The Labour Market Position of 18-21 Year Olds

1 In Chapter 5 we found that there have been slight increases in employment rates for 18-21 year olds and a fall in unemployment rates since the introduction of the minimum wage. However, in the period Summer 2001-Autumn 2003 there was a significant worsening in their labour market position (particularly for those aged 18-19), but the decline appears to have halted since the October 2003 upratings. This Appendix provides additional information on the labour market position of 18-21 year olds.

2 According to the Labour Force Survey (LFS), the population of 18-21 year olds has been steadily rising, from 2.65 million in Spring 1998 to 2.91 million in Summer 2004 (using four quarter moving averages). This represents an increase of 10 per cent (11.2 per cent for men and 8.8 per cent for women). Figure A6.1 shows that the number of 18-21 year olds in full-time education (FTE) has risen by 14 per cent over this period (12.7 per cent for men and 16.1 per cent for women), with a noticeable increase since Summer 2002. Figure A6.2 shows that the fall in the proportion of employed 18-21 year olds not in FTE since Summer 2002 mirrors the increased participation in FTE.

Figure A6.1

Number of 18-21 Year Olds by Education and Labour Market Status, Thousands, 1998-2004

Source: LFS, four quarter moving average, 1998-2004.

Figure A6.2

Proportion of 18-21 Year Olds by Education and Labour Market Status, 1998-2004

Source: LFS, four quarter moving average, 1998-2004.

3 In Summer 2004 employment levels for 18-21 year olds were at their highest level (four quarter moving average) since the introduction of the minimum wage. Since Spring 1998 they have risen by around 110,000 for men (about two-thirds were not in FTE) and 85,000 for women (over two-fifths were not in FTE). This is demonstrated in Figure A6.3. In the year to Summer 2004 employment levels increased by 22,000 for men (12,000 for those not in FTE) and 23,000 for women (16,000 for those not in FTE).

Figure A6.3

Employment Levels for 18-21 Year Olds by Gender, Thousands, 1998-2004

Source: LFS, four quarter moving average, 1998-2004.

4 In Chapter 5 we showed that employment rates for 18-21 year olds not in FTE had fallen for men between 2001-2002 and then stabilised, while the rate for women fell from 2002-2003 and then stabilised (see Figure 5.5). Unemployment rates for 18-21 year olds not in FTE have largely mirrored the employment rates, as illustrated in Figure A6.4.
For men the unemployment rate increased between 2001-2002 before falling, while for women the unemployment rate increased in 2002-2003 before falling slightly.

Figure A6.4

Unemployment Rates for 18-21 Year Olds Not in Full-time Education, 1998-2004

Source: LFS, four quarter moving average, 1998-2004.