U.K. Workforce Is Younger, Smaller and More Female Since Covid

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More younger women are in work than ever in the U.K. as the pandemic drove structural changes to the labor market, including many older workers and men dropping out.

About 586,000 people have become “economically inactive” and no longer want to work since Covid-19 hit in March 2020, an analysis by the Resolution Foundation research group shows. Of those, 364,000 are younger than pension age.

The figures highlight a dramatic shift in the portion of those participating in the jobs market. The scale of the change far outstrips the estimated 170,000 migrants who have left Britain in the crisis and underscores shortage of skilled labor that’s helping drive up wages and prices.

“When Covid-19 hit, many worried about the risk of mass unemployment as huge swathes of the economy shut down,” said Hannah Slaughter, economist at the Resolution Foundation. “Unprecedented policy action has staved off this threat.”

The Bank of England has warned that labor market bottlenecks could trigger inflation and force policy makers to raise interest rates. Employers are currently struggling to find workers able to fill vacancies.

The rise in inactivity has been most marked among older workers and younger men. Women benefitted most from hybrid and remote working patterns, the Resolution Foundation said.

“The pandemic has seen older workers withdraw from the labour market -- and while anxieties about high levels of Covid-19 may understandably put some off from working today, the danger is they find themselves in early retirement tomorrow” Slaughter said. 

Among adults aged 25 to 44, labor-force participation among men dropped by 1.1 percentage points but rose by 1.8 percentage points among women. That was particularly true for mothers with children aged three or younger. For that group, participation rose by 5.4 percentage points to 74%.

Overall, female participation in the jobs market increased by 0.4 percentage points to 48%, up from 44% in 1992. About 500,000 women moved from part-time to full-time work in the pandemic, the researcher said.

“The pandemic has seen an increase in labor force participation among women” that is “particularly striking among mothers with young children,” the Resolution report said.

Resolution said the change in the jobs market had been driven by women finding work “to offset a partners’ loss of income” as they were furloughed and because of the rise of remote working. That  “enabled mothers to enter work or increase their hours.”

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