UK’s youth employment performance remains around OECD average, according to PwC research

• Improving youth employment outcomes and reducing the NEET (not in education, employment or training) rate in all UK regions to match the level of the South West could boost the UK economy by around £23bn per year 
• The Netherlands, Switzerland and Iceland are the best performing countries on the Index
• Australia, South Korea and France saw the largest improvement over the last five years while Poland, Sweden and Estonia saw the greatest fall(2) 

The UK’s youth employment performance remains relatively steady, ranking 22nd out of the 38 OECD economies, according to PwC's 2024 Youth Employment Index(1), co-produced with Connectr. 

The Index, which began in 2006, tracks the progress of youth employment outcomes across the 38 OECD countries using a combination of seven indicators to gain a holistic view of labour market performance for young people, including looking at labour market participation, quality of work and skills acquisition.

The UK performs strongly with regards to its youth employment rate, ranking 10th, with just over 53% of its youth population (those aged 15 to 24) employed, surpassing the OECD average of 41%. However, its overall score is dragged down by the high proportion (34%) of young people undertaking part-time work, which is significantly higher than the OECD average (29%). This means young people in the UK are often likely to have on average lower job security compared to their peers in Europe, though this may reflect the increasing number of students working part-time alongside full-time study due to cost of living pressures.

Improving NEET levels would have substantial economic benefits

According to OECD data, the UK’s NEET (not in education, employment or training) rate for 16 to 24 year olds was just over 12% in 2023, ranking 18th in the OECD, with little movement over the past five years.

Youth NEET rates are unevenly distributed across the UK, with around one in six young people in NEET status in the North East and Scotland, compared to just one in 13 in the South West. 

The report estimates that lowering NEET rates of 16 to 24 year olds across all regions, to match that of the South West, would mean around 342,000 young people moving out of NEET status. The analysis estimates that integrating an individual who is currently NEET into the workforce could boost UK GDP by over £65,000 a year per worker. 

Green jobs could be part of the answer

The study also underlines how the emergence of the green economy could create an opportunity to grow youth employment. Through a series of company interviews conducted in collaboration with Connectr, the report sets out a number of policy ideas and recommendations for individual companies wanting to ‘green’ their career pathways and processes for upskilling talent in the transition towards Net Zero.    

Barret Kupelian, Chief Economist, PwC UK, said: 

“Improving the opportunities for the UK’s youth population will significantly boost the overall UK economy. While the UK is performing close to the OECD average, there are clear economic and social benefits that could be achieved through providing an integrated approach to youth employment, and avoiding the long-term impacts we saw for young workers following the 2008 financial crisis. 

“The high level of part time and non-secure employment among the young should provide concern for UK policymakers as it indicates many are finding jobs but may be struggling to find pathways to careers. The blueprint for improvement for the UK can be seen in the top performing countries in the OECD. These countries have consistently achieved results through robust vocational training and apprenticeship systems, alongside initiatives to set young people up for a smooth transition from education to work through regimes that connect students with industry. 

"A growing opportunity for the young is the rise in green jobs in the UK. It is currently soaring, with an estimated two million new jobs being created by 2030. Identifying and promoting pathways for young individuals to gain green and sustainability skills, along with providing necessary training through modern education and targeted training, will unlock economic benefits in the billions to the UK economy.”

William Akerman, Founder and CEO, Connectr, said: 

“Reaching Net Zero will not happen without the green skills to get us there. The transition to green jobs is a once in a generation shift in our workforce. Whilst re-skilling existing employees is a necessity, employers will also rely on the workforce of the future; those currently in education.

“More than 72% of students aim to work for an employer aligned to sustainability, now is the time for employers to engage and support students, raising awareness, and preparing them for a green career. Green-job opportunities will open the doors to underrepresented and disadvantaged young people and employers that are proactive in developing their green transition will be more attractive to the next generation of talent.” 

End.

Notes to editors:

1) PwC’s Youth Employment Index explores the large variation in outcomes for young people across the OECD through analysing and compiling seven different key labour market indicators using the OECD data (2023, 2022 or the most recent available data).

2) The Netherlands tops Youth Employment Index

• The 2024 Index reveals a notable stability in the rankings of both the top and bottom performers in the last year. This suggests the impacts of the pandemic have muted significant shifts in youth employment outcomes, particularly at the extremes of the spectrum. Overall, this is at least a 20 year low in the OECD’s youth unemployment rate.
• The Netherlands takes the top position in this year’s Youth Employment Index. The Netherlands has shown steady improvement since 2014.
• The Netherlands and Iceland have both the highest youth employment rate and the lowest youth NEET rate in the OECD. A high youth employment rate suggests that young people in these economies are well-integrated into today’s workforce. At the same time, a low NEET rate bodes well for future employment prospects as the majority of young people in these economies are either gaining employment experience or upskilling through education and training. 
• Italy was ranked lowest performing overall, followed by Colombia and Greece. Italy and Greece report the lowest youth employment rate in the OECD at 20% and 18% respectively.