Will Covid-19 vaccines be enough to get the economy back on track, curb youth unemployment, and mitigate mental health effects?.
By Blog Editor, IOE Digital, on 12 January 2021
With the country in the third national lookdown, a Covid-19 free future can sometimes be hard to imagine. But the roll out of first vaccines, albeit slow, does fuel hopes that we can put the health crisis behind us before too long. But how swiftly will the economic recovery follow, and what will this mean for our nation’s young people?
Our new project examining the Covid-19 pandemic’s impacts on youth employment, learning and well-being has received funding from the Economic and Social Research Council (ESRC). We will provide robust evidence on the pandemic’s consequences for young people’s employment, learning, and well-being.
A swift economic recovery seems essential to keep people in work or help them return to paid employment. Despite the successful furlough scheme which protected workers from the worst, young people have been hit hard by the pandemic. Workers aged 16-24 were more than twice as likely to work in ‘lockdown’ industries and about three times more likely to be in potentially precarious employment than workers above 25. According to the Resolution Foundation, a third of 18-24-year-olds lost their job or were on furlough by May. Workers under 30 have seen their hours cut harder, express greater job tenure insecurity, and were more than twice as likely as prime-aged workers to have lost their jobs . Will containing the virus be enough to kick start the economic recovery? In its latest spending review, the Chancellor of the Exchequer predicts long-term scarring for the British economy as late as 2025 based on Office for Budget Responsibility projections.
This blogpost looks at how closely Covid-19 related deaths are linked with changes in economic activity and youth unemployment in 2020, making comparisons across more than 30 medium to large middle and high-income countries. Doing so can help illustrate the importance of stopping the virus for economic activity and youth unemployment.
Three key findings emerge from the data.
First, only very few countries managed to avoid a hit to their economy or young people’s employment. The economic fallout from the pandemic is as global as the health crisis itself.
Second, countries with fewer COVID-19 related deaths relative to their population size did better at maintaining economic activity and keeping young people in work.
Third, there is a lot of wiggle room for policies to shape how the economic recovery will trickle down to individuals. The crisis has shown governments’ power to ameliorate hardship. In fact, there is at best only a weak relationship between how well or poorly an economy fared in 2020 and trends in youth unemployment. For example, Britain’s economy shrank more than its already high COVID-19 mortality rate would have suggested, but it managed to keep youth unemployment in check much better than initially feared. By contrast, Canada and Ireland contained COVID-19 better than Britain and had more stable economies, but both countries witnessed substantial increases in youth unemployment, up to 19 per cent, in September 2020. In Germany, which had success at containing the virus initially, youth unemployment remained unchanged at 6 per cent despite a notable drop in economic activity.
This online supplement provides further details.
To support a recovery that benefits all, we need to understand better how young people can succeed in education and work during this critical time. An equitable economic and social recovery from the pandemic will not come about by default. In the United States employment rates for high-wage workers have rebounded to pre-COVID-19 levels, but they remain significantly lower for low-wage workers. Currently, we know too little about how career planning, job skills and local employment support initiatives can come together to help, especially vulnerable young people, to maintain employment, get back to work, and develop productive skills in times of crisis and beyond. What happens to young people’s skills becomes especially important for Britain’s long-term future economic recovery, following its exit from the European Union. With our new research project at the LLAKES Centre, we hope to narrow this knowledge gap.
This is the first in a series of regular blogposts drawing on research insights from the project. The blogs will come out over the next 18 months on the LLAKES and IOE websites to provide commentary and give timely accounts of our research on youth economic activity and health.