- Inactivity rates remain above pre-Covid-19 levels
- Evidence suggests that the pandemic has changed the way women and older workers participate in the labour force
Tuesday’s ONS labour market figures were something of a head-scratcher. On the one hand, joblessness is still relatively low: May’s unemployment rate was down on pre-pandemic levels, at 3.8 per cent. Good news – although it doesn’t mean that employment has seen a corresponding rise. In fact, the employment rate is also below pre-Covid-19 levels, and struggling to regain lost ground.
This apparent discrepancy can arise because employment and unemployment are not quite two sides of the same coin. Between these two categories sits a third group of workers who are neither in employment nor looking for work: the economically inactive. Textbook economics largely ignores this group, rattling off an overlooked list of early retirees, students, carers and those with long-term illnesses. But this month, inactivity figures are looking very interesting indeed.