWC economist Freddie Martin said that young workers who were furloughed during the Covid pandemic “are returning to their jobs on fewer hours and lower pay”.
In addition, “young workers are more likely to be employed in temporary jobs and on zero hours contracts”, he warned.
A lack of coordinated support for NEET young people in the UK is among concerns raised by 24-year-old Youth Futures Foundation ambassador Lauren, who has been homeless and unemployed.
“The whole system needs to be changed so that young people, with similar backgrounds to me, receive long-term consistent support to move into good quality work and contribute to the economy,” she said.
Other improvements recommended in the report include using technology and data to improve policy around NEET rates and to involve young people in decision making.
"The prize from bettering outcomes for young people in the UK is large,” said Youth Futures Foundation impact and evidence director Chris Goulden, who added that “the waste of potential and impact on national wealth should be ample reason” to tackle youth unemployment”.
