The careers of young adults have been heavily disrupted by the
pandemic. So far, though, there has actually been little sign of
increases in deprivation among this group. The furlough scheme
and the option (for many) of living with their parents have
papered over the cracks, protecting their living standards and,
most likely, substantially reducing their risk of falling into
poverty.
But young workers are still more likely than older workers
to be furloughed, the support from the furlough scheme is being
wound down, and living with parents is often not a sustainable or
desirable long-term option. It is no surprise that young
people report being more pessimistic about their immediate
financial future than other age groups.
These are among the key conclusions of new research, published
today by the Institute for Fiscal Studies and funded by the
Joseph Rowntree Foundation.
Looking at jobs and pay:
-
The share of young adults aged 19–24 who are not
working any hours per week (including those who are furloughed)
rose by 25%, or around 400,000 people, from 2019Q4 to
2021Q1 – much more than changes seen for older age
groups.
-
The vast majority of those jobs have, thus far,
been saved by the furlough scheme, with only 50,000
additional 19- to 24-year-olds without any job at all in early
2021 compared with pre-pandemic. But this leaves the group
especially vulnerable as the furlough scheme is wound
down.
-
Unlike for older workers, earnings growth among
younger employees (aged 19–34) who have continued to work has
been lower than prior to the pandemic. This may not
have large immediate consequences, but if this ground is not
regained then the longer-term effects on their incomes will be
significant.
There is no evidence, yet, of increases in
deprivation amongst young people:
-
Changes in measures of deprivation for 18- to
24-year-olds have been similar to, or on some measures better
than, those for older adults (aged 25–64). For
example, reported use of a food bank in the last month by young
adults fell from 6% pre-pandemic to 3% in April–May 2020 and 1%
in early 2021.
-
In addition to the furlough scheme meaning that
relatively few people have lost their jobs entirely,
there has been only a small rise in the fraction of 19-
to 24-year-olds who live in a household where no one is
working – a 1 percentage point rise (from 16% to 17%),
lower than the 2 percentage point rise (from 17% to 19%) for
25- to 64-year-olds.
-
Excluding full-time students, the share of 19- to
24-year-olds who live with their parents has increased from 45%
to 50%. (Including full-time students who moved back
home when universities and colleges closed, the share increased
from 61% to 71%.) This highlights the support that many parents
are able to provide to their adult children to help them
through this difficult period.
Xiaowei Xu, an author of the report and a Senior
Research Economist at IFS, said:
‘Young adults have been especially likely to be furloughed during
the crisis, though relatively few have completely lost their job.
Many have responded to this by staying or moving back in with
their parents – providing temporary protection for their living
standards. But we know that shocks early on in people’s careers
can have negative effects on their future job prospects. Without
effective support, there is a risk that young people today will
bear the scars of the recession for years to come.’
ENDS
Notes to Editors
-
This comes from a pre-released chapter from our annual
"Living Standards, Inequality and Poverty in the UK: 2021". The
chapter is called "The labour market during the
pandemic", by Jonathan Cribb, Tom Waters, Thomas Wernham,
and Xiaowei Xu".
