Setting the scene: the geography of youth unemployment Jonathan Wright Youth unemployment is an area we have been looking at in both our Cities team Labour market disadvantage team GEOGRAPHY MATTERS © The Work Foundation.

Context There are nearly one million young people unemployed in the UK - the unemployment rate amongst 16-24 year olds is the highest it has been since records began. Youth unemployment has been rising since the early 2000s – even while the economy was growing. For the individual, unemployment can have ‘scarring’ effects on their future employment prospects and wages, and social development. For the UK, higher unemployment leads to lost economic productivity and higher welfare costs. 21.3% - 991,000 the highest youth unemployment rate since records began (even DURING RECESSION) AND DESPITE INCREASED PARTICPATION IN EDCUATION 979,000 NEET 16-24 year olds -16.2 % (second quarter) – highest quarter 2 levels in the last 5 years --------------------------------------------------------------------------------------------------------------------------------------------------- Why should we care? Costs for individual 12-15% wage scar – Gregg and Tominey And wider economy/society Youth unemployment £10 million a day in lost productivity – Prince’s Trust © The Work Foundation.

A growing structural unemployment problem… Young people tend to suffer in recessions, with the 2008–2009 recession no exception. Young people are more sensitive to the business cycle. Growing structural youth unemployment problem in the UK over past decade. ‘Youth unemployment gap’ has been growing. ‘Post 2004 deterioration’ – rising migration, minimum wage, falling demand for low-skilled workers etc. Unemployment rates by age group, 1975-2009 We know that young people suffer in downturns – they are sensitive to the business cycle Last in first out – lack the experience of older workers Graduates vs non grads - EDUCATION MATTERS Grad unemployment rate increased faster during the recession than non grads – but non–grad level still higher than grad Worried about a structural unemployed group Highest NEET levels in recent times (especially amongst older NEETs) Growing gap between youth unemployment rate and working age rate Why 2004 deterioration? Rising Migration – only real effect in London The minimum wage structural change in the economy made it harder for younger people/ lowest skilled – BUMP DOWN MOST LIKELY - Changing welfare to work programmes –New Deal for Young people – less of a focus on young people (introduced in 1998) IN SHORT, NO EASILY IDENTIFIABLE CAUSE Common risk factors make a young person more likely to be detached from the labour market: Education: key determinant of labour market outcomes – Wolf review – less than 50% of students have both English and Maths GCSE (A*-C) by age 18 Training and experience deficits: UKCES survey of employers – experience as the main reason for under preparedness Soft skills/ Employability skills: CBI surveys Personal problems and home life Psychological and emotional problems Local labour market © The Work Foundation.

There is a distinctive geography… Change in Claimant Rate, March 08 – March 11 In general, highest unemployment rates are in areas characterised by weak economies and low skill profiles. These places tend to be in the North of England and did relatively poorly during the recession with large increases in unemployment. On the basis of their relatively low skills levels and high reliance on public sector employment, many of these places are unlikely to do well in the recovery… …this suggests major problems for the future Map of change in claimant count rate between March 2008 and March 2011 Familiar pattern – low skills, public sector dependence Many places - limited employment opportunities Limited private sector demand – and prevalence of ‘bad jobs’ ALSO Geographical differences matter most for the least qualified EMPLOYMENT RATES VARY MUCH MORE FOR THOSE WITH NO QUALIFICATIONS THAN FOR HIGHLY SKILLED PEOPLE Source: Job Centre Plus administrative system © The Work Foundation.

The recession made things worse in NEET hotspots The cities with the highest NEET rates amongst 16-24 year olds in 2009–2010 were: Doncaster Grimsby Sunderland Huddersfield Rochdale and Oldham The recession exacerbated the problem in high NEET cities Changes in NEET rates during the recession? Used the Annual Population Survey to look at city level NEET rates for 16-24 year olds In these NEET hotpots young people are being squeezed in two ways: Increase in Unemployment means fewer entry level jobs for those leaving education Public sector cuts restricting youth services and capacity of government to help people enter the labour market Source: Annual Population Survey, TWF Calculations. From 58 Cities. © The Work Foundation.

But… There are factors beyond the availability of work Access to opportunities and aspirations are shaped by social networks and attachment to place (Green and White, 2007): Strong reliance on family and friends: May reduce ambition (‘we don’t do that around here’) May curtail choices to familiar locations and jobs Shaping outcomes for young people © The Work Foundation.

Social networks, mobility and prospects of young people Attachment to place Social networks, mobility and prospects of young people Anne E Green and Richard J White JRF 2007 This map is illustrative of detailed spatial knowledge and an accurate sense of scale of part of East Hull. Friends’ houses are marked prominently. Key local landmarks are shown also. There is an arrow to Hull city centre (identified as ‘town’), which is off the map, but West Hull does not feature at all (other maps of Hull showed similar local detail). © The Work Foundation.

Dismantling of IAG architecture Apprenticeships This map is cruder but more spatially extensive than many of the other mental maps of Hull. The college is shown in the city centre and West Hull appears on the map. The individual’s place of work is shown also. Sporting venues (i.e. the KC Stadium and Hull KR (i.e. Hull Kingston Rovers rugby league ground) are depicted. Comments on the map emphasise strong place attachment and ‘hostility’ to other areas. Dismantling of IAG architecture Apprenticeships ‘Get on the bus’? © The Work Foundation.