Let’s get the facts straight on youth unemployment

Times are hard for young people. No exaggeration.

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In his column in the Sunday Times (£) over the weekend, David Smith declared:

I would not diminish the problem of young people struggling to find work but the Office for National Statistics (ONS) laid it on a bit thick.

He then suggests that youth unemployment "is being miscalculated by not adjusting for the rise in numbers staying in education". No it isn't. Smith goes on to state:

As a percentage of all 18-to-24-year-olds, youth unemployment calculated this way is 13 per cent, below the early 1990s and not that far above the general jobless rate. This compares with official rates of over 18 per cent for 18-to-24-year-olds and over 20 per cent for 16-to-24-year-olds.

And his conclusion?:

Times are hard for young people but we should not exaggerate how hard.

This is nonsense, as the data will show. Let's check the official data published by the ONS for September to November 2010, which will be updated tomorrow.

 

I present the data for 16-to-17-year-olds, 18-to-24-year-olds and 16-to-24-year-olds, along with the total for everyone aged 16 and above. Note that the unemployment rate is calculated as the number of unemployed (U) divided by the labour force, which is just employment (E) plus unemployment. Data is presented separately for everyone including people who are in full-time education and those who are not. In the second part of the table, the data is presented for those who are not in full-time education.

(Those in full-time education are counted as employed if they have a part-time job and unemployed if they are searching for a part-time job. Also, there are 951,000 unemployed young people under the age of 25, giving an unemployment rate of 20.3 per cent. This contrasts with youth unemployment rates of 15.9 per cent in Denmark, 8.6 per cent in Germany and 8.2 per cent in the Netherlands.)

So let's consider the arguments. First, Smith decides to omit the 16-to-17-year-olds entirely from his calculation, possibly because they have a high unemployment rate of 36.6 per cent.

Second, even if you examine those who are not in full-time education, the unemployment rate for 18-to-24-year-olds is 18.4 per cent, 38.6 per cent for those between 16 and 17 years of age and 19.2 per cent for 16-to-24-year-olds. It is not, as suggested, 13 per cent.

Moreover, the increase in youth unemployment since May 2010 is entirely among those who are not in full-time education. Their numbers have increased by 54,000, compared to a fall of 24,000 for those in full-time education looking for a part-time job.

Contrary to what Mr Smith claims, times are hard for young people. No exaggeration.

David Blanchflower is professor of economics at Dartmouth College, New Hampshire, and a former member of the Bank of England's Monetary Policy Committee 

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