From the TUC

How do unemployed students affect youth unemployment rates?

15 Oct 2009, by in Economics, Labour market

Yesterday saw some media discussion about the interim findings of the Government’s review into the discrepencies between ILO unemployment levels and the claimant count. Full-time students are not eligible to claim JSA, and over 250,000 define themselves as unemployed, so this will be part of the distinction and the Government are right to point it out. But I think it would be wrong to conclude that unemployed people in full-time education are not a concern – the reason they are classified in this way is more than just a tick box error.

Students who are not looking for work (and under the ILO definition unemployed students need to be actively seeking jobs) are classified as economically inactive, so ‘unemployed’ is by no means a default option for students to fall into. ‘Full-time’ can mean as little as 12 hours a week, and it’s now (probably more than in previous recessions) fairly normal for people to expect to balance study with part-time work to finance their education, whether that’s at college or university. Unemployed students are definitely likely to have better future prospects than unemployed young people who are not in education or training, but students who can’t find jobs will still be experiencing financial hardship as a result of the lack of work, which could lead to higher drop out rates and increased debt. It’s also important to remember that within the ‘full-time education’ category there is enormous variation – some people may be in full-time training options because they have been required to participate as a condition of their benefits, or because they would rather be in work but can’t find a job.

Paul Bivand at Inclusion has been charting the youth unemployment breakdown for months, and his analysis shows that there have always been unemployed students (who have always been included in the youth unemployment figures). While their numbers have risen since the recession started, the increase has not been as steep as for young people who are not studying. This latter group have seen a 20 per cent rise in their unemployment rates since January 2008. Unemployed students are affecting the youth unemployment totals, but not disproportionately.

The Government are right to assert that there are different types of youth unemployment, and to concentrate action on providing real jobs (through the Future Jobs Fund) for young people who are at the greatest risk of long-term unemployment. But even though some young people will experience more extreme effects than others, we shouldn’t presume that the problems for those facing unemployment while studying are not real.