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School’s in: are more of the young staying in education during the downturn?

Many of the part-time evening and weekend jobs traditionally done by young people – in retail, and cafes and restaurants – have disappeared during the pandemic. As in other economic downturns, more young people are staying on at school.

The most recent labour market data from the Office for National Statistics (ONS) show a rise in economic inactivity in the latest quarter. According to the ONS, this is driven in part by ‘more young people […]staying in education and not looking for work, which is supported by the record economic inactivity rate of young people in full-time education’.

This article unpicks some issues implied by this statement about the link between study and work in the youth labour market.

One striking fact is that the Saturday job appears to be on long-term decline. Younger students are now much less likely to combine study with work than in the past. The Covid-19 downturn just gave this long-term decline a further kick.

In contrast, older students are increasingly more likely to be working their way through college.

What usually happens to rates of staying on in education?

It is not unusual for staying on rates in schools and colleges to rise in a downturn. If there are fewer (good) job opportunities around, it makes sense to stay on and get some more education and skills. This should help individuals’ chances of getting a good job when things pick up – although if everyone does it, then while the average level of skills in the population will rise, the chances of getting a good job may not change that much.

As Figure 1 shows, according to the Labour Force Survey, (LFS), the share of young adults in full-time education has grown appreciably over the last 40 years. Nearly 90% of 16 and 17 year olds are now in full-time education (up from 50% in the mid-1980s) and nearly 60% of 18 to 20 year olds.

But there is also notable cyclicality around this upward trend. When the economy dives, staying on rates rise. When the economy picks up, the share of young adults in full-time education falls – as Figure 1 shows.

The last three economic downturns have been accompanied by increased staying on rates in full-time education among young people (aged 16 to 24). The Covid-19 downturn looks similar in this respect – particularly for 16 and 17 year olds (staying on at school or college) and 18 to 20 year olds (enrolling in tertiary education).

Figure 1: Share of full-time students among young adults

Source: Labour Force Survey

But this chart is for all young people – the ONS report said that economic inactivity had risen among students.

This does not mean that more students than ever before are lying in bed all day. It may seem surprising but some full-time students will be counted as employed if they happen to have a part-time job. This is just how the internationally agreed definition of employment and unemployment works.

Anyone in the LFS sample, regardless of status, who works at least one hour in the week is classified as employed. Anyone who is not in work but actively seeking work is classified as unemployed. This means that there are some full-time students who are employed and some full-time students who are unemployed.

Figure 2 shows the pattern of part-time job working among full-time students over time. The Saturday job is apparently vanishing. Only around 10% of full-time students aged 16 to 17 now have a part-time job – down from around 40% in the late 1990s.

Again, there is a cyclical element to this – part-time working among full-time students falls in downturns when this type of working is more likely to be cut. The Covid-19 downturn follows this pattern, which is perhaps unsurprising as jobs in retail, restaurants and cafes, which employ many young people part-time, have been most affected by lockdowns and social restrictions.

A similar story can be told for 18 to 20 year olds: fewer students are working their way through college over time, which seems odd given the increased cost of going to university compared with earlier decades. Conversely, the number of postgraduates or older students working their way through college has grown over time.

Figure 2: Part-time working among full-time students

Source: LFS

The upshot of this is that there has indeed been an increase in ‘economic inactivity’ among younger students (Figure 3). The Covid-19 downturn has exacerbated a seeming long-term trend – a decline in combining study with work among younger students. In contrast, older students are increasingly more likely to be working their way through college.

Figure 3: Economic inactivity among full-time students

Source: LFS

These data indicate a number of changes in the work and study patterns of young people. It appears that as in previous downturns, more students are staying in school, although the younger among them are less likely to be working alongside their education. In contrast, older students are still working even while they study.

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Author: Jonathan Wadsworth
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