Young people were already at the sharp end of structural changes going into the Covid crisis, but they are the group who have been hardest hit by the pandemic when it comes to both labour market outcomes and their mental health.
This was the central finding of a wide-ranging report by the Resolution Foundation published today (13 May 2021), which urged the government to extend measures such as Kickstart that were designed to fend off the risk of long-term unemployment for younger people.
Among the study’s main tenets was the idea that the labour market should not be considered separately from mental health and that long-term support will need to be provided for sectors of the economy where there was a preponderance of younger people.
The report, Double Trouble: Exploring the labour market and mental health impact of Covid-19 on young people, confirmed the link between unemployment, insecure work and mental health issues. It found that on the eve of the crisis 40% of 18-24-year-olds who were unemployed had a common mental disorder (such as anxiety and depression – known as CMD), compared with 30% in insecure work and 27% in secure forms of employment. In January 2021 a quarter of 18-24 year olds who had not had a mental health condition before the crisis had a new mental disorder. For 18-21 year olds the figure stood at 30%.
Labour market and young people
In January 2021, one-in-five (19%) of 18-24 year olds who were in work before the crisis were no longer working, compared with 4% of 25-54 year olds.
The impact had not been evenly spread among young people, the report found, with black 18-24-year-olds being 17 percentage points more likely than their white counterparts to be out of work despite wanting a job, compared with 8 percentage points before the crisis. Similarly, young men were being harder hit than young women, with almost 19% unemployed or inactive but wanting work at the end of 2020 compared with 14% of women.
A two-pronged approach was required from policy-makers to prevent long-term damage being done to the life chances of young people, the authors suggested, with increasing economic stimuli being critical.
“Direct government investment to create jobs in sectors such as social care and green jobs would provide opportunities for young and older workers alike, and would have a major advantage in being spread widely throughout the country,” the report stated, adding that targeted wage subsidies were needed in the hardest hit sectors such as leisure and hospitality would help employers hold onto more workers.
The Kickstart scheme was a welcome tool for tackling long-term unemployment, wrote the authors, but should be extended beyond the end of 2021 because there had been renewed restrictions since the scheme was introduced.
Experiencing these mental health problems today can harm young people’s employment prospects in the future too” – Rukmen Sehmi, Resolution Foundation
They warned that the Restart scheme risked falling into the same trap as the Work Programme which ran between 2011 and 2017. The latter was shown to help the “ideal worker” but was less effective for people with mental health problems, with only 11% of those with a CMD finding work through it. The underfunding of mental health services during the decade of austerity (2010-20) also had to be reversed, the report said.
An example of policy that benefited mental health and the economy was provided by the Job Retention Scheme which had had “considerable preventive power when it comes to mental health as well as jobs”. The report saw that young people who had been furloughed over the past year were no more likely to report poor mental health as those who had seen no change in their work status over the period (28% of both groups).
Rukmen Sehmi, senior research and policy analyst at the Resolution Foundation, said: “Worryingly, experiencing these mental health problems today can harm young people’s employment prospects in the future too.
“It is essential therefore that as we emerge out of the pandemic the government intensifies its efforts to get young people back working, and provides the right support for anyone suffering with mental health problems.”
Martina Kane, policy and engagement manager at the Health Foundation, said high quality work was an essential building block for young people and gave them feelings of independence and resilience. “Conversely, unemployment is likely to have a negative impact on mental health, contributing to instability, lack of purpose and low self-esteem.”
It was crucial, she said, that ministers put young people at the heart of its Covid economic recovery plans recognised. “The country’s future prosperity depends on the health and wellbeing of this age group. We must ensure this ‘lockdown generation’ are provided with the support they need,” said Kane.