CESI 9 th May 2013 “Youth Unemployment and Policy Development"? Paul Gregg

Youth Unemployment Youth Labour Market far more cyclical than adults – typically 3x the amplitude Youth employment very sensitive to certain sectors – retail/hospitality Young people respond to LM downturn by extending education (hence NEET movement less cyclical than employment) Employers also shifting toward older recruitment as supply diminishes (but leaves a very vulnerable minority) Deep seated structural rather than cyclical problem

But Recessional Effect on Youth employment is large but offset by education NEET Populations and Education Participation Source: Authors calculations based on the LFS [Britton (2011) ‘School Leaving Decisions in the 2008 Recession’ – available on request]. Figures include England and Wales only. Substitution into education appears to have prevented the employment shock of the recession being converted into huge increases in the NEET population.

NEEThood 16-17, 18-24

Policy Development – education/training primary focus - RPA It is policy development not the economic recovery that is central here Youth contract not functioning well Some increase in apprenticeship offers Lots of charity sector action on small scale Growth of traineeships (pre-apprenticeships) City Deals - devolution

Policy Development Ownership vacuum and lack of partnership up and down the food chain – schools, FE, JC+, etc City Deals – devolution opening up this space but needs sizable step - Youth Transitions Partnerships – pooling budgets from local and national agencies to develop architecture Charged with: Supporting careers guidance in schools, industry- school links, early identification of youth likely to become NEET, tracking youth, fund traineeships, recruit employer-based apprenticeships and jobs, brokerage role etc etc Growth of traineeships (pre-apprenticeships)

Policy Development Schools lack motivation in this space - Destinations monitoring for school cohorts – Ofsted assessment of support and performance RPA entitlement for all youth – funds equivalent to two years A level budget (with pupil premium for disadvantaged) to pay for educational/work investments Financial support – CB/UC if in ft education, wage in apprenticeship/job, nowt otherwise

Policy Development Youth employment more central but still a strong structural issue/policy design space – About 2/3 of NEETs on benefits but only 20% in Work Programme – due to duration criteria Little focus of work experience – WE programme/recruitment subsidies – no New Deal / FJF structure Unclear backstop for those with long-term disconnection, post-WP – Mandatory Work Activity

Policy Development Three tier intervention 1. Work Trial – short duration unpaid position where vacancy/position exists (early in claim as low cost) 2. Subsidised job with employer or part-time FJF style position with job search support and conditions with outcome bonuses (within Work Programme period) 3. Intermediate Labour Markets for long-term disconnection