Rising NEET numbers a concern…

Last week, Government published statistics on the participation in education, training, and employment of 16 to 18 year-olds in England. It shows that the number of 16 to 18 year-olds who are Not in Education, Employment, or Training (NEET) is rising. This could spell trouble for the UK’s longer-term prospects for growth, productivity, and social mobility.

While the statistics on 16 to 17 year-olds are interesting, participation rates amongst 18 year-olds are most informative. There are stricter statutory requirements for 16 to 17 year-olds to be engaged in some sort of education or training following the introduction of legislation which raised the compulsory participation age in 2013.

18 year-olds do not face the same requirements. This makes 18 year-olds the first group who get autonomy in how, or if, they will engage with the economy – participating directly through employment, investing in long-term skills through training or education, or whether they don’t participate at all.

Participation in education and training amongst 18 year-olds is falling…

In 2022, 78.7% of 16 to 18 year-olds were participating in education. This is down 3.7 percentage points from the high of 82.4% in 2014. This modest reduction masks a steeper drop in education participation amongst 18 year-olds specifically, where participation has fallen to 57.5%, down 7.5 percentage points from 2014.

The chart below shows the proportion of young people who are in education over the past 20 years, split between 16 to 17 year-olds and 18 year-olds. It shows that the participation rate amongst 16 to 17 year-olds climbed following the Raising of the Participation Age in legislation in 2013 and has largely plateaued since – notwithstanding a modest recent decline. Meanwhile, the participation rate amongst 18 year-olds has started to fall from its high in 2014. About two thirds of this decline happened in the last two years – falling from 62.3% in 2020 to 57.5% in 2022. If current trends continue, it could fall below 50% within the next five years.

Rising participation in HE is no longer offsetting reductions elsewhere…

In 2022, 13.0% of 18 year-olds were enrolled in secondary education, 14.5% in Further Education (FE) and 34.0% in Higher Education (HE).

The chart below shows the proportion of 18 year-olds who are in secondary education, HE and FE over the past 20 years in England. It shows that over the last ten years, there has been a falling proportion of 18 year-olds enrolled in FE and secondary education while the proportion of those enrolled in HE has increased. Until about 2020, the declines in FE and secondary education were largely offset by the increases in HE, however as HE participation peaked in 2020 and declined the two years following, while secondary education and FE continued their decline, overall participation rates dropped substantially over these two years.

 Employment is not making up the difference for 18 year-olds…

The rising number of 18 year-olds who are opting out of education are not flocking into employment. In fact, the proportion of 18 year-olds Not in Education, Employment or Training (NEET) jumped this year to 15.9%. This followed a Covid induced low of 9.7% in 2021. This is its highest level since the aftermath of the 2008 financial crisis and represents a 60% increase in the proportion 18 year-olds who are NEET over the last 6 years. This is particularly alarming given the comparatively strong jobs market which has seen unemployment sitting around 4% since the end of the pandemic.

The chart below shows the proportion of 18 year-olds who are NEET compared to the unemployment rate over time. It shows that for much of the past 20 years, there has been a pretty close relationship between the overall unemployment rate and the proportion of 18 year-olds who are NEET. This is unsurprising – a more favourable labour market sees more 18 year-olds in employment. However, after 2016, we see the 18 year-old NEET rate and the unemployment rate decouple, with the NEET rate increasing while the unemployment rate continues to decline.

 Unemployment rate source: Office for National Statistics

Participation rates are lower for young men than for women…

64.2% of 18 year-old men are not participating in education or training, compared to 67.2% amongst 18 year-old women.

The chart below shows the proportion of 18 year-olds in education or training by gender over the last 20 years. It shows that the proportion of male and female 18 year-olds in education tracked similarly for much of the past 20 years. However, over the past 5 years, the proportion of 18 year-old men in training or education has seen a faster decline than that seen by 18 year-old women. In 2017, 71.0% of all 18 year-olds were in education or training regardless of gender. This has declined by 3.8 percentage points for 18 year-old women and by 6.8 percentage points for 18 year-old men.

So what…?

The picture is concerning.

Unless action is taken to boost participation, the next generation of school-leavers could become the least economically active in a generation - hampering efforts to achieve economic growth and to improve productivity and social mobility.

We’re concerned that rising inactivity amongst 18 year-olds could indicate a fall in trust in the future of the country i.e. a rising feeling that investing in skills won’t be ‘worth-it’ in the long run.

Young people are pessimistic about their economic future and face increasing financial barriers to pursuing higher education, giving them less motivation to invest in their skills or start to develop a career.

So - Government needs to do more to convince young people that investing in skills will prove to be a worthwhile investment. In doing that, it needs to take action to reduce the structural barriers to participation in further and higher education - not least a learning cost crisis and falling provision of apprenticeship places.