If the UK could bring down the number of young people not in work or education to German levels, the economy would be boosted by around £55bn, according to PwC’s Young Workers Index.
The index measures the labour market impact of workers aged between 20 and 24 across Organisation for Economic Co-operation and Development (OECD) countries
The UK is ranked 21 out of 34 on the OECD list, and below the average for 2006-2014, suggesting the recession has hit young workers in the UK particularly hard, although our rating has improved since 2011.
If the UK brings down the number of 20- to 24-year-olds not in employment, currently at 19 per cent, eduction or training (NEETs) to match Germany’s 10 per cent, UK GDP could jump by three per cent – around £55bn.
Germany and Switzerland topped the table, and have far more young people contributing to their economies.
PwC’s chief economist John Hawksworth, who co-authored the report, pointed to Germany’s training, apprenticeship and education systems and social cohesion policies, which minimised unemployment after the recession, leading to fewer people falling “through the labour market net.”
Germany’s NEET rate was similar to the UK’s in 2006, around 16 per cent, but while the UK has seen levels rise since then, Germany has bought its unemployment levels in the age-group down.
Jon Andrews, head of PwC’s global people and organisation practice, said: “Businesses can face short-term challenges in the form of skill shortages due to high youth unemployment, but this can also have a long-term impact in the form of lower productivity and less innovation.”