Why is this Purpose target important?
Improved labour market participation is a key driver of economic growth. Increasing the number of people in employment adds to the productive capacity of the economy and makes better use of our human capital potential. It also improves the standard of living of those moving into employment and supports a more equitable distribution of the benefits of growth.
What will influence this Purpose target?
Participation rates in Scotland are influenced by demand for labour and the number of jobs in the Scottish economy as well as the supply of labour to fill those jobs. Supply depends on:
- The ability of individuals to participate in the labour market (which is influenced by health and social factors as well as skills levels)
- The willingness of individuals to participate in the workforce (which is affected by issues such as the relative incentive of seeking income from employment)
- The impact of net migration on the size of the workforce
What is the Government's role?
The Government can take a number of actions to influence labour market participation in Scotland. These include:
- Learning, skills and well-being: ensuring the supply of education and skills is responsive to, and aligned with, actions to boost demand for skills; and removal of any barriers that stand in the way of individuals realising their potential in the workforce
- Supportive business environment: provision of responsive and focused enterprise support to increase the number of highly successful, competitive businesses; a focus on key sectors with high-growth potential; and a competitive tax regime which gives incentives for business growth and attracts mobile factors of production
- Effective government: supporting local employability partnerships to increase job outcomes for those disadvantaged in the labour market, developing and delivering effective and coherent services which meet the needs of individuals and the local labour market
How is Scotland Performing
For UK Target:
Scotland currently has the highest employment rate of the four countries in the United Kingdom and over the past year the employment rate has increased by 0.4 percentage points. From the mid 1990s, Scotland’s employment rate was steadily increasing, reaching a peak of 74.9 per cent during the second calendar quarter of 2007 (Apr-Jun), although over the past three years, Scotland’s employment rate, along with the other countries of the UK, has been at a lower level as a result of the economic conditions.
In the latest calendar quarter (Jan-Mar 2013), Scotland had an employment rate of 71.8 per cent, making it the highest of all UK countries. This compares to an employment rate of 71.6 per cent in England for the same quarter.
Last year in Q1 2012 Scotland had an employment rate of 71.4 per cent (highest) and England had an employment rate of 70.8 per cent (second highest), giving a gap of 0.6 percentage points in favour of Scotland.
So over the year the gap has shifted by 0.4 percentage points to Scotland’s detriment. Although the employment rate has increased in Scotland over the year by 0.4 percentage points , the employment rate has increased by more in England, 0.8 percentage points.
Please note that the 0.4 percentage point shift is based on unrounded figures.
Source: Labour Force Survey, Seasonally Adjusted data, Office for National Statistics
The data for this chart is available at the bottom of the page
Source: Labour Force Survey, Seasonally Adjusted data, Office for National Statistics
Criteria for recent change
This evaluation is based on: any difference in the gap within +/- 1 percentage points of the equivalent quarter in the previous year suggests that the position is more likely to be maintaining than showing any change. A movement of 1 percentage point or more in Scotland's favour suggests that the position is improving, whereas a movement of 1 percentage point or more to Scotland's detriment suggests that the position is worsening.
For Organisation for Economic Co-operation and Development (OECD) Target:
The employment rate in Scotland, using the European age definition (15-64), in 2011 was 69.5% which is 0.3 percentage points lower than the previous year. Scotland has the 13th highest employment rate of the OECD countries. Between 2010 and 2011 the gap in employment rates between Scotland and the country with the 5th highest rate (Denmark in 2010 and now Sweden in 2011) increased from 3.7 percentage points in 2010 to 4.6 percentage points in 2011.
Gap between the employment rates in Scotland and the fifth highest OECD country
| Year | 5th Highest OECD Country | Employment Rate 5th Highest OECD Country (%) | Employment Rate Scotland (%) | Gap (Percentage Points) |
| 2005 | New Zealand | 74.3 | 71.5 | 2.8 |
| 2006 | New Zealand | 74.9 | 72.3 | 2.6 |
| 2007 | Sweden | 75.7 | 72.4 | 3.3 |
| 2008 | Netherlands | 75.9 | 72.1 | 3.7 |
| 2009 | Netherlands | 75.6 | 70.6 | 5.0 |
| 2010 | Denmark | 73.4 | 69.8 | 3.7 |
| 2011 | Sweden | 74.1 | 69.5 | 4.6 |
Source: Organisation for Economic Co-operation and Development, Annual Population Survey
The data for this chart is available at the bottom of the page
Source: Organisation for Economic Co-operation and Development, Annual Population Survey
Criteria for recent change
This evaluation is based on: any difference in the gap within +/- 0.5 percentage points of the previous year suggests that the position is more likely to be maintaining than showing any change. A movement of 0.5 percentage point or more in Scotland's favour suggests that the position is improving, whereas a movement of 0.5 percentage point or more in favour of the fifth highest OECD country suggests that the position is worsening.
Further Information
For information on general methodological approach, please click here.
Scotland Performs Technical Note
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