Young people faced with poor job prospects are turning to study to avoid the dole, the latest figures have shown.
Research published by the Office for National Statistsics today revealed that working-age inactivity has reached eight million in the three months to November 2009 for the first time since comparable data was first collected, rising by 79,000 since the previous quarter.
This was driven largely by a growth of 81,000 students, as well as 34,000 more taking early retirement.
The number of economically inactive people who want to find work also increased, by 108,000 from the previous quarter.
The figures showed that the number of young people out of work has fallen to 927,000 in the three months to November 2009, down from 943,000 jobless the previous quarter – contrary to predictions that youth unemployment could soar to one million.
Nigel Meager, director of the Institute for Employment Studies, said: “Despite this ray of hope, it remains unlikely that unemployment will begin to decline quickly and there is clearly a lot of slack in the labour market at present.
“A growing number of these economically inactive individuals would like to work. In addition, significant numbers of people are underemployed, with more than one million part-time workers unable to find full-time positions.”
John Philpott, chief economic adviser at the Chartered Institute of Personnel and Development said: “The reason for the fall in unemployment in the quarter is a jump of 81,000 in the number of economically inactive students – indicating that ever larger numbers of young people are turning to study to avoid the dole.
“This is desirable as an alternative to unemployment although it remains to be seen whether education or training is merely a stop-gap choice for thousands more young people rather than providing a genuine boost to their subsequent job prospects.”
Overall the number of people unemployed fell by 7,000 over the quarter, to reach 2.46 million – the first quarterly drop in out-of-work people since the three months to May 2008 – and the unemployment rate continues to stand at 7.8%.
However, the findings show that the number of people unemployed for more than 12 months rose by 29,000 over the quarter to reach 631,000, the highest figure since the three months to November 1997.
Average earnings continued to show a divide across the public and private sectors. Public sector workers were offered a 3.9% rise including bonuses – up 0.1 percentage points, while private sector workers were offered a 0.1% increase.
TUC general secretary Brendan Barber warned that while the overall jobless figures were improving, it was no time for complacency.
He said: “Many – particularly the young – are still out of work. It would be madness to cut the resources dedicated to helping the unemployed, as some are suggesting, when the medicine is slowly beginning to have an impact.”