Those not in education, employment or training (neet) in Scotland could potentially add \u00a33bn to the UK gross domestic product (GDP) if they were to join the labour force.<\/p>\n
That’s according to PwC UK\u2019s Youth Employment Index<\/em>, which\u00a0<\/sup>tracks the progress of youth (16-to-24 year-olds) employment outcomes across the 38 Organisation for Economic Cooperation (OECD) countries and regions in the UK, looking at metrics including labour market participation, quality of work and skills acquisition.<\/p>\n The UK\u2019s youth\u00a0jobs market\u00a0performance has declined\u00a0over the past year, dropping four places to 27th<\/sup> out of those OECD economies. The index presents a number of recent lows in UK youth employment metrics, including economic inactivity at its worst levels in a decade, with one in eight now classed as neet, and the share of new graduates in \u2018graduate jobs\u2019 at a 10-year low.<\/p>\n The report finds that the overall UK labour market has cooled, with youth unemployment now almost three percentage points higher than the OECD average, suggesting young workers are disproportionately impacted by the softening jobs market relative to older workers.<\/p>\n While adult workers have seen consistent employment growth since 2012, employment among young workers in 2025 remain below 2019 levels. The youth-to-adult unemployment ratio is now at its highest level on record and the highest in the OECD.<\/p>\n The overall share of recent graduates in \u2018graduate jobs\u2019 has fallen to its lowest level since 2014, indicating the labour market\u2019s capacity to absorb new entrants is weakening. The number of graduates entering the jobs market continues to climb with 2024 marking the first year over one million students graduated from university.<\/p>\n Meanwhile, a growing share of young people are becoming economically inactive, driven by a larger pool of students and an increase in long-term sickness. Three-times as many young people are inactive due to long-term sickness than 2005, with a quarter of young people reporting common mental health conditions in 2024, compared to 19% in 2014.<\/p>\n Another PwC survey found nearly a third of entry-level workers say they\u2019re worried about the impact of artificial intelligence (AI) on their future. Across all sectors, the index found no direct impact of AI on youth employment, with weaker business sentiment and softer labour demand being the main drivers for higher youth unemployment.<\/p>\n However, analysing highly exposed sectors shows a potential impact emerging. The IT sector is the most exposed to AI adoption and typically has higher occupational churn, so could be an early indicator for wider trends.<\/p>\n Youth employment in IT fell by a fifth last year, in part due to a 14% fall in roles for new graduates, while adult employment has remained broadly stable. This could suggest that increased AI adoption has had some impact on entry-level roles at least in the short term. This trend, however, does not currently extend to other sectors.<\/p>\n Longer term, young people are optimistic about AI impact. PwC found that Generation Z workers feel more excited about how AI will affect their careers over the next three years compared to Generation X – expecting to see an increase across productivity (67% vs 39%), salary (47% vs 18%) and job security (48% vs 16%).<\/p>\n Jason Morris, Scotland market senior partner at PwC, said: \u201cThe findings are a clear call to action for Scotland: reducing youth inactivity – especially our NEET rate – wouldn\u2019t just change life chances; it would also deliver a material economic dividend for the nation.<\/p>\n \u201cScotland has real strengths to build on, from our universities to our fast\u2011growing green economy, and now we\u2019ve seen business investment reach its highest level in 20 years, this is a powerful signal of confidence in Scotland\u2019s future.<\/p>\n \u201cBut to convert these advantages into sustained growth, we need tighter alignment between skills pathways, employer demand and targeted support for young people who are struggling to access good work.\u201d<\/p>\n Jake Finney, senior economist at PwC, added: \u201cThe UK\u2019s youth jobs market has deteriorated sharply, which is having large economic ramifications, as according to government estimates, lost output is costing businesses \u00a385bn per year and \u00a3212bn per year in cost to the state; equivalent to 7% of GDP.<\/p>\n \u201cIt\u2019s positive the government has signalled a clear focus on tackling this challenge as without action, it is possible the situation could get worse rather than better: our survey of 4,000 UK adults showed one-in-10 workers are actively considering leaving work and younger workers particularly at risk.<\/p>\n \u201cMeeting this challenge is increasingly urgent, but there are roadmaps: for example, if the UK had matched Australia\u2019s improvements in youth employment since 2014, around 450,000 more young people would be in work today.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":" PwC calls for tighter alignment between skills pathways, employer demand and targeted support for young people<\/p>\n","protected":false},"author":277082,"featured_media":51,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[127720],"coauthors":[137122],"class_list":["post-673","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-skills","tag-featured-story"],"yoast_head":"\n