The COVID-19 Recovery Committee is currently looking at the impact of the pandemic on the labour market in Scotland. This blog is designed to support the inquiry by looking at how the labour market has changed over the last 10 years and the course of the pandemic, and by comparing Scotland to the UK overall.
About the data
The data used in this blog comes from the Labour Force Survey (LFS) and the Annual Population Survey (APS), produced by the Office for National Statistics (ONS). The LFS and the APS are the recommended sources for employment-related statistics, such as estimates of the number of people in employment, the number of people unemployed and detailed information about economic inactivity.
The LFS is the source used for the monthly ONS labour market updates. It is a survey of around 40,000 households and 100,000 people across the UK. It provides the most up to date information on the performance of the labour market.
The APS is a much larger survey, with a sample size of around 320,000 people, including a local boost for Scotland from the Scottish Government. The larger sample size allows for a more detailed analysis of the labour market, but there is a longer lag time on the data.
As these two main sources are surveys, they are based on a sample rather than the entire population. This means that they are subject to uncertainty. This can impact our interpretation of the estimates, especially for short-term comparisons. Therefore, we should be cautious when interpreting this data, but we will discuss this when we look at specific parts of the data in the blog.
What is the labour market?
The labour market includes three different sets of people:
- Those in employment: the number of people aged 16 years and over who did one hour or more of paid work per week. The rate is based on the 16-64 population.
- Those who are unemployed: people without a job who have been actively seeking work in the past four weeks and are available to start work in the next two weeks. The rate is based on the economically active population, those in employment plus those who are unemployed, aged 16 and over.
- Those who are economically inactive: the number of people aged 16 and over without a job who have not sought work in the last four weeks and/or are not available to start work in the next two weeks. The rate is based on the 16-64 population.
What does the Scottish labour market look like?
Looking at the data from the LFS for the last 10 years we can see that while the unemployment rate in Scotland has remained broadly in line with the UK, there has been divergence in the employment and inactivity rates.
What happened to the labour market in the pandemic?
If we look at the pandemic period in more detail (see the next chart below), we can see that in both Scotland and the UK there were “shocks” in the labour market at the start of the pandemic. In both Scotland and the UK employment fell while unemployment and economic inactivity increased. However, the UK saw a higher increase in the unemployment rate that in Scotland.
Since the initial shock, the employment and economic inactivity rates have recovered to pre-pandemic levels in Scotland. In the UK, the employment rate has started to recover but is still below pre-pandemic levels. The economic inactivity rate for the UK has shown no signs of returning to pre-pandemic level and the UK is the only country in the developed world where people have continued dropping out of the labour market in ever greater numbers beyond the acute phase of the pandemic.
Why are people economically inactive?
A key focus of the committee inquiry is on economic inactivity. The APS allows us to look at reasons why people are economically inactive. The four most common reasons for economic inactivity are being a student, looking after the family/home, being long-term sick and being retired.
Historically Scotland has a higher proportion of the population who are long term sick than the UK. While this fell slightly, from 6.8% in Jul 2012-Jun 2013 to 6.4% in Jul 2018-Jun 2019 it has since increased to 7.0% in Jul 2021-Jun 2022. The UK rate is currently at 5.5%, which increased from 4.9% in 2018-Jun 2019, with the number of long-term sick in the UK at a record high.
One issue that the committee will consider is “long covid”. Long covid is an emerging phenomenon that is not yet fully understood. In their Prevalence of ongoing symptoms following coronavirus (COVID-19) infection in the UK publication, the ONS define long covid as when symptoms persist for more than four weeks after the first suspected COVID-19 infection that were not explained by something else.
This report provides data on self-reported long covid by labour market classification. It shows that those who are inactive and would not want a job, have the highest proportion of people who have self-reported long COVID. The publication also provides breakdown by sector of employment. It shows that social care, civil service or local government, health care and teaching and education have the highest proportion of people self-reporting as having long COVID. This would suggest that those who have been on the frontline of the pandemic has been the most impacted by long covid.
While in Scotland the labour market has returned to, or improved on, pre-pandemic levels there are many issues which need to be considered around the impact of covid on the health of the workforce. With higher levels of long-term sick and the unknown impact of the long covid on the workforce in the long term there is a lot for the committee to consider during its inquiry.
Andrew Aiton, Data Visualisation Manager, SPICe
Featured image source: Canva