Monday, 23 April 2012

Fall in youth unemployment due to more in full-time education

by Mark Corney

Much has been made of the fall by 9,000 in the number of unemployed 18-24 year olds.

Welcome news indeed but the presumption is they are in jobs. Nothing could be further from the truth as the number in employment also fell by 12,000.

So where have these 21,000 18-24 year olds gone?

16,000 more were economically inactive – without a job and had not looked for work – and
to complete the picture there are 5,000 fewer 18-24 year olds in the overall population

But the real story behind the figures is the continuing role of full-time education in reducing youth unemployment and inactivity.

The number of 18-24 year olds classed as unemployed fell by 9,000 but 2,000 more were in full-time education whilst 11,000 fewer were unemployed and not in full-time education.

In addition, 16,000 18-24 year olds were economically inactive but 25,000 more were inactive but in full-time education whilst 9,000 fewer were inactive and not in full-time education.

Finally, the number in employment fell by 12,000, with 9,000 fewer in jobs outside of full-time education but also another 3,000 in full-time education without a job.

Overall, however, there were 24,000 more 18-24 year olds in full-time education.

Expansion of full-time education is off-setting the loss of jobs and minimising the groups the Coalition Government is rightly concerned about, namely the 654,000 unemployed and 595,000 inactive 18-24 year olds not in full-time education.

In Whitehall, it is DfE and BIS rather than DWP which is doing the heavy lifting in reducing youth unemployment. After all, they and not DWP are responsible for funding places in full-time education for 18-24 year olds.

But the critical question is whether expansion of full-time education could reduce youth unemployment yet further.

18-24 year olds are able to study full-time in higher education because they are eligible for maintenance loans and grants.

There is no similar comprehensive system of financial support for full-time FE students. Child benefit, child tax credit and bursaries stop at 19, and unemployed 18-24 year olds are unable to claim JSA and study full-time in further education.

Creating a system of grants and loans for full-time FE students aged 18-24 could increase the contribution of the further education system to reducing youth unemployment and inactivity. 

And the benefits would not stop here.

Nearly 600,000 18-24 year olds are in full-time education and have a part-time job. Most 18-24 year olds in full-time education are HE rather than FE students.

Developing a system of maintenance loans and grants for full-time FE students aged 18-24 would enable more young people on courses below degree level to compete for part-time jobs.

Full-time FE students as well as full-time HE students would be able to combine maintenance support with part-time work.

And, of course, the type of jobs the economy is producing right now is part-time not full-time.

A new system of maintenance grants and loans for full-time FE students could produce a win-win for 18-24 year olds.

They could leave unemployment and potentially gain extra income from part-time work in the short-term. And higher qualifications and work experience gained from being able to afford to take a part-time job because they were entitled to maintenance grants and loans could improve their employability in the long-term.

Mark Corney is policy adviser to CfL and writes in a personal capacity.

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