Chapter 3: Economic Inactivity
Economic inactivity covers individuals who are neither in employment nor unemployed. There are many reasons why people may be inactive. For example, they may have a long-term illness or disability, be studying for a qualification, staying at home to look after their family, or have retired. The economically inactive population are not part of the supply of labour but are important as they are potential labour supply in the future. This chapter examines trends in inactivity across Scotland and its local authorities between 2004 and 2010 and also looks at the reasons why people are inactive and their willingness to work in the future.
Box 3.1 - Economic Inactivity |
|---|
Economically inactive people are not in employment, but do not satisfy the internationally agreed definition of unemployment. This group covers people without a job who: want a job but have not been seeking work in the last four weeks; or want a job and are seeking work but not available to start work in the next two weeks; or do not want a job. Headline Inactivity levels and rates cover all workers aged 16-64 for both men and women. This excludes many people who would be inactive due to retirement. |
Country Level Analysis
Note: Data in the following section is taken from the Labour Force Survey ( LFS). This provides a more current picture of economic inactivity in Scotland. At the time of publication, the latest LFS data available was for March-May 2011. The most current data on economic inactivity in Scotland (updated on a monthly basis) is available at:
http://www.scotland.gov.uk/Topics/Statistics/Browse/Labour-Market/Labour-Market-Briefing/
Headline inactivity rates at a country level are based on LFS data. Chart 3.1 shows how the inactivity rate has changed in Scotland and the UK countries since March-May 2011.
Chart 3.1: Inactivity rate for people aged 16-64, UK countries, 2004-2011
Source: Labour Force Survey, seasonally adjusted.
Since 2004 the economic inactivity rate in Scotland has been generally lower than the UK rate. Since mid 2007, the trend in Scotland has been a very gradual increase, while over the same period the UK inactivity rate was generally unchanged until early 2009. In mid 2009 the economic inactivity rate grew dramatically in Scotland peaking in early 2010 at 23.9%. Over the last year the economic inactivity rate decreased by 1.1 percentage points in Scotland, whilst it decreased by 0.1 percentage points across the UK.
Local Authority Analysis
Note: The following section uses data from the APS. This relates to the period Jan-Dec 2010.
Based on APS data in 2010 23% of the population aged 16-64 in Scotland (781,200) were economically inactive. This compares to 23.9% of the UK population aged 16-64. Between 2009 and 2010 economic inactivity rates increased in over half (17 in total) of Scotland's local authorities. The authorities showing the largest increases were Eilean Siar (up 6.9 percentage points), Orkney Islands (up 5.9 percentage points) and Scottish Borders (up 5.2 percentage points). In contrast, inactivity declined in several local authorities over the year. The three areas with the largest decrease were Clackmannanshire, Inverclyde and Aberdeenshire.
Chart 3.2: Inactivity rate for people aged 16-64 by local authority, Scotland, Change on year (2009-2010)
Source: Annual Population Survey, Jan-Dec
Table 3.1 shows the inactivity rates by local authority from 2007 to 2010 for people aged 16-64. Map 3.1 shows the inactivity rates by local authority in 2010 for people aged 16-64. Map 3.1 shows a similar pattern across local authorities to Map 2.1 (model-based unemployment rates). The relationship between unemployment rates and inactivity rates is complex. The higher the level of inactivity within an area, the lower the level of economic activity (the sum of employment and unemployment). The unemployment rate is calculated using the number of economically active people as a denominator; consequently in areas where there are high levels of inactivity the unemployment rate is also higher. Data from 2004 to 2010 is available in the web tables and via Scottish Neighbourhood Statistics.
Reasons for inactivity
Respondents in the APS are asked to provide a reason as to why they are not in employment or unemployed. Chart 3.3 shows the results for Scotland in 2008, 2009 and 2010. The largest group within the economically inactive population is those stating they have a long-term sickness or disability. The relative size of this group has reduced consistently over the last six years from 33.0% in 2004 to its current level of 29.0% in 2010, but over the last year the decrease is very slight. Those looking after the family or home make up just over a fifth (20.9%) of the inactive population, and has fallen only slightly over the past six years. Students are the other main inactive group, accounting for 21.6% of the inactive population in 2010. The relative size of this group decreased in 2010 to 21.6% of the inactive population, but had grown in every previous year from 2004 to 2009, and has increased in size by 26.8%, from 168,900 in 2004, to 133,200 in 2010. Data on reasons for inactivity by local authority are provided in the web tables.
Table 3.1: Inactivity rate for people aged 16-64 by local authority, Scotland, 2007-2010
Geography
(Residence Based) | 2007 | 2008 | 2009 | 2010 | Change over year |
|---|
| Proportion | Level | Proportion | Level | Proportion | Level | Proportion | Level | Percentage point change | Level |
|---|
| Scotland | 22.5% | 755,100 | 22.6% | 764,200 | 22.6% | 765,400 | 23.0% | 781,200 | 0.4% | 15,800 |
| Local Authority Area | | | | | | | | | | |
| Aberdeen City | 18.7% | 26,600 | 18.8% | 26,900 | 19.2% | 28,200 | 17.5% | 26,000 | -1.7% | -2,200 |
| Aberdeenshire | 18.0% | 27,800 | 17.7% | 27,400 | 17.4% | 27,200 | 15.4% | 24,300 | -2.0% | -2,900 |
| Angus | 18.9% | 12,800 | 18.9% | 12,800 | 21.3% | 14,300 | 21.3% | 14,400 | 0.0% | 100 |
| Argyll & Bute | 19.2% | 10,500 | 20.6% | 11,000 | 21.7% | 11,600 | 22.8% | 12,000 | 1.1% | 400 |
| Clackmannanshire | 28.0% | 9,200 | 26.7% | 8,600 | 25.4% | 8,200 | 20.5% | 6,700 | -4.9% | -1,500 |
| Dumfries and Galloway | 22.6% | 20,700 | 22.5% | 20,700 | 21.5% | 19,700 | 23.8% | 21,500 | 2.3% | 1,800 |
| 24.8% | 23,000 | 26.2% | 24,300 | 25.5% | 24,100 | 23.9% | 22,500 | -1.6% | -1,600 |
| East Ayrshire | 24.6% | 19,000 | 23.7% | 18,500 | 24.7% | 19,300 | 23.2% | 17,900 | -1.5% | -1,400 |
| East Dunbartonshire | 21.6% | 14,300 | 21.4% | 14,100 | 20.3% | 13,300 | 20.7% | 13,600 | 0.4% | 300 |
| East Lothian | 20.9% | 12,300 | 22.2% | 13,300 | 21.7% | 13,100 | 22.2% | 13,500 | 0.5% | 400 |
| East Renfrewshire | 21.5% | 12,000 | 22.4% | 12,400 | 23.1% | 12,800 | 22.3% | 12,400 | -0.8% | -400 |
| Edinburgh, City of | 21.7% | 71,000 | 21.7% | 72,200 | 22.5% | 75,400 | 25.1% | 85,200 | 2.6% | 9,800 |
| Eilean Siar | 19.4% | 3,200 | 17.9% | 2,900 | 21.5% | 3,500 | 28.4% | 4,500 | 6.9% | 1,000 |
| Falkirk | 21.1% | 20,600 | 20.7% | 20,300 | 22.1% | 21,800 | 21.8% | 21,800 | -0.3% | 0 |
| Fife | 21.4% | 50,000 | 20.7% | 48,400 | 21.7% | 51,000 | 21.2% | 49,700 | -0.5% | -1,300 |
| Glasgow City | 30.0% | 120,000 | 30.0% | 121,000 | 30.3% | 123,800 | 29.1% | 119,300 | -1.2% | -4,500 |
| Highland | 18.5% | 25,400 | 19.0% | 26,200 | 15.9% | 22,000 | 18.6% | 25,900 | 2.7% | 3,900 |
| Inverclyde | 26.9% | 14,100 | 25.2% | 13,200 | 26.1% | 13,300 | 23.3% | 11,800 | -2.8% | -1,500 |
| Midlothian | 17.7% | 9,000 | 18.8% | 9,800 | 17.5% | 9,100 | 20.6% | 10,700 | 3.1% | 1,600 |
| Moray | 19.9% | 10,800 | 17.5% | 9,600 | 18.1% | 9,900 | 17.9% | 9,700 | -0.2% | -200 |
| North Ayrshire | 26.1% | 22,500 | 25.1% | 21,700 | 26.6% | 22,600 | 27.6% | 23,600 | 1.0% | 1,000 |
| North Lanarkshire | 24.3% | 51,400 | 25.8% | 55,000 | 21.3% | 45,500 | 22.1% | 46,900 | 0.8% | 1,400 |
| Orkney Islands | 14.0% | 1,700 | 16.3% | 2,000 | 12.4% | 1,600 | 18.3% | 2,300 | 5.9% | 700 |
| Perth and Kinross | 21.9% | 19,400 | 21.0% | 18,800 | 21.7% | 19,800 | 21.9% | 20,100 | 0.2% | 300 |
| Renfrewshire | 23.4% | 26,100 | 21.9% | 24,400 | 21.8% | 24,200 | 24.5% | 27,000 | 2.7% | 2,800 |
| Scottish Borders | 18.9% | 13,100 | 18.6% | 13,000 | 19.3% | 13,500 | 24.5% | 17,300 | 5.2% | 3,800 |
| Shetland Islands | 12.3% | 1,700 | 12.8% | 1,800 | 11.9% | 1,700 | 11.9% | 1,700 | 0.0% | 0 |
| South Ayrshire | 21.9% | 15,200 | 23.7% | 16,400 | 23.1% | 16,000 | 25.0% | 17,400 | 1.9% | 1,400 |
| South Lanarkshire | 20.9% | 42,000 | 23.6% | 47,700 | 23.0% | 46,600 | 23.4% | 47,500 | 0.4% | 900 |
| Stirling | 21.5% | 12,200 | 21.8% | 12,300 | 20.4% | 11,500 | 24.3% | 13,700 | 3.9% | 2,200 |
| West Dunbartonshire | 23.5% | 14,100 | 25.1% | 15,000 | 25.9% | 15,400 | 25.4% | 15,200 | -0.5% | -200 |
| West Lothian | 20.7% | 23,200 | 20.0% | 22,500 | 22.4% | 25,400 | 22.0% | 24,900 | -0.4% | -500 |
Source: Annual Population Survey, Jan-Dec
* - Data suppressed as estimate is below reliability threshold
Map 3.1: Economic inactivity rates for those aged 16-64 by local authority, Scotland, 2010.
Chart 3.3: Reasons for inactivity, Scotland, 2008- 2010
Source: Annual Population Survey, Jan-Dec
Notes:
- Discouraged workers includes those who believe there are no jobs available.
- 'Other' includes those waiting results of job application, not yet started looking for work, does not need or want employment and any other reasons.
Willingness to work
Table 3.2 shows the number and proportion of those who are inactive but want to work. People who are inactive may have a willingness to work but are not available or able to do so. In 2010, 24.1% of all people in Scotland aged 16-64 who were inactive, wanted to work, compared to 25.7% in 2009. The proportion was highest in Moray where 36.6% of inactive people said they would like to work. The relationship between inactivity and willingness to work is complex. In general, in those local authorities where inactivity has been decreasing, the proportion of inactive people who are willing to work has decreased. This may be because the reductions in activity are due to people moving into the labour market and those people who were previously willing to work are now working or looking for work.
Table 3.2: Economically inactive people aged 16-64 by willingness to work, Scotland, 2010
Geography
(Residence Based) | 2009 | | 2010 | Change over year |
|---|
| % Who want to work | Level
Want to Work | All
Inactive | % Who want to work | Level Want to Work | All Inactive | % point | Level change want to work | Level change inactive |
|---|
| Scotland | 25.7% | 197,000 | 765,400 | 24.1% | 188,000 | 781,200 | -1.6% | -9,000 | 15,800 |
| Local Authority Area | | | | | | | | | |
| Aberdeen City | 35.6% | 10,000 | 28,200 | 21.7% | 5,600 | 26,000 | -13.9% | -4,400 | -2,200 |
| Aberdeenshire | 31.5% | 8,600 | 27,200 | 25.9% | 6,300 | 24,300 | -5.6% | -2,300 | -2,900 |
| Angus | 32.5% | 4,700 | 14,300 | 30.9% | 4,500 | 14,400 | -1.6% | -200 | 100 |
| Argyll & Bute | 25.4% | 2,900 | 11,600 | 24.6% | 2,900 | 12,000 | -0.8% | 0 | 400 |
| Clackmannanshire | 28.1% | 2,300 | 8,200 | 31.9% | 2,100 | 6,700 | 3.8% | -200 | -1,500 |
| Dumfries and Galloway | 26.1% | 5,200 | 19,700 | 24.0% | 5,200 | 21,500 | -2.1% | 0 | 1,800 |
| Dundee City | 27.8% | 6,700 | 24,100 | 29.1% | 6,600 | 22,500 | 1.3% | -100 | -1,600 |
| East Ayrshire | 29.4% | 5,700 | 19,300 | 28.8% | 5,200 | 17,900 | -0.6% | -500 | -1,400 |
| East Dunbartonshire | 16.7% | 2,200 | 13,300 | 17.0% | 2,300 | 13,600 | 0.3% | 100 | 300 |
| East Lothian | 21.0% | 2,700 | 13,100 | 23.4% | 3,200 | 13,500 | 2.4% | 500 | 400 |
| East Renfrewshire | 21.5% | 2,700 | 12,800 | 19.9% | 2,500 | 12,400 | -1.6% | -200 | -400 |
| Edinburgh, City of | 26.7% | 20,100 | 75,400 | 22.3% | 19,000 | 85,200 | -4.4% | -1,100 | 9,800 |
| Eilean Siar | * | * | 3,500 | 26.5% | 1,200 | 4,500 | * | * | 1,000 |
| Falkirk | 35.5% | 7,800 | 21,800 | 27.7% | 6,100 | 21,800 | -7.8% | -1,700 | 0 |
| Fife | 33.4% | 17,000 | 51,000 | 25.6% | 12,700 | 49,700 | -7.8% | -4,300 | -1,300 |
| Glasgow City | 20.1% | 24,900 | 123,800 | 17.8% | 21,200 | 119,300 | -2.3% | -3,700 | -4,500 |
| Highland | 25.2% | 5,500 | 22,000 | 28.3% | 7,300 | 25,900 | 3.1% | 1,800 | 3,900 |
| Inverclyde | 31.2% | 4,100 | 13,300 | 24.9% | 2,900 | 11,800 | -6.3% | -1,200 | -1,500 |
| Midlothian | 14.3% | 1,300 | 9,100 | 13.3% | 1,400 | 10,700 | -1.0% | 100 | 1,600 |
| Moray | 35.6% | 3,500 | 9,900 | 36.6% | 3,600 | 9,700 | 1.0% | 100 | -200 |
| North Ayrshire | 26.4% | 6,000 | 22,600 | 28.9% | 6,800 | 23,600 | 2.5% | 800 | 1,000 |
| North Lanarkshire | 16.0% | 7,300 | 45,500 | 24.1% | 11,300 | 46,900 | 8.1% | 4,000 | 1,400 |
| Orkney Islands | * | * | 1,600 | * | * | 2,300 | * | * | 700 |
| Perth and Kinross | 17.0% | 3,400 | 19,800 | 14.7% | 3,000 | 20,100 | -2.3% | -400 | 300 |
| Renfrewshire | 31.8% | 7,700 | 24,200 | 24.6% | 6,600 | 27,000 | -7.2% | -1,100 | 2,800 |
| Scottish Borders | 23.0% | 3,100 | 13,500 | 25.6% | 4,400 | 17,300 | 2.6% | 1,300 | 3,800 |
| Shetland Islands | * | * | 1,700 | * | * | 1,700 | * | * | 0 |
| South Ayrshire | 19.0% | 3,000 | 16,000 | 28.3% | 4,900 | 17,400 | 9.3% | 1,900 | 1,400 |
| South Lanarkshire | 26.1% | 12,200 | 46,600 | 27.6% | 13,100 | 47,500 | 1.5% | 900 | 900 |
| Stirling | 24.1% | 2,800 | 11,500 | 20.7% | 2,800 | 13,700 | -3.4% | 0 | 2,200 |
| West Dunbartonshire | 28.7% | 4,400 | 15,400 | 25.9% | 3,900 | 15,200 | -2.8% | -500 | -200 |
| West Lothian | 31.4% | 8,000 | 25,400 | 32.2% | 8,000 | 24,900 | 0.8% | 0 | -500 |
Source: Annual Population Survey, Jan-Dec
* - Data suppressed as estimate is below reliability threshold