From economically “inactive” to economically valued - March 2022
“Economic inactivity” is a labour market economists’ term, not a description of what people in this category are doing. It is necessary to distinguish which people in the UK could be seen as making up the UK’s “spare” labour market capacity and therefore fuel future economic growth.
But in the real world it means people who are caring for others, supporting communities through volunteering and of course studying and training - all activities which are crucial to the economic health and wellbeing of the UK. It also includes many disabled people or those with long-term health conditions, many of whom may not be able or want to get a job, but many who would like to work.
Our report looks at the challenges and solutions for helping more economically inactive people to start working.
- There is an urgent need to support employers to fill vacancies across the UK economy.
- The positive news is that there are more than double the number of people who want to work as there are vacancies (1.4 million unemployed plus 1.7 million economically inactive who want to work).
- The challenge is finding people the right support and equipping them with the right skills, recognising that many of them will want/need flexibility over hours and place of work. For example, a recent ONS survey of people aged 50-70 who had left the labour force since March 2020 and not returned revealed that flexible hours, the ability to work from home and the ability to balance work with caring responsibilities were the top three things that they thought would encourage them back.
- Disability/health conditions: There are more than half a million people who are not working or looking for work because of a disability or health condition who would like to work. For the over 50s, disability or long-term illness is the key barrier to work, with people in this group rising more rapidly than any other economically inactive group over the past few months.
- Caring responsibilities: For working-age women who are economically inactive but want to work, caring responsibilities are the biggest reason for not doing so (33% of women compared to 10% of men).
- Students: There are almost 400,000 students who want to work while studying. If they can fit work around their studies then there are benefits for both employers and students themselves, for whom research points to positive longer-term career benefits of doing so.
- Region: There are very strong regional variations. For example, in London 28% of economically inactive people who want a job are not working because of caring responsibilities (40% of London women), compared to 16% in the North West. Disability or long-term sickness is a much bigger barrier for economically inactive people who want to work in Northern Ireland (37%), the North of England, Wales and Scotland than it is in London (15%).