Wednesday 26 October 2016 4:40 am

UK missing out on £45bn millennials dividend

The UK could be £45bn richer if more young people were in work or education, a new report has claimed.

Consultants at PwC also found the UK lags most of the world’s major economies in terms of the opportunities available to young people, which could be stifling economic growth.

Britain comes in 21st out of the 35 OECD countries in PwC’s “young workers index” which looks at rates of youth unemployment, career progression, and education systems across the developed world, stuck behind not only Germany and the United States, but also countries such as Slovenia, Estonia and the Czech Republic.

Switzerland tops the index – a position it has held solidly since before the crisis. Germany comes in second for the fifth consecutive year and Scandinavian countries also perform strongly.

1 (1)Switzerland67.7
2 (2)Germany66.1
3 (3)Austria63.6
4 (4)Iceland62.9
5 (5)Norway60.3
6 (8)Denmark60.1
7 (6)Netherlands57.5
8 (7)Canada57.3
9 (9)Israel56.4
10 (12)United States56.4
21 (22)United Kingdom46.9

Across the 35 OECD countries, PwC calculates a potential $1.1tn boost to the global economy if every country could match Germany’s 10.1 per cent rate of young people not in education, employment or training (Neet). The UK’s Neet rate is in the middle of the pack at 17 per cent, while Spain is on 29 per cent and in Greece nearly one in three 16 to 24 year olds have no official job and aren’t in formal education.

The countries that perform the best typically have strong vocational education and long-standing ties between employers and schools, PwC said. Austria, for instance, which comes in third on the overall index, guarantees to provide an apprenticeship to all young people who want one.

John Hawksworth, chief economist at PwC said: “While it’s encouraging that the UK has significantly improved the number of young people in employment, education and training over the past year, we still face challenges around skills and mismatches in the labour market.”

The findings come after City employers lent their support to a new government-backed scheme launched earlier this week which will rank businesses on how well they help and offer employment opportunities to young people from disadvantaged backgrounds.