Youth Labour Market in Scotland vs. the Rest of the UK
The latest data from the Office for National Statistics (ONS), covering the period from October 2023 to September 2024, provides valuable insights into the labour market for young people aged 16 to 24 across Scotland and the rest of the United Kingdom. The figures are sourced from the Annual Population Survey (APS), which offers a comprehensive view of employment, unemployment, and economic inactivity rates within this demographic. However, it is important to note that the APS estimates have been temporarily downgraded to 'official statistics in development' due to concerns over falling sample sizes and outdated population weighting methods.
Employment Rates
Scotland
The estimated employment rate for 16 to 24 year olds in Scotland was 55.9%, reflecting a decline of 1.0 percentage point from the previous year.
This translates to approximately 310,100 young people in employment, a decrease of 4,500 from the year before.
Compared to pre-pandemic levels (October 2018 to September 2019), the employment rate is down by 3.1 percentage points, indicating a sustained impact on youth employment.
United Kingdom
The UK-wide employment rate for this age group stood at 52.0%, which is 1.9 percentage points lower than a year ago.
The long-term trend shows a decrease of 2.2 percentage points since 2018-2019.
Scotland's youth employment rate remains higher than the UK average (55.9% vs 52.0%), demonstrating a relatively stronger labour market for young people in Scotland. This has been a consistent trend over the years, except for the period between 2019 and 2020. However, the continued decline in employment suggests underlying economic difficulties, such as changes in industrial demand and automation affecting entry-level job opportunities.
Unemployment Rates
Scotland
The estimated unemployment rate for young people in Scotland rose to 10.4%, an increase of 0.7 percentage points over the year.
The total number of unemployed individuals in this age group reached 36,100, marking a rise of 2,300 from the previous year.
Compared to pre-pandemic levels, the rate is 1.3 percentage points higher.
United Kingdom
Across the UK, the youth unemployment rate was slightly higher at 11.4%, reflecting an annual increase of 0.7 percentage points.
The unemployment rate in the UK remains unchanged from 2018-2019.
Scotland's youth unemployment rate is lower than the UK average (10.4% vs 11.4%), which suggests that young Scots have relatively better job prospects compared to their counterparts in the rest of the UK. Despite this, the rising trend highlights challenges in job availability and skill mismatches, particularly in sectors such as retail and hospitality, which traditionally employ a high proportion of young workers.
Economic Inactivity Rates
Scotland
Economic inactivity among 16 to 24 year olds (those not in employment or actively seeking work) was estimated at 37.6%, an increase of 0.6 percentage points from the previous year.
This equates to approximately 208,600 young people being economically inactive, a rise of 4,100 compared to the previous period.
The inactivity rate has increased by 2.5 percentage points compared to pre-pandemic levels.
United Kingdom
The economic inactivity rate for the same age group across the UK was 41.3%, which is 1.6 percentage points higher than the previous year.
Similar to Scotland, the inactivity rate has seen a 2.5 percentage point increase since 2018-2019.
Scotland's youth inactivity rate remains lower than the UK average (37.6% vs 41.3%), indicating that a smaller proportion of young Scots are disengaged from the labour market. However, the rise in inactivity rates suggests a growing number of young people staying in education longer or facing barriers such as health issues or lack of relevant skills.
While Scotland continues to outperform the UK in several key indicators, the overall trend suggests challenges that are consistent across the country. The decline in employment rates and increase in inactivity rates point to ongoing economic challenges, likely influenced by factors such as:
Post-pandemic recovery issues
Changes in educational participation
Rising cost of living pressures
Structural changes in the job market, including automation and digital transformation
Regional disparities in job creation and opportunities
Youth employment programs and targeted government initiatives, such as apprenticeships and training schemes, will be critical in addressing these challenges and helping young people gain relevant skills for emerging industries.
The ONS has expressed concerns regarding the reliability of APS estimates due to falling response rates and outdated population figures. Confidence intervals have been provided to ensure transparency in the data's accuracy, and users are encouraged to interpret these figures with caution. Future improvements in data collection methodologies are expected to enhance the accuracy of youth labour market trends.
Scotland's labour market for 16 to 24 year olds compares favourably to the rest of the UK, with higher employment and lower unemployment and inactivity rates. However, the overall downward trend in employment and increasing economic inactivity highlight the need for targeted interventions to support young people in entering and remaining in the workforce. Policymakers and stakeholders must focus on strategies that address these challenges and ensure sustainable economic opportunities for the next generation. Long-term investments in skills development, mental health support, and career guidance will be essential in ensuring a resilient youth labour market.
