The participation gap: The UK’s labour market through the pandemic in international context

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After an initially successful labour market response, the UK has seen the largest employment rate drop in the G7 since the pandemic started. This is despite a recruitment crunch for many employers and is driven by rising numbers of people over 50 and with long-term sickness leaving the jobs market.

1.7 million economically inactive people say they want to work, including 63% of those in their 50s who’ve left work in the pandemic who also say they would like to work again if they could find a job that matches their skillsets and offers flexible working opportunities. This is not a common picture in other countries. In fact, the report shows the UK is an international outlier, seeing the biggest drops in over 50s in the workforce of ten major countries studied.

We currently have crunches in recruitment and labour market participation. Employers and the Government need to find ways to support people back into the labour market – growing supply rather than putting the brakes of a smaller, overheated economy.