This blog post was produced for inclusion in the Birmingham Economic Review for 2021.
The annual Birmingham Economic Review is produced by the University of Birmingham’s City-REDI and the Greater Birmingham Chambers of Commerce. It is an in-depth exploration of the economy of England’s second city and a high-quality resource for informing research, policy and investment decisions.
This post is featured in Chapter 3 of the Birmingham Economic Review for 2021, on the city’s labour market and current and future challenges
Click here to read the Review.
The Covid-19 pandemic has disproportionately impacted on young people’s experiences of, and transitions into, work. Across the UK there were 340 thousand fewer payrolled employees aged 18-24 years in April 2021 than in February 2020. In relative terms young people suffered the largest reductions in payrolled employees at the outset of the pandemic. They have been slowest to see recovery as hiring has increased once again. In part, this picture is explained by the sectoral footprint of the pandemic, with the hospitality and non-essential retail sectors, where many young people traditionally gain initial work experience, hard hit.
The unequal nature of the jobs crisis has exacerbated inequalities amongst young people. As previously in the context of a difficult labour market, young people – especially young women - have taken up further and higher educational opportunities. Ethnic differentials in economic experience have widened, with the reduction in employment rates being four times and three times greater for young Black people and young Asian people, respectively, than for young white people (albeit higher rates of participation in education by the former two groups explains part of this difference). The least well qualified have also fared worse than those with higher qualifications.
Just as they have been impacted most in employment terms, young people have experienced the greatest deterioration in mental health during the pandemic of any age group. Worsening mental health amongst young people was a concern before the pandemic. There is a positive association between young people in insecure work and reporting of mental health problems. Survey evidence suggests that anxiety is higher amongst the unemployed than those in work, and that the longer young people are jobless the more negative they feel about themselves. While mental health issues are a matter of concern currently, evidence from previous crises suggests that mental health issues risk harming future job prospects and so have longer-term impacts.
The scarring effect of higher unemployment and lower earnings persisting for young people who fail to make ‘good’ transitions into the labour market highlights both the importance of combatting worklessness and facilitating transitions from education to employment and of job quality. The Covid-19 pandemic has underscored the link between high quality work and healthy lives not only for young people but across the age spectrum. Hence the nature of labour demand matters.
For young people a ‘good job’ is usually a full-time job but with flexible hours of work paying above the living wage. They also place onus on sharing the ethics and values of the company they work for: they want to believe in the content of the job or the purpose of what they are doing. Employers seeking to attract and retain young talent need to pay heed to these desires and values.
Yet in 2020 and 2021 experience of work and transitions into work have been disrupted for many young people. Government responses include the Kickstart scheme, which provides young people at risk of long-term unemployment with fully-subsidised jobs to give them experience and skills, as well as an Opportunity Guarantee, giving every young person the chance of an apprenticeship or an in-work placement.
When they are not successful in finding desired roles requiring higher level skills, graduates often have the opportunity to ‘bump down’ in the labour market to take up roles requiring lower qualifications, so reducing opportunities for the less qualified. Universities in Birmingham (and beyond) are increasingly focused on providing specialised support to enable graduates to fill jobs commensurate with their skills levels, providing enterprise support and internship opportunities with local businesses, as well as emphasising the role of volunteering and other activities in providing a ‘rounded CV’ that enhances employability.
For those young people who face the greater labour market disadvantage, reviews of evidence on ‘what works’ indicates engagement through non-work-related activities and one-to-one support, both at the pre-employment stage and when in work, is helpful, as is involving young people in co-design of support. Youth Hubs and other place-based responses have an important role to play in co-locating and joining up a range of support for young people at local level.
Looking ahead, for all young people a key issue relates to outlook (i.e. the way young people view themselves and the world), since perceptions influence behaviour. Survey evidence suggests a trend towards widening of ‘outlook inequality’ with the less advantaged being more pessimistic about the future, with key perceived barriers including that employers would be unwilling to hire inexperienced candidates and having a lack of training or qualifications for a different job. There is a key role for employers seeking to diversify their workforces in challenging misplaced perceptions regarding opportunities, including through provision of virtual and physical internships, engaging in outreach events and further publicising strategies for diversifying their workforce.
Professor Anne Green
Professor of Regional Economic Development
 Wilson T. and Papoutsaki D. (2021) An Unequal Crisis: The impact of the pandemic on the youth labour market, IES, https://www.employment-studies.co.uk/system/files/resources/files/An%20Unequal%20Crisis%20The%20impact%20of%20the%20pandemic%20on%20the%20youth%20labour%20market.pdf
 Sehmi R. and Slaughter H. (2021) Double trouble Exploring the labour market and mental health impact of Covid-19 on young people, Resolution Foundation, https://www.resolutionfoundation.org/app/uploads/2021/05/Double-trouble.pdf
 The Prince’s Trust (2021) The Prince’s Trust Tesco Youth Index 2021, https://www.princes-trust.org.uk/about-the-trust/news-views/tesco-youth-index-2021
 Sehmi R. and Slaughter H. (2021) op cit.
 Green A. (2020) Spatial inequalities in access to Good Work, The Work Foundation. https://www.lancaster.ac.uk/media/lancaster-university/content-assets/documents/lums/work-foundation/reports/AnneGreenFinalPaperspring2020forpublication.pdf
 Taylor A, Green A and Hassan S (2021) Priorities for up-skilling and re-skilling: what role can and should universities play? WMREDI, https://www.birmingham.ac.uk/documents/college-social-sciences/business/research/wm-redi/wm-redi-project-docs/project-1c/what-are-the-priorities-for-upskilling-and-reskilling-report-10.05.2021-v4.pdf
 Newton B., Sinclair A., Tyers C., Wilson T. (2020) Supporting disadvantaged young people into meaningful employment, IES, https://www.employment-studies.co.uk/system/files/resources/files/548_0.pdf; Damm C., Green A. and Wells P. (2020) Talent Match Evaluation: Comparative Report, Community Fund, https://blogs.shu.ac.uk/talentmatch/files/2020/07/tm-eval-comparative-final-2020.pdf
 All-Party Parliamentary Group for Youth Employment Report (2021) A joined up approach to education, training and employment. https://www.youthemployment.org.uk/dev/wp-content/uploads/2021/01/APPG-Report-Plan-for-Jobs-FINAL.pdf
 Corfe, S. and Bhattacharya A. (2021) A matter of perspective? Outlook inequality and its impact on young people, Social Market Foundation. https://www.smf.co.uk/publications/a-matter-of-perspective/?utm_medium=email&utm_campaign=Wonk%20Week%20-%20120721&utm_content=Wonk%20Week%20-%20120721+CID_2cd1bc9caca82d74a66c0190f507e00a&utm_source=Email%20marketing%20software&utm_term=new%20report