Assessing the government’s youth employment package | Institute for Fiscal Studies This comment analyses the government’s new youth employment package, which expands youth wage subsidies and introduces apprenticeship reforms.

Read the comment with Imran Tahir here:
ifs.org.uk/articles/ass...

But the policies announced so far don’t address the growing number of young people on UC with no work requirements, mostly due to health.

At a minimum, wage subsidies (and support) should be open to those who want them. And in the medium term, the youth employment strategy needs to stem this rise.

One point in the comment is that the wage subsidies, expected to support 50k jobs a year on average, only benefit a small share of the ~1 million NEETs today.

I don’t want to labour this point – policy is about prioritising, and focusing on active jobseekers is a good start.

This means that many young people unemployed for 6+ months would find work even without wage subsidies.

Offering £3k to all employers, without additional requirements for additionality, would lead to substantial deadweight loss.

But additionality is more of a concern for this group.

It’s plausible that many people unemployed for 18+ months would not find a job without the Youth Guarantee.

But DWP stats from 2022-2025 show that of 16-24 yos unemployed for 6 months, only 19% are still on the benefit 18 months later (=6/32).

Extending support to those unemployed for 6-18 months makes sense. Employer callback rates fall sharply in the first 6 months, then stabilise (Kroft et al. 2013).

Targeting 6-18 months supports those who are likely to struggle to find work, but before their skills and confidence are eroded.

Yesterday’s announcement hugely reduces the short-term cost of hiring 18-24 year olds on UC, even compared to FY2024 before the rise in youth min wage rates and employer NICs.

More (bonus) charts and reflections below 🧵👇

Peter put together a starter pack of my colleagues at the IFS.

Follow them for high-quality, policy-relevant analysis on tax and spending, efficiency and equity, firms and workers, healthcare and education and much more.

thanks gavin! i updated this the other day - so stark that the post-covid data look the same as the lockdown years: bsky.app/profile/xiao...

Have the UK’s northern cities really experienced a productivity miracle? - Economics Observatory While official data points to a 'productivity miracle' in several large northern cities since 2019, a closer look suggests otherwise. This serves as a reminder to sense-check any data before using it,...

Great piece by @paulswinney.bsky.social raising serious concerns about the UK's sub-national productivity data and what it can tell us. I share his worry that misleading conclusions about a northern city miracle may already be skewing policy debates www.economicsobservatory.com/have-the-uks...

The 'despair' measure we use in the paper (GHQ-12 score of 23+) is noisier, but tells the same story.

Hump shape in illbeing has been replaced by a declining age profile, and this isn't a Covid blip.

The latest USoc wave lets us split out the Covid years from what came after.

So striking that they look the same!

Average mental ill health (based on a general screening instrument) is no better now than during the lockdown years, at any age. @alexbryson.bsky.social @dannyblanchy.bsky.social

Finally made it over here, hello! 👋

(Authors of Carneiro et al. are Pedro Carneiro @ucleconomics.bsky.social, @francescafolia1.bsky.social, Sonya Krutikova @manchester.ac.uk, Julia Loh @theifs.bsky.social and @lindseymacmillan.bsky.social)

The paper by Carneiro et al. shows that places with strong labour markets also have higher equality of opportunity for kids who grow up in poor v. rich neighbourhoods.

Education also matters: LAs with better schools and less academic segregation have more equality of opportunity.

My paper shows that youth migration has also increased in recent years, especially among graduates. Graduates move from places with weak labour markets to London and other high-paying cities, which exacerbates regional skills inequalities.

Skilled labour, as well as capital, flows towards London.

The paper from Daams, Mayer and McCann @productivity.bsky.social shows that risk premiums on real estate investments outside London increased dramatically after the 2008 financial crisis, limiting access to credit in regional cities.

How can policy tackle regional inequalities? | Institute for Fiscal Studies At this policy conference, researchers will present new evidence on the scale and causes of regional inequalities.

Excited about discussing regional inequalities at the Fiscal Studies symposium event next week!

We've got a star-studded lineup of @andyburnham.bsky.social, Paul Collier, Philip McCann, @lindseymacmillan.bsky.social, @amcanning.bsky.social and more.

Summary of new papers below 🧵👇