Key points

  • ‘Unemployment’ is only part of the overall picture of people who lack, but want, paid work: even during the current recession, around half of all those who lack, but want, paid work were considered to be ‘economically inactive’ rather than ‘unemployed’, either because they are able to started work immediately or because they are not actively seeking work.  Lone parents and those who are sick or disabled usually count as ‘economically inactive’ rather than ‘unemployed’.  In other words, the people who lack but want paid work divide into two broad groups of roughly equal size, namely those who are officially (ILO) unemployed and those who are considered to be economically inactive but nevertheless want paid work. 1
  • In 2010, there were around 4.7 million people of working-age who wanted to be in paid work but were not.  This is a substantial increase compared with 2008 (3.9 million) and a slight increase compared with 2009 (4.6 million).  The vast majority of this increase has been among those who are unemployed rather than among those who were economically inactive but wanted paid work.  The 4.7 million people represents 12½% of the total working-age population.
  • As a result of the sharp rise since 2008, the number of people of working-age who want to be in paid work but are not is now back to the levels of the mid 1990s.  Throughout this period, the number who were economically inactive but wanted paid work remained broadly unchanged.  However, the number who were officially unemployed changed considerably:
    • 1995 to 2001: falling unemployment, particularly in terms of long-term unemployment.
    • 2001 to 2005: stable unemployment.
    • 2005 to 2008: rising unemployment.
    • 2008 to 2009, sharply rising unemployment.
    • 2009 to 2010: stable unemployment, but with a rising proportion who are long-term unemployed.
  • So, the number of unemployed people had already been rising for a number of years before the recent recession, from 1.4 million in 2005 to 1.6 million in 2008, before jumping to 2.4 million in 2009.
  • One consequence of these trends is that the mix of people who want to be in paid work but are not has changed over time.  More specifically:
    • Although the total number of people who were unemployed was similar in 2010 and 1995, the proportion who were long-term unemployed was lower in 2010 than in 2005: in 2010, a third of those who were unemployed had been unemployed for more than a year compared with two-fifths in 1995.  Obviously, this is because 2010 is earlier in the recessionary cycle than 1995 was, so the number of long-term unemployed is less.  Equally obviously, this might well change over the next few years.
    • Whilst the number of people who were who were economically inactive but wanted paid work in 2010 was around half of the total number lacking but wanting paid work, a decade ago they were a much higher proportion of the total (typically around three-fifths).  Clearly, policies for reducing worklessness need to cover those who are economically inactive but want paid work as well as those who are officially unemployed.
  • The proportion of the working-age population lacking who lack, but want, paid work is highest in the North East of England, and lowest in the Northern Ireland.
  • For women of all ages, and for older men, those who are economically inactive but wanting paid work substantially outnumber the officially unemployed.  Men aged under 35 are the only group where the officially unemployed substantially outnumber those who are economically inactive but wanting paid work.
  • For an analysis of unemployment trends by age group, see the indicator on young adult unemployment.
  • Unemployment rates decrease with age, for both men and women.  The rates of those who are economically inactive but wanting paid work also decrease with age for women but increase with age for men.

Why this indicator was originally chosen

This indicator recognises that it is not sufficient to look only at those officially unemployed since they are actually a minority of working age adults who would like to have a job.  A large section of adults who are officially described as ‘economically inactive’ rather than unemployed would also like to work, and may even be actively seeking to find a job.  The balance between the unemployed and the economically inactive has recently been changing, with falling numbers of unemployed and stable or rising levels of economic inactivity.  The indicator therefore shows both the unemployed and the economically inactive who would like work.

Definitions and data sources

The first graph shows the number of people aged 16 to retirement lacking but wanting paid work.  It is divided between the long-term unemployed, the short-term unemployed, and those counted as ‘economically inactive’ who nevertheless want paid work.  The data shown goes back to 1993 as 1993 was when unemployment was at its peak in the recession of the early 1990s.

Given the current interest in the topic due to the recession, the supplementary graph shows the same data but by quarter rather than by year.

‘Unemployment’ is the ILO definition, which is used for the official unemployment numbers.  It comprises all those with no paid work in the survey week who were available to start work in the next fortnight and who either looked for work in the last month or were waiting to start a job already obtained.

The ‘economically inactive who want paid work’ includes people not available to start work for some time and those not actively seeking work.  The data is based on a question in LFS asking the economically inactive whether they would like paid work or not.

The second graph shows the same data but as a percentage of the population aged 16 to retirement.

The third graph shows how the proportion of the population aged 16 to retirement who lack, but want, paid work varies by region, with the proportions who are unemployed and economically inactive but wanting paid work shown separately.

The fourth graph shows how the proportions of people who are either unemployed or economically inactive but wanting paid work vary by age and sex.

The fifth graph shows the shares of those aged 16 to retirement who want paid work by reason for their lack of work.

The data source for all the graphs is the Labour Force Survey (LFS).  The data relates to the United Kingdom and is not seasonally adjusted.  To improve its statistical reliability, the figures for each year are the average for the four quarters of the relevant year and the data in the third, fourth and fifth graphs is the average for the latest three years.

The map shows how the proportion of the population aged 16 to retirement who lack, but want, paid work varies by local authority.  The data is the average for 2004 to 2006.

The data source for the map is the Annual Population Survey.  This is effectively LFS with selected booster samples to compensate for small sample sizes in some authorities.

Overall adequacy of the indicator: high.  The LFS is a well-established, quarterly government survey designed to be representative of the population as a whole.

Relevant 2007 Public Service Agreements

Overall aim:  Maximise employment opportunity for all.

Lead department

Department for Work and Pensions.

Official national targets

None.

Other indicators of progress

Overall employment rate taking account of the economic cycle.

Narrow the gap between the employment rates of the following disadvantaged groups and the overall rate: disabled people; lone parents; ethnic minorities; people aged 50 and over; those with no qualifications; and those living in the most deprived Local Authority wards.

Number of people on working age out-of-work benefits.

Amount of time people spend on out-of-work benefits.

Previous 2004 targets

As part of the wider objective of full employment in every region, over the three years to Spring 2008, and taking account of the economic cycle, demonstrate progress on increasing the employment rate.

As part of the wider objective of full employment in every region, over the three years to Spring 2008, and taking account of the economic cycle:

  • increase the employment rates of disadvantaged groups (lone parents, ethnic minorities, people aged 50 and over, those with the lowest qualifications, and those living in local authority wards with the poorest initial labour market position); and
  • significantly reduce the difference between the employment rates of the disadvantaged groups and the overall rate.

As a contribution to reducing the proportion of children living in households where no-one is working by 2008:

  • increase the stock of Ofsted-registered childcare by 10%;
  • increase the take-up of formal childcare by lower income working families by 50%; and
  • introduce by April 2005, a successful light-touch childcare approval scheme.

The numbers

Graphs 1 and 2

Year Unemployed (ILO definition) for more than a year Unemployed (ILO definition) for less than a year 'Economically inactive' who want work
19931,230K (3.5%) 1,680K (4.8%) 2,150K (6.2%)
19941,150K (3.3%) 1,500K (4.3%) 2,260K (6.5%)
19951,010K (2.9%) 1,400K (4.0%) 2,240K (6.4%)
1996890K (2.5%) 1,390K (4.0%) 2,320K (6.6%)
1997 700K (2.0%) 1,270K (3.6%) 2,370K (6.7%)
1998 530K (1.5%) 1,240K (3.5%) 2,350K (6.6%)
1999 480K (1.3%) 1,220K (3.4%) 2,260K (6.4%)
2000 420K (1.1%) 1,150K (3.3%) 2,280K (6.4%)
2001 360K (0.9%) 1,100K (3.2%) 2,220K (6.2%)
2002 320K (0.8%) 1,180K (3.3%) 2,250K (6.2%)
2003 310K (0.8%) 1,150K (3.2%) 2,130K (5.9%)
2004 280K (0.7%) 1,110K (3.1%) 2,030K (5.6%)
2005 290K (0.7%) 1,100K (3.1%) 2,000K (5.5%)
2006 350K (1.0%) 1,240K (3.4%) 2,040K (5.6%)
2007370K (1.0%) 1,210K (3.3%) 2,060K (5.6%)
2008420K (1.1%) 1,340K (3.5%) 2,140K (5.7%)
2009570K (1.5%) 1,790K (4.7%) 2,200K (5.8%)
2010790K (2.1%) 1,650K (4.3%) 2,230K (6.0%)

Graph 3

Region Unemployed (ILO definition) 'Economically inactive' who want work Total
East 5.0% 5.4% 10.4%
East Midlands 5.7% 5.3% 11.0%
North East 6.9% 6.8% 13.7%
North West 6.2% 6.5% 12.7%
Northern Ireland 4.5% 4.0% 8.5%
London 6.5% 6.4% 13.0%
Scotland 5.5% 5.9% 11.4%
South East 4.7% 5.5% 10.2%
South West 4.6% 5.2% 9.8%
Wales 6.1% 6.7% 12.7%
West Midlands 6.9% 5.5% 12.4%
Yorkshire and the Humber 6.5% 6.0% 12.4%

Graph 4

Gender Age group Unemployed (ILO definition) 'Economically inactive' who want work
Men 25-34 6.8% 2.8%
35-49 4.7% 3.4%
50-retirement 4.0% 5.7%
Women 25-34 4.7% 6.7%
35-49 3.6% 6.1%
50-retirement 2.4% 5.5%

Graph 5

Thousands
Unemployed 2,200K
Long-term sick or disabled 700K
Looking after family/home 600K
Student500K
Other 500K
1. Neither of these groups is the same as the ‘claimant count’ numbers that are often published in the media, which effectively are the numbers of people in receipt of Jobseeker’s Allowance.   Although there is a strong overlap between ‘officially unemployed’ and ‘claimant count’, a 2008 paper from ONS listed a number of material differences, including: a) people whose partner is working; b) young people under 18 who are looking for work but do not take up the offer of a Youth Training place; c) students looking for part-time work or vacational work; and d) people who have left their job voluntarily. The reason that the media often use the claimant count numbers is simply that they are available on a more timely basis, particularly at a sub-regional level.