Tuesday 30 March 2021 10:14 am

Pandemic leads people to stay unemployed for longer

The number of people unemployed rose during the second half of 2020, despite government measures like the furlough scheme intended to curb job losses.

Between April and September in 2020 the number of people of working age out of work increased by 212,000 to 2.1 million. Of those, just 24 per cent had returned to work by the following financial quarter, according to the latest ONS figures.

This represents a lower rate of returning to work than seen under normal circumstances, meaning people are staying out of work for longer during the Covid-19 pandemic.

The levels of unemployment seen during the Covid-19 pandemic remained below the levels seen during the 2008 financial crisis.

During the financial crisis, the number of people out of work climbed from two million in Q4 2007 to 2.4 million by Q4 2008.

Declining opportunities

According to the ONS, those who spend more time out of work are less likely to find a job.

Between 2007 and 2020, more than two-fifths (41%) of people who had been out of work for up to three months returned to work within the next three months.

This reduced to 29 per cent of people who had been out of work for up to six months, and 23 per cent of people who had been out of a job for six to nine months.

Those with a disability or health condition were even less likely to return to work. According to the ONS, between 2007 and 2020, less than eight per cent of disabled people who were out of work, but had previously had a job, returned to employment in the next three months.

People from ethnic minority backgrounds were also less likely to return to work than those from a white ethnic background.

Between 2007 and 2020, people from mixed, Asian or Chinese and other minority ethnic backgrounds returned to work at a rate of 22 per cent, 19 per cent and 18 per cent respectively.

In contrast, people of white or black ethnicity have returned to work at slightly lower rates, 18 per cent and 17 per cent respectively.

However, when controlling for differences in personal characteristics, being from a Black, Asian, or Chinese or other ethnic minority background were all found to significantly reduce a person’s likelihood of returning to work, compared with people of white ethnicity.

Dr Norbert Morawetz, founder of not-for-profit Classof2020, which helps to improve job prospects for young people, and associate professor in entrepreneurship at Henley Business School, said: “As we emerge from the latest lockdown, the damage from coronavirus is far from over for many young people, who have seen job opportunities slashed, and borne the brunt of unemployment.

“There will be lasting impacts to the confidence and skills of those affected, and as the economy recovers from Covid we must ensure that they are not left behind.”